India - Assam Agricultural Development Project : Credit 0728 - Credit Agreement - Conformed

CREDIT NUMBER IN Development Credit Agreement (Assam Agricultural Development Project) between INDIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated .xV V\ 3 C 1977 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated 7"- 30 , 1977, between INDIA, acting by its President (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 Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) the Project will be carried out by Assam with the Borrower's assistance and, as part of such assistance, the Borrower will make available to Assam the proceeds of the Credit as hereinafter provided; and WHEREAS the Association has agreed, on the basis inter alia of the foregoing, to extend the Credit to the Borrower upon the terms and conditions hereinafter set forth and in the Project Agreement of even date herewith between the Association and Assam; NOW THEREFORE the parties hereto hereby agree as follows: -2- 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) "Assam" means the State of Assam, a State of India, and includes any successor thereof; (b) "Project Agreement" means the agreement between the Association and Assam of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supplemental to the Project Agreement; and (c) "AAU" means Assam Agricultural University, a university created by the Assam Agricultural University Act, 1968, of Assam, and includes any successor thereof. -4- 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 equiva- lent to eight million dollars ($8,000,000). 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 by agreement between the Borrower and the Associa- tion, for expc ditures 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. Section 2.03. Except as the Association shall otherwise agree, contracts for the purchase of goods or for civil works to be financed out of the proceeds of the Credit, shall be pro- cured 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 March 31, 1983 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. -5- 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 tine to time. Section 2.06. Service charges shall be payable semi-annually on January 15 and July 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each January 15 and July 15 commencing January 15, 1988, and ending July 15, 2027, each installment to and including the installment payable on July 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 Kingdom of Great Britain and Northern Ireland is hereby specified for the purposes of Section 4.02 of the General Conditions. 01 -6- ARTICLE III Execution of the Project Section 3.01. (a) Without any limitation or restriction upon any of its other obligations under the Development Credit Agreement, the Borrower shall cause Assam to perform in accordance with the provisions of the Project 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 Assam to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall make the proceeds of the Credit available to Assam in accordance with the Borrower's standard arrangements for development assistance to the States of India. -7- I ARTICLE IV Remedies of the Association Section 4.01. For the purposes of Section 6.02 of the General Conditions the following additional event is specified pursuant to paragraph (h) thereof; namely, that Assam shall have failed to perform any of its obligations under the Project Agreement. Section 4.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified pursuant to paragraph (d) thereof; namely, that the event specified in Section 4.01 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 Assam. -8- ARTICLE V Effective Date; Termination Section 5.01. The following event is specified as an addi- tional condition to the effectiveness of this Agreement within the meaning of Section 12.01 (b) of the General Conditions, navaly, that the execution of the Project Agreement on behalf of Assam has been duly authorized or ratified by all necessary governmental action. Section 5.02. The following event is specified as an addi- tional matter, 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 the Project Agree- ment has been duly authorized or ratified by Assam, and is legally binding upon Assam in accordance with its terms. Section 5.03. The date '4)- So ) 1 is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Representatives of the Borrower; Addresses Section 6.01. Any Secretary, Additional Secretary, Joint Secretary, Officer on Special Duty, Director or Deputy Secretary of the Department of Economic Affairs in the 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 11.01 of the General Conditions: For the Borrower: The Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi, India Cable address: ECOFAIRS New Delhi For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 2.0433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) 10- 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. INDIA By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By N Regional Vice President South Asia 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 3,700,000 80% (2) Overseas and 600,000 100% of foreign local training expenditures or and consultants' 80% of local ex- services penditures (3) Equipment and 1,600,000 80% vehicles (4) Salaries of in- 1,500,000 45% cremental staff (5) Unallocated 600,000 TOTAL 8,000,000 - 12 - 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower and for goods or services supplied from the territory of the Borrower. 3. The disbursement percentages have been calculated in compli- ance with the policy of the Association that no proceeds of the Credit ahall 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 Credit 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. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expendi- tures prior to the date of this Agreement. - 13'- 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in para- graph 1 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 expendi- tures 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 re- stricting or limiting any other right, power or remedy of the -14- Association under this Agreement, by notice to the Borrower, cancel such amount of the Credit as, in the Association's rea- sonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 15 - SCHEDULE 2 Description of the Project The Project is designed to reorganize and strengthen the agricultural extension service, develop and strengthen adaptive research facilities and strengthen the Irrigation Department of Assam in order to develop groundwater resources in Assam over a period of five years and consists of the following: Part A: Completion of the reorganization by June 30, 1980, of the agricultural extension service started in 1976 and strengthening such service by Assam through the provision of additional staff, housing, offices, equipment, transportation and staff training. Part B: Establishment of about nine field trial stations by the Department of Agriculture of Assam through farm development, provision of staff and staff training, laboratory facilities, housing, hostel accommodation, equipment and vehicles. Part C: Strengthening the Irrigation Department through the provision of staff and staff training, vehicles and equipment to enable the Department to, inter alia, supervise Assam's shallow tubewell installation program and undertake groundwater surveys and monitoring, research, design, installation and field testing of - 16 - alternative types of shallow tubewells and pumping techniques. Part D: Monitoring the progress of the Project and evaluating its impact by Assam through the provision of staff, equipment and funds. Part E: (i) Development and upgrading of two commodity-oriented research stations and one sub-station of AAU through farm development, provision of staff and staff training, laboratory facilities, housing, hostel accommodation, equipment and vehicles; and (ii) provision of about 12 man-months of consultancy services to solve agricultural problemso The Project is expected to be completed by June 30, 1982. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the i day of 197_L. * FOR SECRETARY