Somali - Third Highway Project : Credit 0699 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 699 SO DEVELOPMENT CREDIT AGREEMENT (Third Highway Project) between SOMALI DEMOCRATIC REPUBLIC and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated June 1, 1977 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated June 1, 1977, between SOMALI DEMOCRATIC REPUBLIC (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 Parts A and B of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) the Borrower intends to contract from the Arab Fund for Economic and Social Development (hereinafter called the Arab Fund) a loan (hereinafter called the Arab Fund Loan) in an amount equivalent to $8,000,000 to assist in the financing of Parts A and C of the Project on the terms and conditions set forth in an agreement (hereinafter called the Arab Fund Loan Agreement) to be entered into between the Borrower and the Arab Fund; (C) the Borrower intends to contract from the African Development Fund (hereinafter called ADF) a loan (hereinafter called the ADF Loan) in an amount equivalent to $5,500,000 to assist in the financing of Part A of the Project on the terms and conditions set forth in an agreement (hereinafter called the ADF Loan Agreement) to be entered into between the Borrower and ADF; -2- (D) the Borrower intends to contract from the Islamic Development Bank (hereinafter called IDB) a loan (hereinafter called the IDB Loan) in an amount equivalent to $7,500,000 to assist in the financing of Part A of the Project on the terms and conditions set forth in an agreement (hereinafter called the IDB Loan Agreement) to be entered into between the Borrower and the Islamic Development Bank; 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; NOW THEREFORE the parties hereto hereby agree as follows: -3- 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 and in the Preamble to this Agreement have the respective meanings therein set forth and the following terms have the following meanings: (a) "CED" means the Civil Engineering Department, within the Borrower's Ministry of Public Lorks, which is responsible for constructing and maintaining roads and any successor to such functions; (b) "Other Loans" means the loans referred to in paragraphs (B), (C) and (D) of the Preamble to this Agreement; and (c) "Project" and references to "Parts" thereof mean the project and parts thereof described in Schedule 2 to this Agreement. -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 equivalent to seven million dollars ($7,000,000). 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 Association, 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. 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 procured in accordance with the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be December 30, 1980, 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 time to time. Section 2.06. Service charges shall be payable semi- annually on June 1 and December 1 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 June 1, 1987, and ending December 1, 2026, each installment to and including the installment payable on December 1, 1996, 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. -6- ARTICLE III Execution of the Project Section 3,01. The Borrower shall carry out the Project through CED with due diligence and efficiency and in conformity with appropriate administrative, financial and engineering practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. In order to assist the Borrower in: (a) supervising construction of the roads described in Part A of the Project; (b) carrying out the feasibility study described in Part B (1) of the Project; (c) preparing detailed engineering commissioned under Part B (2) of the Project; and (d) increasing the planning, operatlonal and maintenance capacity of CED; the Borrower shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Section. 3.03. (a) The Borrower undertakes to insure, or 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 - 7 - 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. (b) Except as the Association shall otherwise agree, all goods and services financed out of the proceeds of the Credit shall be used exclusively for Parts A and B of the Project until completion thereof. Section 3.04. (a) The Borrower shall furnish to the Association, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for Parts A and B of the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) The Borrower: (i) shall maintain records adequate to record the progress of Parts A and B of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Credit, and to disclose the use thereof in the Project; (ii) shall enable the Association's accredited representatives to visit the facilities and construction sites included in Parts A and B of the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish to the Association -8- all such information 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. Section 3.05. The Borrower shall take or cause to be taken all such action as shall be necessary to acquire, as and when needed, all such land and rights in respect of land as shall be required for carrying out Parts A and B of the Project and shall furnish to the Association, if the Association so requests, promptly after such acquisition, evidence satisfactory to the Association that such land and rights in respect of land are available for purposes related to Parts A and B of the Project. Section 3.06. The Borrower shall not later than December 30, 1977, or such other date as shall be agreed between the Borrower and the Association, appoint duly qualified and competent persons, within CED, to the positions of: (i) Head of the Maintenance Division; (ii) Head of the Planning and Design Division; and (iii) Head of the Materials Laboratory Division. -9- ARTICLE IV Other Covenants Section 4.01. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations, resources and expenditures, in respect of Parts A and B of the Project, of the CED. Section 4.02. (a) The Borrower shall establish and maintain facilities adequate to collect and record, in accordance with appropriate statistical methods and procedures, such information concerning road traffic, road construction and maintenance costs as shall be reasonably required for proper planning of maintenance, improvements and extensions of its highway system. (b) The Borrower shall take all measures reasonably necessary to ensure at all times that the dimensions and axle loads of the vehicles using its highways do not exceed limits consistent with the design standards of such highways. Section 4.03. The Borrower shall cause its highway system to be adequately maintained in accordance with sound engineering practices, and shall provide promptly as needed, the funds, equipment, facilities, staff, services and other resources required for the purpose, and in particular, shall ensure that adequate amounts for road maintenance are included in its budget - 10 - each year. Except as the Association may otherwise agree, CED highway maintenance staff and equipment shall be used exclusively for highway maintenance.