Honduras - Education Project : Credit 0452 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 452 HO Development Credit Agreement (Education Project) BETWEEN REPUBLIC OF HONDURAS AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JANUARY 9, 1974 CONFORMED COPY CREDIT NUMBER 452 HO Development Credit Agreement (Education Project) BETWEEN REPUBLIC OF HONDURAS AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JANUARY 9, 1974 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated January 9, 197; between REPUBLIC OF HONDURAS (hereinafter called the Borrower) and 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 I to the Loan Agreement of even date herewith between the Borrower and the International Bank for Reconstruction and Development (the latter hereinafter called the Bank, and said loan agreement hereinafter referred to as the Loan Agreement) by extending the Credit as hereinafter provided; (B) The Borrower has also requested the Bank to provide additional assistance towards the financing of the Project and by the Loan Agreement the Bank is agreeing to provide such assistance in an aggregate principal amount equivalent to three million dollars ($3,000,000) (hereinafter called the Loan); (C) The Borrower and the Association intend, to the extent practicable, that the proceeds of the Credit provided for in this Agreement be disbursed on account of expenditures on the Project before disbursements of the proceeds of the Loan provided for in the Loan Agreement are made; and WHEREAS the Association has agreed, on the basis inter alia of the foregoing, to extend the Credit to the Borrower Upon the terms and conditions hereinafter set forth; 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 following modifications thereof (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions): (a) Section 2.01(9) is deleted and the following is substituted therefor: 4 "9. The term "Project" means the project or projects or program or programs for which the Credit is granted, as described in the Loan Agreement and as the description thereof shall be amended from time to time by agreement between the Borrower, the Bank and the Association." (b) Section 5.01 is deleted; (c) Section 6.02(b) is deleted and the following is substituted therefor: "(b) The Borrower shall have failed to perform any other obligation under the Development Credit Agreement, the Bonds or the Loan Agreement (as such two terms are defined in the Development Credit Agreement)." (d) Section 6.02(h) is deleted and Section 6.02(i) becomes 6.02(h); (e) Section 7.01(c) is amended to read as follows: "(c) A default shall occur in the performance of any other obligation on the part of the Borrower under the Development Credit Agreement, the Bonds or the Loan Agreement (as such two terms are defined in the Development Credit Agreement), and such default shall continue for a period of 60 days after notice thereof shall have been given by the Bank or the Association to the Borrower." 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) "Loan Agreement" means the agreement of even date herewith between the Borrower and the Bank for the purpose of the Project, as such agreement may be amended from time to time; and such term includes the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated January 31, 1969, as made applicable to such agreement, all agreements supplemental to the Loan Agreement and all schedules to the Loan Agreement; (b) "Bonds" means bonds executed and delivered by the Borrower pursuant to the Loan Agreement; and such term includes any such bonds issued in exchange for, or on transfer of, Bonds as herein defined; and (c) The several terms defined in the Loan Agreement have the respective meanings therein set forth. 5 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 dollars ($3,000,000). 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 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 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. Section 2.03. Except as stated in Schedule 3 to the Loan Agreement, or as the Association shall otherwise agree, the goods and services (other than services of consultants) required for the Project and to be financed out of the proceeds of the Credit, shall be procured on the basis of international competition under procedures consistent with the Guidelines for Procurement under World Bank Loans and IDA Credits, published by the Bank in April 1972, as revised in October, 1972, and in accordance with, and subject to, the provisions set forth in such Schedule 3. Section 2.04. The Closing Date shall be June 30, 1978 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. Section 2.06. Service charges shall be payable semi-annually on February 15 and August 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each February 15 and August 15 commencing February 15, 1984, and ending August 15, 2023, each installment to and including the installment payable on August 15, 1993 to be one-half of 6 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 United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE HI Execution of the Project Consultation, Information and Inspection Section 3.01. Articles III and V and Sections 4.02 through 4.05, inclusive, of the Loan Agreement and Schedules 1 (together with its Exhibit), 3 and 4 thereto are hereby incorporated into this Agreement with the same force and effect as if they were fully set forth herein; provided, however, that (i) all references to the Bank in such Articles, Sections and Schedules or in any of them shall be deemed to be references to the Association, and (ii) all references to the Loan in such Articles, Sections and Schedules or in any of them shall be deemed to be references to the Credit. Section 3.02. So long as any part of the Loan or the Bonds shall remain outstanding and unpaid, all action taken, including approvals given, by the Bank pursuant to the Articles and Sections of the Loan Agreement enumerated in Section 3.01 of this Agreement, or of Section 2.03 of the Loan Agreement, shall be deemed to be taken or given in the name and on behalf of both the Bank and the Association; and all information furnished by the Borrower to the Bank pursuant to such provisions, shall be deemed to be furnished to both the Bank and the Association. ARTICLE IV Taxes and Restrictions Section 4.01. 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 4.02. The Development Credit 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. 7 Section 4.03. 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 V Remedies of the Association Section 5.01. If any event specified in Section 7.01 of the General Conditions or in Section 5.03 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 declaraLion such principal and service charges shall become due and payable immediately, anything to the contrary in the Development Credit Agreement notwithstanding. Section 5.02. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified: (a) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of INFOP or for the suspension of its operations: and (b) Decree Law No. 10 of the Borrower, dated December 28, 1972, shall have been materially amended, suspended, abrogated, repealed or waived so as to affect the Project adversely. Section 5.03. For the purposes of Section 7.01 of the General Conditions the following additional events are specified, namely, that the events specified in paragraphs (a) and (b) of Section 5.02 of this Agreement shall occur and shall continue for a period of 30 days after notice thereof shall have been given by the Association to the Borrower. ARTICLE VI Effective Date; Termination Section 6.01. 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: 8 (a) the conditions precedent to the effectiveness of the Loan Agreement have been fulfilled, subject only to the effectiveness of this Agreement; (b) the Project Unit has been established as required by Section 3.01(c) of the Loan Agreement; and (c) the Project Director and the Project Architect or Engineer referred to in Section 3.01(c) of the Loan Agreement have been appointed. Section 6.02. The date April 9, 1974 is hereby specified for the purposes of Section 10.04 of the General Conditions. Section 6.03. The obligations of the Borrower under Sections 4.02 through 4.05, inclusive, of the Loan Agreement incorporated by reference in Article III of this Agreement shall cease and determine oin the date on which the Development Credit Agreement shall terminate or oin a date thirty (30) years after the date of this Agreement, whichever shall be the earlier. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Ministro de Hacienda y Crdito Ptblico of the Borrower is designated as representative of the Borrower for the purposes of Section 9.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 9.01 of the General Conditions: For the Borrower: Ministerio de Hacienda y CrOdito Piblico Tegucigalpa, D.C. Honduras Cable address: HACIENDA Tegucigalpa, Honduras 9 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. 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 to be delivered in the District of Columbia, United States of America as of the day and year first above written. REPUBLIC OF HONDURAS By /s/ Roberto Galvez Barnes Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Gerald Alter Regional Vice President Latin America and the Caribbean 10 SCHEDULE 1 Withdrawal of the Proceeds of the Credit and of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit and of the Loan, the allocation of amounts of such proceeds to each Category and the percentage of eligible expenditures so to be financed in each Category: Amount of the Credit and of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed I. Furniture and Equipment (a) For Part D of 570,000 100% of foreign the Project expenditures or 100% of ex-factory price (b) For other edu- 1,110,000 100% of foreign cational and expenditures or training insti- 100% of ex-factory tutions price (c) For the Proj- 20,000 100% of foreign ect Unit expenditures or 100% of ex-factory price 11. Civil Works (includ- ing architectural consultants' fees) (a) For Part D of 400,000 52% of total the Project expenditures (b) For other edu- 1,770,000 52% of total cational and expenditures training in- stitutions 11 Amount of the Credit and of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed III. Technical Assistance (a) For INFOP 220,000 100% of foreign (Part G(ii) expenditures of the Proj- ect) (b) For other 410,000 100% of foreign purposes expenditures (Part G(i), (iii), (iv) and (v) of the Project) IV. Fellowships (a) For INFOP (Part 180,000 100% of total G(ii) of the expenditures Project) (b) For other pur- 90,000 100% of total poses (Part G expenditures (i),(iii),(iv) and (v) of the Project) V. Unallocated 1,230,000 TOTAL 6,000,000 2. For the purposes of this Schedule: (a) the tern "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 12 (b) the term "total expenditures" means the aggregate of foreign expenditures and of expenditures in the currency of the Borrower, or for goods produced in, or services supplied from, the territories of the Borrower. 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; (b) expenditures in respect of items under Categories I(a), 11(a), III(a) and IV(a) of the table set out in Paragraph I of this Schedule, unless the contractual arrangements between the Borrower and INFOP provided in Section 3.01(b) of the Loan Agreement have entered into force and have received the prior approval of the Association and the Bank; and (c) 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 or of the Loan will be withdrawn on account of payments for such taxes. In addition, except as the Borrower, the Association and the Bank shall otherwise agree, and until all amounts of the Credit shall have been withdrawn or committed, no withdrawals shall be made from the Loan Account referred to in Section 2.02 of the Loan Agreement, except under commitments entered into by the Bank pursuant to Section 5.02 of the General Conditions referred to in Section 1.01 of the Loan Agreement. 4. Notwithstanding the allocation of an amount of the proceeds of the Credit and of the Loan set forth in the second column of the table in paragraph I above: (a) if the estimate of the expenditures under any Category shall decrease, the amount of the proceeds of the Credit and of the Loan then allocated to such Category and no longer required therefor will be reallocated by the Association and by the Bank or, after full withdrawal of all amounts of the Credit, by the Bank, by increasing correspondingly the unallocated amount of the proceeds of the Credit and of the Loan; (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 1 above 13 in respect of such expenditures shall be applied to the amount of such increase, and a corresponding amount will be allocated by the Association and by the Bank or, after full withdrawal of all amounts of the Credit, by the Bank, at the request of the Borrower, to such Category from the unallocated amount of the proceeds of the Credit and of the Loan, subject, however, to the requirements for contingencies, as determined by the Association and by the Bank or, after full withdrawal of all amounts of the Credit, by the Bank, in respect of any other expenditures; and (c) if the Association and the Bank shall have reasonably determined that the procurcment of any item in any Category is inconsistent with the procedures set forth or referred to in Section 2.03 of this Agreement and of the Loan Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit or, after full withdrawal of all amounts of the Credit, of the proceeds of the Loan and the Association and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Association and the Bank under the Development Credit Agreement and the Loan Agreement, by notice to the Borrower, cancel such amount of the Credit and of the Loan as in the Association's and the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit or, after full withdrawal of all amounts of the Credit, of the proceeds of the Loan. 5. Notwithstanding the percentages set forth in the third column of the table set out in paragraph I above, if the estimate of total expenditures under Category II shall increase and no proceeds of the Credit and of the Loan are available for reallocation to such Category, the Association and the Bank or, after full withdrawal of all amounts of the Credit, the Bank, may, by notice to the Borrower, adjust the percentage then applicable to such expenditures in order that further withdrawals under any such Category may continue until all expenditures thereunder shall have been made.