Burundi - Ende Project : Credit 0731 - Development Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 73] BU Development Credit Agreement (BNDE Project) between REPUBLIC OF BURUNDI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated September 30, 1977 CREDIT NUMBER 731 BU DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated September 30, 1977, between the REPUBLIC OF BURUNDI (hereinafter called the Borrower) and the 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 Section 3.01 of this Agreement by extending the Credit as hereinafter provided; (B) The Project will be carried out by the Banque Nationale de D6veloppement Economigue (hereinafter called BNDE), a company established and operating under the laws of the Borrower,-with the Borrower's assistance and, as part of such assistance, the Bor- rower will make available to BNDE 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 the Project Agreement of even date herewith between the Association and BNDE; 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, subject, however, to the modifications thereof set forth in the Schedule to this Agreement (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, 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) "Project Agreement" means the agreement between the Association and BNDE of even date herewith, as the same may be U -2- amended from time to time, and such term includes all agreements supplemental to the Project Agreement; (b) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and BNDE pursuant to Section 3.02 (a) of this Agreement, as the same may be amended from time to time; (c) "Sub-loan" means a loan or credit made or proposed to be made by BNDE in whole or in part out of the proceeds of the Credit relent to BNDE under the Subsidiary Loan Agreement to an Investment Enterprise for an Investment Project, and "free-limit Sub-loan" means a Sub-loan, as so defined, which qualifies as a free-limit Sub-loan pursuant to the provisions of Section 2.03 (d) of this Agreement; (d) "Investment" means an investment other than a Sub-loan made or proposed to be made by BNDE in whole or in part out of the proceeds of the Credit relent to BNDE under the Subsidiary Loan Agreement in an Investment Enterprise for an Investment Project; (e) "Investment Enterprise" means an enterprise to which BNDE proposes to make or has made a Sub-loan or in which it proposes to make or hds made an Investment; (f) "Investment Project" means a specific development project to be carried out by an Investment Enterprise utilizing the proceeds of a Sub-loan or Investment; (g) "Burundi Franc" means the currency of the Borrower; and "foreign currency" means any other currency; (h) "Statutes" means the Acte Constitutif of BNDE published in the Official Bulletin of Burundi No. 4/67 of April 1, 1976 as modified to date; (i) "Statement of Policy" means the statement to be approved by the Board of Directors of BNDE pursuant to Section 2.10 (a) of the Project Agreement, as the same may be amended from time to time; and (j) "Subsidiary" means any company of which a majority of the voting stock is owned or effectively controlled by BNDE or by any one or more subsidiaries of BNDE or by BNDE and one or more of its subsidiaries. -3- ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in this Developzent Credit Agreement set forth or referred to, an amount in various currencies equiv- alent to three million four hundred thousand dollars ($3,400,000). Section 2.02. The Borrower designates BNDE as its representa- tive for the purpose of taking any action required or permitted to be taken under the provisicas of Section 2.03 of this Agreement and Article V of the General Conditions. Section 2.03. (a) The proceeds of the Credit made available to BNDE pursuant to Section 3.02 (a) and (c) hereof may be with- drawn from the Credit Account by BNDE, acting on behalf of the Borrower, as follows: (i) subject to the provisions of paragraphs (b) through (e) of this Section, for amounts expended (or, if the Association shall so agree, such amounts as shall be required to meet expenditures to be made) for an Investment Project to finance the reasonable cost of goods and services required under a Sub-loan or Investment for the Investment Project in respect of which the withdrawal is requested; provided, however, that, except as the Association shall otherwise agree, no withdrawal shall be made hereunder until BNDE shall have: First: adopted detailed procedures satisfactory to the Association for appraisal and supervi- sion of projects financed by BNDE, and Second: adopted a form of loan agreement satisfac- tor to the Association pursuant to which Sub-loans will be made; and (ii) for amounts expended (or, if the Association shall so agree, such amounts, not exceeding the equiv- alent of $400,000, as shall be required to meet expenditures to be made) for the reasonable cost net of taxes of the services of the experts employed pu.suant to Section 2.11 (b) of the Project Agreement. -4- (b) Withdrawals from the Credit Account pursuant to para- graph (a) (i) of this Section shall be authorized in respect of: (i) expenditures in a foreign currency for goods or services supplied from outside the territory of the Borrower; (ii) the equivalent of eighty per cent (80%) of expendi- tures in Burundi Francs for goods supplied from the territory of the Borrower but previously imported into the territory of the Borrower through normal trade channels; and (iii) the equivalent of sixty-five per cent (65%) of expenditures in Burundi Francs on account of civil works; (c) No withdrawal shall be made pursuant to paragraph (a) (i) of this Section, unless the Sub-loan or Investment in respect of which the withdrawal is requested: (i) shall have been approved by the Association; or (ii) shall be a free-limit Sub-loan for which the Association shall have authorized withdrawals from the Credit Account. (d) A free-limit Sub-loan shall be a Sub-loan for an Invest- ment Project in an amount to be financed out of the proceeds of the Credit which shall not exceed the sum of: (i) $100,000 equiv- alent, when added to any other outstanding amounts financed or proposed to be financed out of the proceeds of the Credit for such Investment Project; or (ii) $1,000,000 equivalent, when added to all other free-limit Sub-loans financed or proposed to be financed out of the proceeds of the Credit. (e) Except as the Association and the Borrower shall other- wise agree, no withdrawals shall be made pursuant to paragraph (a) (i) of this Section on account of (i) expenditures made before the date of this Agreement or (ii) expenditures made by an Investment Enterprise in respect of a Sub-loan subject to the Association's approval, or in respect of an Investment, more than ninety days prior to the date on which the Association shall have received the application and information required by Section 2.02 (b) of the Project Agreement or (iii) expenditures made by an Investment Enterprise in respect of a free-limit Sub-loan more than ninety days prior to the date on which the Association shall have received the request and information required by Section 2.02 (c) of the Project Agreement. --5- Section 2.04. The Closing Date shall be December 31, 1981 or such later date as the Association shall determine. 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 April 15 and October 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each April 15 and October 15 commencing October 15, 1987 and ending April 15, 2027, each installment to and including the installment payable on April 15, 1997 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 Description and Execution of the Project; Use of the Proceeds of the Credit Section 3.01. The purpose of the Project is to assist BNDE in financing such productive facilities and resources in Eurundi as will contribute to the economic and social development of the country through loans to and investments in productive enterprises in Burundi for specific development projects. Section 3.02. (a) The Borrower shall relend to BNDE the equivalent in Burundi Francs of three million dollars ($3,000,000) out of the proceeds of the Credit under a Subsidiary Loan Agree- ment to be entered into between the Borrower and BNDE, at an interest rate of five per cent (5%) per annum on the outstanding balance, and under such other terms and conditions as shall be satisfactory to the Borrower, the Association and BNDE, which shall include the payment of a commission to the Borrower, at the rate of one per cent (1%) per annum on account of the foreign exchange risks to be borne by the Borrower on the portion of such proceeds utilized by BNDE for Investments and for Sub-loans. - 6 - (b) 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. (c) The Borrower shall transfer to the BNDE, as a grant, such amounts as shall be withdrawn from the Credit Account under Section 2.03 (a) (ii) hereof. Section 3.03. The Borrower shall make available or cause to be made available to BNDE medium- and long-term loans in such amounts and at such times as shall be required by BNDE to finance the portions of the Sub-loans and Investments not financed by the Association. ARTICLE IV Additional Covenants Section 4.01. The Borrower shall not take, or permit any of its political subdivisions, or any of its agencies or instrumen- talities, or any agency or instrumentality of any of its political subdivisions, to take any action which would prevent or materially interfere with the performance by BNDE of any of its obligations under the Project Agreement or the Subsidiary Loan Agreement, and shall take or cause to be taken all reasonable action which shall be required on its part in order to enable BNDE to perform such obligations. Section 4.02. The Borrower shall take or cause to be taken all action necessary or appropriate to enable BNDE to increase its share capital as set forth in Section 3.06 of the Project Agreement. 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) a default shall occur in the performance of any obliga- tion of BNDE under the Project Agreement; -7- (b) any part of the principal amount of any loan to BNDE having an original maturity of one year or more shall, in accor- dance with its terms, have become due and payable in advance of maturity as provided in the loan contract or agreement or any security for any such loan shall have become enforceable; (c) a subsidiary or any other entity shall have been created or acquired or taken over by BNDE, if such creation, acquisition or taking over would materially and adversely affect the conduct of BNDE's business, its financial situation, the efficiency of its management and personnel or the carrying out of the Project; (d) BNDE shall have become unable to pay its debts as they mature or any action or proceeding shall have been taken by BNDE or by others whereby any of the assets of BNDE shall or may be distributed among its creditors; and (e) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of BNDE or for the suspension of its operations. 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 (c) 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 BNDE; and (b) any event specified in paragraphs (b), (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 addi- tional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the Subsidiary Loan Agreement has been executed on behalf of the Borrower and BNDE, respectively; -8- (b) BNDE has adopted the Statement of Policy; (c) BNDE has established the unit referred to in Section 2.11 (a) of the Project Agreement; and (d) BNDE has recruited the two experts referred to in, and in accordance with, Section 2.11 (b) of the Project Agreement. 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 on behalf of, BNDE, and is legally binding upon BNDE in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly author- ized or ratified by, and executed on behalf of, the Borrower and BNDE, respectively, and is legally binding upon the Borrower and BNDE in accordance with its terms. Section 6.03. The date December 29, 1977 is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.04. The provisions of Article V of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date 18 years after the date of this Agreement, whichever shall be the earlier. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. Except as provided in Section 2.02 of this Agreement, the Minister of the Borrower at the time responsible for finance 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: -9- For the Borrower: Ministere de l'Economie et des Finances Bolte Postale 1830 Bujumbura R6publique du Burundi Cable address: Telex: MINICOFIN MINAFFEXT 65 Bujumbura For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement 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 BURUNDI By /s/ D. Shiramanga Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ W. Wapenhans Regional Vice President Eastern Africa - 10 - SCHEDULE Modifications of General Conditions For the purpose of the Development Credit Agreement, the provisions of the General Conditions are modified as follows: (1) The words "Investment Projects" are substituted for the words "the Project" at the end of Section 5.03. (2) Section 6.03 is deleted and replaced by the following new Section: "Section 6.03. Cancellation by the Association. If (a) the right of the Borrower to make withdrawals from the Credit Account shall have been suspended with respect to any amount of the Credit for a continuous period of thirty days, or (b) by the date specified in Section 2.02 (e) of the Project Agreement no applications or requests permitted under para- graph (b) or paragraph (c) of such Section shall have been received by the Association in respect of any portion of the Credit, or having been so received, shall have been denied, or (c) after the Closing Date an amount of the Credit shall remain unwithdrawn from the Credit Account, the Association may by notice to the Borrower terminate the right of BNDE to submit such applications or requests or to make withdrawals from the Credit Account on behalf of the Borrower, as the case may be, with respect to such amount or portion of the Credit. Upon the giving of such notice such amount or portion of the Credit shall be cancelled."