Ghana - Livestock Development Project : Credit 0500 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 500 GH Development Credit Agreement (Livestock Development Project) BETWEEN REPUBLIC OF GHANA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JULY 26, 1974 CONFORMED COPY CREDIT NUMBER 500 GH Development Credit Agreement (Livestock Development Project) BETWEEN REPUBLIC OF GHANA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JULY 26, 1974 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated July 26, 1974, between REPUBLIC OF GHANA (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 Proj-ct described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) Parts A and B of the Project will be carried out by Ghana Livestock Company Limited with the Borrower's assistance and, as part of such assistance, the Borrower will make available to Ghana Livestock Company Limited a portion of 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 a project agreement of even date herewith between the Association and Ghana Livestock Company Limited; 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: (a) "Branam Ranch" means a maize farm (including about 3,000 acres of cleared land and improvements) owned by the State Farms Corporation and located about 20 miles north of Wenchi; 4 (b) "GLC" means the Ghana Livestock Company Limifted, a private limited liability company established under the Ghana Companies Code, 1963 (Act 179); (c) "Goods" includes livestock; (d) "Pong Tamale Ranch" means the portion, to be agreed between the Borrower and GLC, of a cattle ranch owned by the Ministry of Agriculture of the Borrower and located about 20 miles north of the town of Tamale, such portion to comprise about 12,800 acres of land and to include improvements and livestock; (e) "Project Agreement" means the agreement between the Association and GLC of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement; (f "State Farms Corporation" means a public corporation established by the State Farms Corporation Instrument (Executive Instrument No. 323) of 1962, as continued in existence by the State Farms Corporation Instrument (Legislative Instrument No. 398) of 1965 of the Borrower; (g) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and GLC pursuant to Section 3.01(c) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreement; and (h) "Tadzewu Ranch" means a cattle ranch of about 1,500 acres (including improvements and livestock) owned by the State Farms Corporation and located about 15 miles northwest of the town of Denu. 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 two million dollars ($2,000,000). 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 and to be financed out of the proceeds of the Credit, provided that no withdrawals shall be made in respect of Categories 5 I, II and III of paragraph I of Schedule I until the Association has been provided with evidence satisfactory to it that 75% of the authorized share capital of GLC has been issued and is fully paid. 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 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 2.03 of the Project Agreement. Section 2.04. The Closing Date shall be June 30, 1981 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%) pcr 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 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(a) of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out Parts C and D of the Project with due diligence and efficiency and in conformity with appropriate administrative and financial practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Without any limitation or restriction upon any of its other obligations under the Development Credit Agreement, the Borrower shall cause GLC to perform in accordance with the provisions of the Project Agreement and the Subsidiary 6 Loan Agreement all the obligations therein set fort!,, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources necessary or appropriate to enable GLC to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance or the accomplishment of the purposes of the Project. (c) The Borrower shall relend the proceeds of the Credit for carrying out Parts A and B of the Project to GLC under a Subsidiary Loan Agreement to be entered into between the Borrower and GLC, such agreement to provide, inter alia, that GLC shall borrow said amount at an interest rate of not less than 8% per annum for a term of sixteen years, including a six year grace period as to principal, and to contain such other terms and conditions as have been approved by the Association. (d) 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, amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. Section 3.02. Without limitation on the obligations of the Borrower under Section 3.01 to this Agreement, the Borrower shall take or cause to be taken all such action as shall be necessary to acquire promptly as needed all such land, interests in land and rights in respect of land as shall be required for carrying out Part A of the Project. Section 3.03. The Borrower shall cause the Veterinary Services Division of its Ministry of Agriculture to provide adequate veterinary services, on terms and conditions generally applicable to such services, to GLC and participating farmers in the areas served by the Project. Section 3.04. The Borrower shall issue promptly as needed, import licenses for supplies required for purposes of the Project, visas and work permits for all expatriate staff required by GLC and shall take all action required to facilitate the procurement and import of breeding stock for the Project. Section 3.05. The Borrower shall cause GLC to (i) 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 Project; (ii) enable the Association's representatives to inspect the project, the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) furnish to the Association all such information as the Association shall reasonably 7 request concerning the Project, the expenditures of the proceeds of the Credit and the goods and services financed out of such proceeds. Section 3.06. (a) The Borrower shall carry out Part C of the Project pursuant to a program developed in consultation with the Association. (b) In carrying out Part D of the Project, the Borrower shall employ agricultural consultants acceptable to the Association under terms and conditions satisfactory to the Association. Section 3.07. The Borrower shall transfer all property and assets of the Pong Tamale Ranch, and shall cause the State Farms Corporation to transfer all property and assets of Tadzewu and Branam Ranches, to GLC, in each case in consideration of the transfer by GLC of its stock and debentures, pursuant to purchase agreements satisfactory to the Association. Such agreements shall set out in detai' the property and assets so to be transferred and shall provide for the resettlement, or transfer to GLC, of the staff employed on such Ranches. Such debentures shall bear interest at the rate of 8% per annum and shall not mature earlier than 16 years after such transfer. ARTICLE IV Remedies of the Association Section 4.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified: (a) GLC shall have failed to perform any covenant, agreement or obligation of GLC under the Project Agreement or the Subsidiary Loan Agreement; (b) An extraordinary situation shall have arisen which shall make it improbable that GLC will be able to perform its obligations under the Project Agreement or the Subsidiary Loan Agreement; (c) An order shall have been made, or a resolution shall have been adopted for the winding up, dissolution or liquidation of GLC without the prior concurrence of the Association; (d) GLC shall have sold, leased, transferred or otherwise disposed of a substantial portion of its property or assets financed in part out of the proceeds of the Credit other than in the ordinary course of its business without the prior concurrence of the Association; and 8 (e) without the prior consent of the Association, any of the agreements entered into by GLC for its financing shall have been assigned, amended, suspended or otherwise waived. Section 4.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified: (a) the events specified in paragraph (a) or (e) of Section 4.0 1 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 GLC; and (b) any event specified in paragraphs (c) and (d) of Section 4.01 of this Agreement shall occur. ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as additional conditions to thu 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 GLC shall 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 GLC shall have been duly authorized or ratified by all necessary corporate and governmental action; (c) GLC shall have appointed a Managing Director as provided for in Section 3.02 of the Project Agreement; (d) GLC shall have entered into arrangements satisfactory to the Association for the provision of finance to GLC; and (e) the Borrower, the State Farms Corporation and GLC shall have entered into agreements for the transfer of the property and assets of the Tadzewu, Branan and Pong Tamale Ranches as provided in Section 3.07 of this Agreement. Section 5.02. 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: 9 (a) that the Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, GLC and constitutes a valid and binding obligation of GLC in accordance with its terms; (b) that the Subsidiary Loan Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, the Borrower and GLC, respectively, and constitutes a valid and binding obligation of the Borrower and GLC in accordarce with its terms; and (c) the agreements referred to in Section 5.01(e) are valid, legally binding and enforceable in accordance with their terms. Section 5.03. The date October 25, 1974 is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.04. The obligations of the Borrower under Article 3 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date 20 years after the date of this Agreement, whichever shall be the earlier. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. 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 6.02. The following addresses are specified for the purposes of Section 11.0 1 of the General Conditions: For the Borrower: The Principal Secretary Ministry of Economic Planning P.O. Box M 76 Accra, Ghana Cable address: ECONOMICOM Accra 10 For the Asso-,iation: 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 GHANA By /s/ Harry Reginald Amonoo Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s / R. Chaufournier Regional Vice President Western Africa 0 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 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 1. Investment in 970,000 60% infrastructure, equipment and breeding and incremental fattening stock for ranches 2. Credit to farmers 260,000 60% for livestock development 3. Expatriate 210,000 100% of foreign staff costs expenditures and 70% of local expenditures 4. Preparation of 90,000 100% of foreign second stage expenditures and livestock proj- 70% of local ect and overseas expenditures training 5. Unallocated 470,000 TOTAL 2,000,000 2. For the purposes of this Schedule: (a) 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; and 12 (b) the term "local expenditures" means expenditures in the currency of the Borrower for goods or services supplied from the territory of 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. 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: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to another Category and which in the opinion of the Association are not needed to meet other expenditures, and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 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. 13 SCHEDULE 2 Description of the Project The Project is part of the Borrower's program for the development of a commercial cattle industry in Ghana and consists of the following components: Part A: The development of three breeding/fattening ranches by rehabilitating and expanding Tadzewu, Pong Tamale and Branam Ranches including land clearing, fencing, provision of watering facilities, improvement of pastures and the purchase of breeding cattle; ranch management and in-service training. Part B: The improvement of about 50 privately owned herds, of between 10 and 400 head each, in the areas within roughly 25 miles of the abovementioned Ranches, by provision of technical advice and credit to farmers to finance such items as improved breeding stock, spray races, fencing materials, land clearing and pasture improvement materials. Part C: The overseas training of Ghanaian ranch managers. Part D: Feasibility studies for the identification of further ranch sites and the preparation of a second stage livestock project. The Project is expected to be completed by December 1980.