Sri Lanka - Program Credit Project : Credit 0512 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 512 CE Development Credit Agreement (Program Credit Project) BETWEEN REPUBLIC OF SRI LANKA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED SEPTEMBER 24, 1974 CONFORMED COPY CREDIT NUMBER 512 CE Development Credit Agreement (Program Credit Project) BETWEEN REPUBLIC OF SRI LANKA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED SEPTEMBER 24, 1974 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated September 24, 1974, between REPUBLIC OF SRI LANKA (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). 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 March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agreements of the Association 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 term "Eligible Agencies and Enterprises" means such agencies, corporations or enterprises, as shall be notified from time to time by the Borrower to the Association, in the sectors listed in Schedule 4 to this Agreement as such Schedule may be amended from time to time by agreement between the Borrower and the Association. 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 fifteen million dollars ($15,000,000). 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 The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time, for expenditures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 out of the proceeds of the Credit. Section 2.03. Except as the Association shall otherwise agree, contracts for the purchase of goods required for the carrying out of the Project and to be financed 4 out of the proceeds of the Credit and to be procured by public sector corporations and agencies, estimated to cost the equivalent of $50,000 or more, shall be awarded in accordance with the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be December 30, 1975 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 May I and November 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each May I and November 1 commencing November 1, 1984, and ending May 1, 2024, each installment to'and including the installment payable on May 1, 1994 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 United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out the Project, or cause the Project to be carried out, with due diligence and efficiency. (b) The Borrower shall: (i) promptly upon receipt of appropriate applications from Eligible Agencies and Enterprises, issue, or cause to be issued, such import licenses as shall be required to carry out the Project: and (ii) make available, or cause to be made available, promptly as needed, all foreign exchange which shall be required to carry out the Project. Section 3.02. The Borrower shall cause the goods to be financed ;ut of the proceeds of the Credit to be insured, or shall cause adequate provision to be made for the insurance thereof, against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. 5 Section 3.03. (a) The Borrower shall furnish to the Association, promptly upon their preparation, all plans and programs for the Project, and any modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) The Borrower: (i) shall maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Credit, and to disclose the use thereof in the Project; (ii) shall enable the Association's accredited representatives to examine the Project, the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish to the Association all such information as the Association shall reasonably request concerning the Project, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. Section 3.04. The Borrower shall cause the proceeds of the Credit to be used exclusively for the Project. ARTICLE IV Other Covenantv Section 4.01. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. Section 4.02. (a) The Borrower shall cause the Central Bank of Ceylon to open an account (hereinafter referred to as the Project Account), in the name of the Borrower, and to credit to the Project Account, upon each withdrawal from the Credit Account, the equivalent in Rupees of the currency or currencies withdrawn from the Credit Account (such equivalent to be determined as of the respective dates of such withdrawals). (b) Except as the Association shall otherwise agree, the amounts credited to the Project Account shall be used exclusively to finance such development expenditures as may be indicated in the 1974 and forthcoming 1975 budgets of the Borrower. (c) The Borrower shall cause the Central Bank of Ceylon to prepare monthly statements of expenditures under the Project Account and to forward said statements to the Association for its review not later than two weeks after the end of each month. 6 ARTICLE V Remedies of the Association Section 5.01. For the purpose of Section 6.02 of the General Conditions, the following additional event is specified, namely that the Association shall at any time have determined, after reviewing in consultation with the Borrower the progress being made by the Borrower in the carrying out of the Project, that the purpose for which the Credit is extended is not likely to be achieved. ARTICLE VI Termination Section 6.01. The date November 25, 1974 is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.02. The obligations of the Borrower under Section 4.01 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date 15 months after the date of this Agreement, whichever shall be the earlier. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Secretary of the Ministry of Planning and Economic Affairs of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: The Secretary Ministry of Planning and Economic Affairs Colombo Sri Lanka 7 Cable address: SECMINPLAN Colombo 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 Agreemen 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. REPUBLIC OF SRI LANKA By /s / Neville Kanakaratne Authorized Representatie IN'i.'RNATIONAL DEVELOPMENT ASSOCIATION By /s / Mervyn L. Weiner Regional Vice President South Asia 8 SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Category of imported items to be finaIced out of the proceeds of the Credit and the allocation of the Credit thereto: Amount of the Credit Allocated (Expressed in Category Dollar Equivalent) Raw materials, 15,000,000 components and spare parts for sectors listed in paragraph (A) of Schedule 4 and spare parts for sectors listed in paragraph (B) thereof TOTAL 15,000,000 2. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of: (a) expenditures in the currency of the Borrower, or for goods or services supplied from, the territory of the Borrower; and (b) payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof. 3. If the Association shall have reasonably determined that the procurement of any item is inconsistent with the procedures set forth or referred to in this 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 9 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. 10 SCHEDULE 2 Description of the Project The Project forms a part of a program of the Borrower, for the import of goods into the territories of the Borrower for the purpose of improving the efficient utilization of existing productive capacity in agriculture and industry and the strengthening of selected essential services. 11 SCHEDULE 3 Procurement 1. With respect to any contract, estimated to cost the equivalent of $50,000 or more, for the purchase of goods to be financed out of the proceeds of the Credit and to be procured by a public sector corporation or agency: (a) offers sha)l be invited from not less than three of the major suppliers from the member countries of the Bank and Switzerland; and (b) the contract shall be awarded to the supplier whose offer is the lowest evaluated offer. 2. The Borrower shall retain, in its Central Bank, all relevant documentation relating to the goods procured by public sector corporations and agencies and to be financed out of the proceeds of the Credit, for review by the Association at its request. 3. Applications for withdrawal from the Credit Account in respect of contracts awarded to the lowest evaluated offer shall be submitted to the Association by the Central Bank of Ceylon with a statement that the purchasing corporation o; agency has certified that the conditions set forth in paragraph I of this Schedule have been satisfied, and with documentation on evidence of payment and of shipment together with the supplier's invoice. 12 SCHEDULE 4 Eligible Sectors Listed hereunder are the sectors from which the agencies and enterprises are to be selected: (A) 1. Agricultural engineering 2. Agricultural products processing 3. Pulp, paper and paper products 4. Packaging and containers 5. Base metals and metal working 6. Agricultural and industrial chemicals 7. Cables and wires 8. Auto ancillaries 9. Leather products 10. Mining 11. Textiles (B) 1. Agricultural and irrigation equipment 2. Commercial transport 3. Heavy earth-moving equipment 4. Power generation equipment