Somalia - Mogadiscio Port Extension Project : Credit 0586 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 586 SO Development Credit Agreement (Mogadiscio Port Extension Project) BETWEEN SOMALI DEMOCRATIC REPUBLIC AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED OCTOBER 15, 1975 CONFORMED COPY CREDIT NUMBER 586 SO Development Credit Agreement (Mogadiscio Port Extension Project) BETWEEN SOMALI DEMOCRATIC REPUBLIC AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED OCTOBER 15, 1975 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated October 15, 1975, between SOMALI DEMOCRATIC REPUBLIC (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) By a development credit agreement (Detailed Engineering and Accounting Assistance Project) dated March 3, 1969 between the Borrower and the Association, the Association granted to the Borrower a credit in various currencies equivalent to five hundred fifty thousand dollars ($550,000) to assist in the financing of detailed engineering of Mogadiscio/Ras Sif Port works and the establishment of commercial accounting procedures for the Somali Port Authority; (B) By an agreement dated December 22, 1972, the Borrower has received a grant of Somali shillings 86,648,000 from the European Development Fund to assist the Borrower in the modernization of the port of Mogadiscio; (C) By a development credit agreement (Mogadiscio Port Project) dated March 15, 1973 between the Borrower and the Association (hereinafter called the 1973 Credit Agreement), the Association granted to the Borrower a credit in various currencies equivalent to twelve million nine hundred fifty thousand dollars ($12,950,000) to assist in the modernization of the port of Mogadiscio; (D) 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; (E) The Borrower will relend to Somali Port Authority funds equivalent to the proceeds of the Credit as hereinafter provided; and (F) 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 Somali Port Authority; 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 4 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) "SPA" means Somali Port Authority, a public agency established and operating under the laws of the Borrower; (b) "Project Agreement" means the agreement between the Association and SPA of even date herewith, as the same may be amended from time to time; and (c) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and SPA pursuant to Section 3.01(b) of this Agreement, as the same may be amended from time to time, and such term includes all schedules 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 five million two hundred thousand dollars ($5,200,000). 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 plroceeds of the Credit. Section 2.03. txcept as the Association shall otherwise agree, the goods, works and services (other than consultants' services) for the Project 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. 5 Section 2.04. The Closing Date shall be December 31, 1977 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. 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 1 and December I in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each June 1 and December 1 commencing December 1, 1985 and ending June 1, 2025, each installment to and including the installment payable on June 1, 1995 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 (1-1/2w) of such principal amount. Section 2.08. The currency of the United S)t.es 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, on behalf of SPA, carry out the Project with due diligence and efficiency and in conformity with sound administrative, financial and engineering practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) Without any limitation or restriction upon any of its other obligations under the Development Credit Agreement, the Borrower shall cause SPA 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, facilities, services and other resources, necessary or appropriate to enable SPA to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (c) The Borrower shall relend the proceeds of the Credit to SPA Under a subsidiary loan agreement to be entered into between the Borrower and SPA Under terms and conditions acceptable to the Association which shall include, inter alia, the provisions corresponding to those set forth in Sections 2.05, 2.06 and 2.07 of this Agreement. 6 (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, nor amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. Section 3.02. In order to assist the Borrower in the carrying out of the Project, the Borrower shall employ or cause to be employed, engineering consultants acceptable to the Association upon terms and conditions satisfactory to the Association. Section 3.03. In carrying out Parts A and B of the Project, the Borrower shall employ, or cause to be employed, contractors acceptable to the Association upon terms and conditions satisfactory to the Association. Section 3.04. (a) The Borrower shall issue promptly as needed import licenses, visas, work permits and other necessary documents and take any other action required to facilitate the import by the contractors and consultants of the goods required for the Project. (b) The Borrower undertakes to make adequate provision for the insurance of the imported goods to be financed out of the proceeds of the Credit 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. (c) Except as the Association may otherwise agree, the Borrower shall cause all goods financed out of the proceeds of the Credit to be used exclusively for the Project. Section 3.05. (a) The Borrower shall furnish or cause to be furnished to the Association promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) The Borrower () shall maintain or cause to be maintained records adequate to record the progress of the Project (including the cost thereof) and to identify the goods financed out of the proceeds of the Credit and to disclose the use thereof in the Project; (ii) shall enable the Association's representatives to inspect the Project, the goods financed out of such proceeds and any relevant records and documents; and (iii) shall furnish to the Association all such information 7 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. ARTICLE IV Other Covenants Section 4.01. The Borrower shall, as and when each of the facilities included in the Project is completed, deliver each such facility to SPA for operation by SPA, such delivery to be made free and clear of all encumbrances on the title thereto. Section 4.02. The Borrower shall take or cause to be taken all reasonable measures to ensure that the execution and operation of the Project are carried out with due regard to ecological and environmental factors. Section 4.03. Except as the Association shall otherwise agree, (a) the Borrower shall: (i) inform the Association of any intention to modify its Law No. 58 of 1972 relating to Finances of Public Enterprises and Agencies in such manner as to materially and adversely affect the ability of SPA to meet its obligations under the Project Agreement in sufficient time to afford the Association a reasonable opportunity to express its views thereon; (ii) promptly provide the Association with copies of all regulations or rules relating to the affairs of SPA issued by the Ministry of Finance, or any other authority having jurisdiction thereon; (iii) ensure that before SPA enters into any planned centralized capital investments as defined in Law No. 58 of the Borrower, the Association is informed of such proposed investment in sufficient time to enable the Association to express its views thereon; and (iv) inform the Association of any intention to modify its Law No. I of January 7, 1973 relating to the operations of SPA in sufficient time to afford the Association a reasonable opportunity to express its views thereon. 8 .Section 4.04. The Borrower undertakes to make necessary arrangements to allow SPA to retain, commencing in 1977, sufficient funds from SPA's annual surplus earnings to meet its debt service requirements. 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 pursuant to paragraph (h) thereof: (a) SPA shall have failed to perform any covenant, agreement or obligation under the Project Agreement or the Subsidiary Loan Agreement; (b) a default shall have occurred under the 1973 Credit Agreement on the part of the Borrower, or under any other agreement pursuant to the 1973 Credit Agreement on the part of the Borrower or SPA, other than in respect of the payment by the Borrower of principal, interest, service charges or any other payment required thereunder; (c) the Borrower shall have amended its Law No. 58 of 1.972 in such manner as to reduce SPA's financial obligation to the Borrower under said law; (d) Law No. I of January 7, 1973 of the Borrower shall have been amended, suspended, abrogated, repealed or waived in such a way as to materially and adversely affect the ability of SPA to carry out the covenants, agreements and obligations set forth in the Project Agreement; (e) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of SPA or for the suspension of its operations; and (f) an extraordinary situation shall have arisen which shall make it improbable that SPA will be able to perform its obligations under the Project Agreement or the Subsidiary Loan Agreement. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (d) thereof: (a) any event specified in paragraphs (a) or (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 SPA; and 9 (b) any event specified in paragraphs (c), (d) or (e) of Section 5.01 of this Agreement shall occur. 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 12.01(b) of the General Conditions: (a) the execution and delivery of the Project Agreement on behalf of SPA 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 SPA, respectively, have been duly authorized or ratified by all necessary corporate and governmental action; and (c) the consultants referred to in Section 2.02 of the Project Agreement have been appointed. 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: (a) That the Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, SPA and is legally binding upon SPA 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 SPA and is legally binding upon the Borrower and SPA in accordance with its terms. Section 6.03. The date January 15, 1976, is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.04. The obligations of the Borrower under Section 4.03 of this Agreement and the provisions of paragraph (b) of Section 5.02 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date thirty years after the date of this Agreement, whichever shall be the earlier. 10 ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Secretary of State for 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 11.01 of the General Conditions: For the Borrower: The Secretary of State for Finance Government of the Somali Democratic Republic Mogadiscio Somali Democratic Republic Cable address: SECMINFIN Mogadiscio For the Association: International Development Association 1818 1-1 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 theh representatives thereunto duly authorized, have caused this Agreement to be signed 11 in their respective names in the District of Columbia, United States of America, as of the day and year first above written. SOMALI DEMOCRATIC REPUBLIC By /s / Abdullahi Ahmed Addou Autliorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s / S. Shahid Husain Regional Vice President Eastern Africa 12 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) Civil works 3,550,000 80% (2) Consultant 250,000 100% services (3) Unallocated 1,400,000 TOTAL 5,200,000 2. 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 the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Credit decreases or increases, the Association may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Association. 3. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of expenditures prior to the date of this Agreement. 4. 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 13 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. 5. If tne 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. 0 14 SCHEDULE 2 Description of the Project The Project consists of expansion of facilities to handle cargo at the port of Mogadiscio. It includes the following parts: A. Construction of a 180 meters long and 12 meters deep general cargo berth in line with two 160 meters long and 10 meters deep general cargo berths being financed under the 1973 Credit Agreement. B. Construction of a 180 meters straight-line extension of the 770 meters breakwater being financed under the 1973 Credit Agreement. C. Utiliza*ion of consultant services for supervision of construction for Parts A and B above and detailed design for a slipway and berths for tugs and lighters. The Project is expected to be completed by December 31, 1976.