Mali - Telecommunications Project : Credit 0321 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 321 MLI Development Credit Agreement (Telecommunications Project) BETWEEN REPUBLIC OF MALI AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JUNE 28, 1972 CONFORMED COPY CREDIT NUMBER 321 MLI Development Credit Agreement (Telecommunications Project) BETWEEN REPUBLIC OF MALI AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JUNE 28, 1972 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated June 28, 1972, between the REPUBLIC OF MALI (hereinafter called the Borrower) and the INTERNATIONAL DEVELOPMENT 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 Project will be carried out by the Office des Postes et T9lcommunications de la Republique du Mali (hereinafter called the OPTM) with the Borrower's assistance and, as part of such assistance, the Borrower will make available to the OPTM the proceeds of the Credit as hereinafter provided; and (C) The Association is willing to make the Credit available upon the terms and conditions set forth hereinafter and in the Project Agreement of even date herewith between the Association and the OPTM; NOW THEREFORE the parties hereto hereby agree as follows: 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 Association, dated January 31, 1969, with the same force and effect as if they were fully set forth herein, subject, however, to the deletion of Sections 5.01 and 6.02 (h) thereof and to the renumbering of Section 6.02 (i) into 6.02 (h) thereof (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Project Agreement" means the agreement between the Association and the OPTM 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 4 (b) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and the OPTM pursuant to Section 3.01 (b) of this Agreement, as the same may be amended from time to time, and such term includes any schedules or annexes to the Subsidiary Loan Agreement. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equivalent to three million six hundred thousand dollars ($3,600,000). 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 shall be amended from time to time, 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, described in Schedule 2 to this Agreement, and to be financed under the Development Credit Agreement; provided, however, that, except as the Association shall otherwise agree, no withdrawal shall be made on account of (i) expenditures in the territories of any country which is not a member of the Bank (other than Switzerland) or for goods produced in, or services supplied from, such territories, or (ii) expenditures for services described under Category VI of the table set forth in Schedule 1 to this Agreement unless and until the Borrower, after using its best efforts to obtain other financial assistance for such services in the form of a grant, shall not have succeeded prior to December 31, 1972 or to such later date as may be agreed to by the Association. In the event such efforts are successful, the amount of the Credit allocated to such Category VI shall be cancelled. Section 2.03. Except as the Association shall otherwise agree, the goods and services required for the Project and to be financed out of the proceeds of the Credit shall be procured pursuant to the provisions set forth or referred to in Section 2.04 of the Project Agreement. Section 2.04. The Closing Date shall be July 1, 1976 or such other date as shall be agreed between the Borrower and the Association. Section 2.05. 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. 5 Section 2.06. Service charges shall be payable semi-annually on January 15 and July 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each January 15 and July 15 commencing July 15, 1982 and ending January 15, 2022 each installment to and including the installment payable on January 15, 1992 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 2.08. The currency of the French Republic is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.09. The OPTM 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. ARTICLE III Execution of the Project; Provision of Funds Section 3.01. (a) 'Aithout any limitation or restriction upon any of its other obligations under the Development Credit Agreement, the Borrower shall cause the OPTM to perform in accordance with the provisions of the Project Agreement and the Subsidiary Loan Agreement all the obligations of the OPTM 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 the OPTM 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 relend the proceeds of the Credit to the OPTM for 20 years, including 4 years of grace, and at the rate of interest of 7-1/4 per cent per annum, under a subsidiary loan agreement between the Borrower and the OPTM containing terms and conditions which shall have been approved by the Association. Such period of grace may be extended by agreement between the Borrower, the Association and the OPTM. (c) The Borrower shall exercise its rights under the Subsidiary Loan Agreement in such manner as to protect the interests of the Borrower and the Association and to accomplish the purposes of the Credit, and except as the Association shall otherwise agree, the Borrower shall not assign, nor amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. 6 Section 3.02. Pursuant to Section 3.01 (a) above, the Borrower shall make such arrangements satisfactory to the Association as shall be necessary to (i) ensure the availability to the Telecommunications Department of the OPTM of adequate working capital; (ii) ensure that a plan is established and submitted to the Association for the settling of the deficits of the Postal and Financial Department of the OPTM prior to 1968, and for restoring the financial position of such Department to good order by appropriate measures, including the setting off of such deficits against amounts owed to the Treasury; (iii) cover at the end of each fiscal year beginning with 1972, any deficit arising from the operations of such Department; and (iv) ensure the prompt payment by the Borrower of charges of the OPTM for services rendered to the Borrower. ARTICLE IV Consultation, Information and Inspection Section 4.01. The Borrower and the Association shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, the Borrower and the Association shall from time to time, at the request of either party: (a) exchange views dhrough their representatives with regard to the performance of their respective obligations under the Development Credit Agreement, the perfor ance by the OPTM of its rl --itions under the Project Agreement and the Sr- idiary Loan Agreement, the ad., -iistration, operations and financial condition of ae OPTM and, in respect of the Project, of the departments or agencies of the Bo, rwer responsible for carrying out any part of the Project, and other matters relating to the purposes of the Credit; and (b) 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 economic conditions in the territories of the Borrower, including its balance of payments, and the external debt of the Borrower, of any of its political subdivisions and of any agency of the Borrower or of any such political subdivision. Section 4.02. (a) The Borrower shall furnish or cause to be furnished to the Association all such information as the Association shall reasonably request concerning the administration, operations and financial condition of the OPTM and, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out any part of the Project. 7 (b) The Borrower and the Association 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 maintenance of the service thereof, the performance by either of them of its obligations under the Development Credit Agreement or the performance by the OPTM of its obligations under the Project Agreement and the Subsidiary Loan Agreement. Section 4.03. 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. ARTICLE V Taxes and Restrictions Section 5.01. The principal of, and service charges on, the Credit shall be paid without deduction for, and free from, any taxes imposed under the laws of the Borrower or laws in effect in its territories. Section 5.02. The Development Credit Agreement, the Project Agreement and the Subsidiary Loan Agreement shall be free from any taxes on or in connection with the execution, delivery or registration thereof, imposed under the laws of the Borrower or laws in effect in its territories. Section 5.03. The payment of the principal of, and service charges on, the Credit shall be free from all restrictions, regulations, controls and moratoria of any nature imposed under the laws of the Borrower or laws in effect in its territories. ARTICLE VI Remedies of the Association Section 6.01. If any event specified in Section 7.01 of the General Conditions or in Section 6.03 of this Agreement shall occur and shall continue for the period, if any, therein set forth, then at any subsequent time during the continuance thereof, the Association, at its option, may by notice to the Borrower declare the principal of the Credit then outstanding to be due and payable immediately together with the service charges thereon, and upon any such declaration such principal and service charges shall become due and payable immediately, anything to the contrary in the Development Credit Agreement notwithstanding. 8 Section 6.02. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified: (a) The OPTM shall have failed to perform any covenant, agreement or obligation of the OPTM under the Project Agreement or the Subsidiary Loan Agreement. (b) An extraordinary situation shall have arisen which shall make it improbable that the OPTM will be able to perform its obligations under the Project Agreement or the Subsidiary Loan Agreement. (c) Ordonnance No. 62/PG-RM dated November 29, 1960 or the Annex thereto as amended and supplemented by Law No. 65-10/AN-RM dated March 13, 1965, or Decree No. 383 dated December 28, 1960, shall have been amended, suspended, abrogated, repealed or waived in such a way as to materially and adversely affect the ability of the OPTM to carry out the covenants, agreements and obligations set forth in the Project Agreement or the Subsidiary Loan Agreement. Section 6.03. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified: (a) any event specified in paragraph (a) of Section 6.02 of this Agreement shall occur and shall continue for a period of thirty days after notice thereof shall have been given by the Association to the Borrower and the OPTM; or (b) any event specified in paragraph (c) of Section 6.02 of this Agreement shall occur. ARTICLE VII Effective Date; Termination Section 7.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 10.01 (b) of the General Conditions: (a) the execution and delivery of the Project Agreement on behalf of the OPTM have been duly authorized or ratified by all necessary administrative and governmental action; (b) the execution and delivery of the Subsidiary Loan Agreement on behalf of the Borrower and the OPTM, respectively, have been duly authorized or ratified by all necessary administrative and governmental action; 9 (c) the engineering consultants referred to in Section 2.02 (a) of the Project Agreement have been employed; (d) arrangements satisfactory to the Association for the continued employment of a qualified and experienced financial adviser to the OPTM for its accounting organization have been made; and (e) arrangements satisfactory to the Association have been made to set off (i) the deficits of the Telecommunications Department prior to 1968 and (ii) unpaid charges for telecommunications services rendered to the Borrower by the OPTM through December 31, 1971, against the amount due to the Borrower by the OPTM in respect of telecommunications as of December 31, 1971. Section 7.02. The following are specified as additional matters, within the meaning of Section 10.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association: (a) that the Project Agreement has been duly authorized by, and executed and delivered on behalf of, the OPTM, and constitutes a valid and binding obligation of the OPTM in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, the Borrower and the OPTM, respectively, and constitutes valid and binding obligations of the Borrower and of the OPTM in accordance with its terms. Section 7.03. The date November 1, 1972 is hereby specified for the purposes of Section 10.04 of the General Conditions. Section 7.04. The obligations of the Borrower under Sections 3.02 and 4.02 (a) of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date twenty years after the date of this Agreement, whichever shall be the earlier. ARTICLE VIII Representative of the Borrower; Addresses Section 8.01. Except as provided in Section 2.09 of this Agreement, the Minister responsible for Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 9.03 of the General Conditions. 10 Section 8.02. The following addresses are specified for the purposes of Section 9.01 of the General Conditions: For the Borrower: Ministry of Finance Bamako, Koulouba Republic of Mali Cable address: Minifinances Bamako 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. Telex: 440098 (ITT) or 24423 (RCA) IN WITNESS WHEREOF, the parties hereto, acting through their esentatives thereunto duly authorized, have caused this Agreement to be signed in their respective names and to be delivered in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF MALI By /s/ Seydou Traord Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Mohamed Shoaib Vice President 11 SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of amounts of the Credit to each Category and the percentage of eligible expenditures so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed I. Equipment and '716,000 100% of foreign Services for expenditures and Parts A and B 45% of local of the Project expenditures II. Equipment and 2,173,000 100% of foreign Services for expenditures and Parts C and D 45% of local of the Project expenditures III. Vehicles, tools 125,000 100% of foreign materials and expenditures and and miscellaneous 45% of local works expenditures IV. Civil Works 198,000 54% of total expenditures V. Consultants' 98,000 100% of foreign Services expenditures VI. Services of 100,000 100% of foreign Expert in expenditures organization and management VII. Unallocated 190,000 TOTAL 3,600,000 12 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures for goods produced in, or services supplied from, the territories, and in the currency, of any country other than the Borrower; and (b) the term "local expenditures" means expenditures in the currency of ,he Borrower, or for goods produced in, or services supplied from, the territories of the Borrower. (c) the term "total expenditures" means the aggregate of foreign and local expenditures. 3. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of: (a) expenditures prior to the date of this Agreement; and (b) payments for taxes imposed under the laws of the Borrower or laws in effect in its territories on goods or services, or on the importation, manufacture, procurement or supply thereof. To the extent that the amount represented by the percentage set forth in the third column of the table in paragraph I above in respect of any Category would exceed the amount payable net of all such taxes, such percentage shall be reduced to ensure that no proceeds of the Credit will be withdrawn on account of payments for such taxes. 4. Notwithstanding the allocation of an amount of the Credit set forth in the second column of the table in paragraph 1 above: (a) if the estimate of the expenditures under any Category shall decrease, the amount of the Credit then allocated to such Category and no longer required therefor will be reallocated by the Association by increasing correspondingly the unallocated amount of the Credit; (b) if the estimate of the expenditures under any Category shall increase, the percentage set forth in the third column of the table in paragraph I above in respect of such expenditures shall be applied to the amount of such increase, an( a corresponding amount will be allocated by the Association, at the request of the Borrower, to such Category from the unallocated amount of the Credit, subject, however, to the requirements for contingencies, as determined by the Association, in respect of any other expenditures; and 13 (c) if the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in Section 2.04 of the Project Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. 5. Notwithstanding the percentages set forth in the third column of the table in paragraph I above, if the estimate of foreign expenditures under Category IV shall increase and no proceeds of the Credit are available for reallocation to such Category, the Association may, by notice to the Borrower, adjust the percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 14 SCHEDULE 2 Description of the Project The Project comprises the OPTM's 1972-1975 telecommunications program, which includes the planning and implementation of certain institutional reforms, as well as rehabilitating and expanding the principal local and long-distance telecommunications facilities through procurement and construction and erection works, as follows: A. the rehabilitation of existing switching equipment, the addition of 1,000 lines of switching equipment to the Bamako automatic telephone exchange, and the replacement of manual equipment in five provincial towns by 1,300 lines of automatic switching equipment; B. the expansion of cable distribution and subscriber facilities to provide for approximately 2,500 additional direct exchange connections and the rehabilitation of existing cable distribution and subscriber facilities; C. the construction of a microwave link between Bamako, Segou, San and Mopti, with multiplexing equipment and trunk switching equipment for 60 channels, expandable to 960; D. the rehabilitation of open-wire routes and the expansion by VHF of spur routes originating from towns along the microwave link; and E. the planning and implementation of a modern system of accounts and of collection of charges for services; the revaluation of assets and the carrying out of a study of the levels and structure of OPTM's tariffs for telecommunications services. The Project is expected to be completed by December 31, 1975.