Ghana - Second Water Supply Project : Credit 0499 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 499 GH Development Credit Agreement (Second Water Supply Project) BETWEEN REPUBLIC OF GHANA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JULY 26, 1974 CONFORMED COPY CREDIT NUMBER 499 GH Development Credit Agreement (Second Water Supply Project) BETWEEN REPUBLIC OF GHANA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JULY 26, 1974 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated July 26, 1974, between REPUBLIC OF GI-IANA (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 foreign exchange cost of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) The Borrower has further requested the Canadian International Development Association and the African Development Bank to assist in the financing of the foreign exchange cost of the Project; (C) The Project will be carried out by Ghana Water and Sewerage Corporation (hereinafter called GWSC) with the Borrower's assistance and, as part of such assistance, the Borrower will make available to GWSC the proceeds of the Credit as hereinafter provided; and (D) The Association is willing to make the Credit available upon the terms and conditions set forth hereinafter and in a project agreement of even date herewith between the Association and GWSC; 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 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 following additional terms have the following meanings: 4 (a) "ADB" means the African Development Bank; (b) (i) "ADB Loan Agreement" means the agreement to be entered into between ADB and GWSC providing for a loan to be made by ADB to GWSC in respect of Parts A(3)(a), A(4), A(5) and A(7)(a) of the Project; (ii) "ADB Guarantee Agreement" means the agreement to be entered into between ADB and the Borrower providing for the guarantee of the loan referred to in paragraph (i) of this sub-section; and (iii) "ADB Agreements" means the ADB Loan Agreement and the ADB Guarantee Agreement. (c) "ATMA Organization" means the division within GWSC responsible for the provision of water and sewerage services principally in the Accra - Tema Metropolitan Area. (d) "CIDA" means the Canadian International Development Agency; (e) "CIDA Agreements" means the two agreements to be entered into between CIDA and the Borrower respectively providing for a loan and grant to be made by CIDA to the Borrower in respect of Parts A(2) and A(3)(b) of the Project and of consultants services relating to the Project; (f "First Development Credit Agreement" means the development credit agreement between the Borrower and the Association dated August 28, 1969; (g) "First Project Agreement" means the project agreement between the Association and GWSC dated August 28, 1969; (h) "Ghana Water and Sewerage Corporation Act" means the Ghana Water and Sewerage Corporation Act, 1965 (Act 3 10), as amended by the Ghana Water and Sewerage Corporation Act, 1965, (Amendment) Decree, 1968 (N.L.C.D. 247) and the Ghana Water and Sewerage Corporation Act 1965, (Amendment) Decree, 1969 (N.L.C.D. 391); (i) "Project Agreement" means the agreement (including the schedules thereto) between the Association and GWSC of even date herewith, as the same may be amended from time to time; and 5 (k) "Subsidiary Loan Agreement" means the agreement (including the schedules thereto) to be entered into between the Borrower and GWSC providing for the onlending of the proceeds of the Credit. 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 ten million four hundred thousand dollars ($ 10,400,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule I 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 and to bo financed out of the proceeds of the Credit. Section 2.03. Except as the Association shall otherwise agree, contracts for the purchase of goods or for the carrying out of works or services (other than consultants' services) for the Project and to be financed out of the proceeds of the Credit, shall be awarded in accordance with the provisions set forth or referred to in Section 2.04 of the Project Agreement. Section 2.04. The Closing Date shall be June 30, 1980 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 June 15 and December 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each June 15 and December 15 commencing December 15, 1984 and ending June 15, 2024, each installment to and including the installment payable on June 15, 1994 to be one-half of one per cent (1/2 of E%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. 6 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. Section 2.09. The Senior Principal Secretary, Ministry of Finance 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 Section 3.01. Without any limitation or restriction upon any of its other obligations under the Development Credit Agreement, the Borrower shall cause GWSC to perform in accordance with the provisions of the Project Agreement and the Subsidiary Loan Agreement all the obligations therein set forth, shall take and cause to be taken all action, including the provision of funds on terms and conditions satisfactory to the Association, and of facilities, services and other resources, necessary or appropriate to enable GWSC to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. Section 3.02. (a) Without limitation to the provisions of Section 3.01 hereof, the Borrower shall relend the proceeds of the Credit to GWSC under a subsidiary loan agreement to be entered into between the Borrower and GWSC under terms and conditions which shall have been approved by the Association. (b) The Borrower shall exercise its rights under the Subsidiary Loan Agreement, under the CIDA Agreements and under the ADB Guarantee Agreement in such manner as to protect the interests of the Borrower, GWSC 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 any such agreement or any provision thereof in a manner materially and adversely affecting such interests or purposes. ARTICLE IV Financial and Other Covenants Section 4.01. The Borrower shall take such action as may be necessary to enable GWSC to establish and maintain the rates and charges for its water supply and sewerage services referred to in Section 4.02 of the Project Agreement at the levels therein specified. 7 Section 4.02. By not later than December 31, 1974 the Borrower shall amend the arrangements with GWSC referred to in Section 4.06 of the First Development Credit Agreement so as to provide that: (i) payment of the amount therein referred to shall be made over a term of 20 years commencing on July 1, 1979; and (ii) GWSC shall pay to the Borrower interest on the unpaid balance of such amount at the rate of 6-1/2% per annum accruing as from July 1, 1979 but so that such arrangements shall otherwise remain in full force and effect in accordance with the provisions of the said Section. Section 4.03. (a) Except as the Association shall otherwise agree, in the event that the Borrower shall request GWSC to undertake responsibility for the carrying out or operation of any existing or proposed water supply or sewerage project or for the provision of any existing or proposed water supply or sewerage service, including the construction or installation of facilities required therefor, and that such project or service would not be financially viable, the Borrower shall reimburse to GWSC the amount of all capital and development costs and the amount of all operating losses incurred by GWSC arising out of or in connection with the compliance by GWSC with such request. (b) The Borrower and the Association agree that, as from the date hereof, Section 4.09 of the First Development Credit Agreement be and it is hereby deleted and that the provisions of subsection (a) hereof shall be substituted therefor. Section 4.04. The Borrower shall cause its ministries and departments to pay to GWSC all amounts due to it (which amounts shall be subject to review by the Borrower and GWSC), in the case of amounts due at the date hereof by June 30, 1975 and in the case of amounts becoming due after the date hereof within 3 months of the date of billing therefor. Section 4.05. (a) The Borrower shall not carry out, or permit the carrying out of, any project, scheme or any other development which may materially and adversely affect the quantity or quality of water available from the Weija reservoir. (b) The Borrower shall, or shall cause GWSC to, establish and maintain by not later than June 30, 1975, and thereafter review from time to tine, in each case in consultation with the Association, operating procedures (utilizing the data to be collected pursuant to Section 3.04 of the Project Agreement) to determine the allocation of water from the Weija Reservoir as between public 8 consumption and other purposes and to ensure that, in the event of actual or potential water shortage, priority in such allocation is accorded to the provision of water for public consumption. (c) The Borrower shall have due regard to the said procedures in carrying out or permitting the carrying out of any project, scheme, or other development which involves the utilization of water from the Weija Reservoir. Section 4.06. The Borrower shall consult with the Association about any proposed appointment to the position of Managing Director of GWSC sufficiently in advance of any such appointment for the Association to have adequate opportunity to comment on the qualifications and experience of the person the Borrower is considering for the position and shall make any such appointment only after due consideration of the views expressed by the Association. Section 4.07. Without limitation to the provisions of Section 5.01(c) hereof, the Borrower shall consult, and shall cause GWSC to consult, with the Association about any proposed material change in the structure of its organization and operations sufficiently in advance of any such change for the Association to have adequate opportunity to comment thereon and shall make any such change only after due consideration of the views expressed by the Association. ARTICLE V Remedies of the Association Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified: (a) The Borrower or GWSC shall have failed to perform any of their respective obligations under the Subsidiary Loan Agreement or GWSC shall have failed to perform any of its obligations under the Project Agreement; (b) The Borrower or GWSC shall have failed to perform any of their obligations under the CIDA Agreements, the ADB Agreements, the First Development Credit Agreement (except as referred to in Section 7.01 of the General Conditions therein referred to) or the First Project Agreement, in a manner materially and adversely affecting the interests of the Borrower, GWSC or the Association or the purposes of the Credit; (c) The Ghana Water and Sewerage Corporation Act or the status, organization, powers or responsibilities (including as to areas served) of the ATMA 9 Organization shall, prior to the termination of the Project Agreement in accordance with its terms, have been amended, without the agreement of the Association, in a manner materially and adversely affecting the carrying out of the Project or the operations or financial condition of GWSC or the ATMA Organization; (d) As a result of events which have occurred after the date of the Development Credit Agreement an extraordinary situation shall have arisen which shall make it improbable that GWSC will be able to perform its obligations under the Project Agreement. Section 5.02. 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 5.01 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 and GWSC; (b) any event specified in paragraph (b) of Section 5.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Association to the Borrower and GWSC; (c) any event specified in paragraph (c) of Section 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as an additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01(b) of the General Conditions: (a) The execution and delivery of the Project Agreement on behalf of GWSC have been duly authorized or ratified by all necessary corporate and governmental action; (b) The execution and delivery of the Subsidiary Loan Agreement on behalf of the Borrower and GWSC, respectively, have been duly authorized or ratified by all necessary corporate and governmental action; (c) Arrangements satisfactory to the Association shall have been made for the increase as from August 1, 1974 (or such other date as the Association may 10 agree) of the water supply tariffs of GWSC to such levels as shall enable it to fulfill the requirements of Section 4.02 of the Project Agreement in respect of its fiscal year ending June 30, 1975; and (d) either (i) CIDA, ADB, the Borrower and GWSC shall have entered into the CIDA Agreements and the ADB Agreements to which they are respectively party, and that all conditions precedent to the effectiveness of such agreements (except as to the effectiveness of the Development Credit Agreement) shall have been satisfied, or (ii) The Association shall otherwise be satisfied that suitable provision has been made for the financing of the estimated foreign exchange costs of the Project. Section 6.02. The following are specified as additional matters, within the meaning of Section 12.02(b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association, namely, that: (a) That the Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, GWSC, and constitutes a valid and binding obligation of GWSC 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 GWSC, respectively, and constitutes a valid and binding obligation of the Borrower and GWSC in accordance with its terms. Section 6.03. The date October 24, 1974 is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.04. The obligations of the Borrower under Article IV of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date 25 years after the date of this Agreement, whichever shall be the earlier. 11 ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Senior Principal Secretary, Ministry of Finance 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 11.0 1 of the General Conditions: For the Borrower: Principal Secretary Ministry of Economic Planning P.O. Box M.76 Accra Cable address: ECONOMICOM Accra 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 12 in their respective names in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF GHANA By /s/ Harry Reginald Amonoo Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ R. Chaufournier Regional Vice President Western Africa 13 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 the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed I. Civil works for 4,900,000 100% of foreign Part A(1) of the expenditures Project II. Equipment and Materials (a) Parts A(6), 450,000 100% of foreign A(8) and expenditures A(9) of the Project (b) Part A(7)(b) 1,200,000 100% of foreign of the Project expenditures (c) Part B of 650,000 100% of foreign the Project expenditures III. Consultants' 1,100,000 100% of foreign services in expenditures respect of (a) design and pre- paration of bid documents for Parts A and B of the Project 14 Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (b) procurement and supervision for Parts A(1) and B of the Project IV. Technical Assist- 250,000 100% of foreign ance in respect of expenditures Parts C and D of the Project V. Unallocated 1,850,000 TOTAL 10,400,000 2. For the purposes of this Schedule the term "foreign expenditures" means expenditures for goods or services supplied from the territory, and in the currency, of any country other than the Borrower. 3. The disbursement percentages have been calculated in compliance with the policy of the Association that no proceeds of the Credit shall be disbursed on account of 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; to that end, if any event occurs which shall affect the amount of any such taxes included in the cost of any item to be financed out of the proceeds of the Credit, the Association may, by notice to the Borrower, correspondingly adjust the disbursement percentage then applicable to such item. 4. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of expenditures prior to the date of this Agreement, except that withdrawals may be made in respect of Categories I, III or IV on account of expenditures incurred after September 30, 1972 in an aggregate amount not exceeding the equivalent of $2,000,000 or such other amount as the Association may agree. 15 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph I above, if the Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Association may, by notice to the Borrower, reallocate to such Category to the extent required to meet the estimated shortfall proceeds of the Credit which are then allocated to another Category. 6. 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 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 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. 16 SCHEDULE 2 Description of the Project The Project comprises the further expansion and development of the water supply system in and adjacent to the Accra-Tema Metropolitan Area. The Project consists of the following parts: Part A Urban Water Supply (1) The construction at Weija of an approximately 55 foot high earth dam and associated works on the Densu River and of a raw water pump house, together with intake works serving the pumping station included in the Project and the existing pumping station at Weija. (2) The installation of raw water pumps of approximately 20 million imperial gallons per day (migpd) capacity in the pump house included in Part A(1) of the Project, together with associated electrical and mechanical equipment, to transfer water from the reservoir to the water treatment plant included in the Project. (3) (a) The construction at Weija of water treatment plant structures; and (b) The installation in such structures of water treatment plant of approximately 20 migpd capacity. (4) The construction of a service reservoir and of an elevated water tank of approximately 5 million and 10,000 imperial gallons capacity respectively. (5) The installation of approximately 38,000 ft of raw and treated water transmission pipelines connecting the pumping station, treatment plant and service reservoir included in the Project and the existing Accra water transmission and distribution systems, including associated connections anC. facilities. (6) The expansion of the existing raw water pumping station and treatment plant at Weija to a capacity of approximately 13 migpd. (7) The extension of the existing water distribution system in the Accra-Tema Metropolitan Area in accordance with the annual programs referred to in Section 3.06 of the Project Agreement, comprising: 17 (a) the installation of approximately 20 miles of pipeline for the primary distribution system; (b) the provision of pipes, fittings and other equipment for the secondary and tertiary distribution systems; and (c) the laying of the equipment provided for under paragraph (b) hereof. (8) The installation of water meters to service all new water connections to users in the Accra-Tema Metropolitan Area, including the provision of spares. (9) The provision of waste water meters and other leakage detection facilities, equipment and spares. Part B Rural Water Supply The extension of water supply in the area of approximately 1,000 square miles to the north of the Accra-Tema Metropolitan Area, inc, 'In - the laying of approximately 110 miles of small diameter water transmission and distribution pipeline, the construction of six small service reservoirs and of seven maintenance yards, the installation of additional pumping sets and the provision of associated water transmission and distribution facilities and equipment. Part C Sewerage Program The preparation of an implementation program for the connection to individual users of the sewerage system provided for under the First Development Credit Agreement, and for minor extensions of such system. Part D Training The carrying out of the training program for the staff of GWSC, including the provision of faci iles and equipment therefor, referred to in Section 3.06(b) of the Project Agreement. The Project is expected to be completed by December 31, 1979.