Liberia - Forestry Project : Credit 0839 - Development Credit Agreement - Conformed

 CONFORMED COPY CREDIT NUMBER 839 LBR Development Credit Agreement (Forestry Project) between REPUBLIC OF LIBERIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated July 28, 1978  CREDIT NUMBER 839 LBR DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated July 28, 1978, between REPUBLIC OF LIBERIA (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 the Forest Develop- ment Authority (hereinafter 'referred to as FDA) with the Bor- rower' s assis;ance and, as part of such assistance, the Borrower will make ava:lable to FDA the proceeds of the Credit as herein- after providec,; (C) the Borrower, to assist in financing part of the Project, intends to receive from the Deutsche Gesellschaft für Technische Zusammenarbeit GmbH (hereinafter referred to as GTZ) a grant (hereinafter called the GTZ grant) in an amount of one million eight hundred thousand dollars equivalent ($1,800,000) to be made available on the terms and conditions set forth in an agreement (hereinafter called the GTZ Agreement) to be entered into between the Borrower and GTZ, and from the African Devel- opment Bank (hereinafter referred to as ADB) a loan (hereinafter called the ADB loan) in an amount of five million dollars equiva- lent ($5,000,000) to be made available on the terms and conditions set forth in an agreement (hereinafter called the ADB Agreement) to be entered into between the Borrower and ADB; and WHEREAS the Association has agreed, on the basis inter alia of the foregoing, to Pxtend the Credit to the Borrower upon the terms and conditions he einafter set forth and in the Project Agreement of even date herewith between the Association and FDA; 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  -2- 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 additional terms have the following meanings: the (a) "Project Agreement" means the agreement between Association and FDA 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. (b) "FDA Law" means the Act of 1976 establishing FDA, organizing and providing resources to FDA, as may be amended from time to time. (c) "Advance" means the amount of funds provided by the Association to the Borrower for the preparation of the Project under an agreement constituted by an exchange of letters between the Borrower and the Association dated December 15, 1976 and February 4, 1977. 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 six million dollars ($6,000,000). Section 2.02. (a) 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 Associ- ation, 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.  -3- (b) On the Effective Date of this Agreement the Association shall, on behalf of the Borrower, withdraw from the Credit Account and pay to itself out of the proceeds of the Credit, an amount equivalent to: (i) the principal amount of funds withdrawn by the Borrower out of the Advance and outstanding on such date; and (ii) service charge accrued thereon up to such date. Section 2.03. Except as the Association shall otherwise agree, procurement of the materials and civil works to be financed out of the proceeds of the Credit, shall be governed by 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, 1984 or such later date as the Association shall establish. The Associ- ation 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 semiannually on February 15 and August 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each Febru- ary 15 and August 15 commencing August 15, 1988, and ending February 15, 2028, each installment to and including the install- ment payable on February 15, 1998, 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 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 FDA to perform in accordance  -4- 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 FDA to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) Notwithstanding the provisions of paragraph (a) hereof, the Borrower shall: (i) make sufficient budgetary allocations and financial transfers on behalf of FDA in order to assure FDA's fulfillment of the obligations set forth in Section 3.03 of the Project Agreement; and (ii) at least one month prior to the commencement of each quarter, deposit, to the account of FDA, advances based on the quarterly cash flow statement to be prepared by FDA in accordance with Section 4.03 (b) of the Project Agreement. (c) The Borrower shall iake the proceeds of the Credit available to FDA on terms and conditions acceptable to the Association for the purpose of carrying out the Project. 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 pursuant to paragraph (h) thereof: (a) FDA shall have failed to perform any covenant, agreement or obligation of FDA under the Project Agreement; (b) an extraordinary situation shall have arisen which shall make it improbable that FDA will be able to perform its obli- gations under the Project Agreement; (c) the FDA Law shall have been amended, suspended, abro- gated, repealed or waived in such a way as to materially and adversely affect the ability of FDA to carry out the covenants, agreements and obligations set forth in the Project Agreement; (d) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of FDA or for the suspension of its operations; and  -5- (e) (i) Subject to subparagraph (ii) of this paragraph: (A) the right of the Borrower to withdraw the proceeds of the GTZ grant or of the ADB loan shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the GTZ Agreement or of the ADB Agreement, or (B) the ADB loan shall have become due and payable prior to the agreed maturity thereof. (ii) Subparagraph (i) of this paragraph shall not apply if: (A) such suspension, cancellation, termination or prematuring is not caused by the failure of the Borrower to perform any of its obligations under such agreement, and (B) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consis- tent with the obligations of the Borrower under this Agreement. Section 4.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (d) thereof: (a) the events specified in paragraphs (a) and (b) of 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 FDA; and (b) the events specified in paragraphs (c), (d) and (e) (i) (A) and (B) of Section 4.01 of this Agreement shall occur. ARTICLE V Effective Date; Termination Section 5.01. 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) that the GTZ Agreement has been executed and delivered on behalf of the parties thereto; and  -6- (b) that the ADB Agreement has been executed and delivered on behalf of the parties thereto. Section 5.02. The following is specified as an additional 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 Agreement has been duly authorized or ratified by FDA, and is legally binding upon FDA in accordance with its terms. Section 5.03. The date October 26, 1978, is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Minister 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: Minister of Finance Ministry of Finance Monrovia Liberia Cable address: Telex: MINFIN 4221 Monrovia Monrovia For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America  -7- 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 LIBERIA By /s/ Francis Dennis Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Is! R. Chaufournier Regional Vice President Western Africa  -8- SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table balow 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 for 4,100,000 90% Parts A and B of the Project (2) Technical assis- 1,300,000 100% of for- tance, studies and eign expen- training ditures (3) Unallocated 600,000 TOTAL 6,000,000 2. For the purposes of this Schedule, the term "foreign expen- ditures" 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; provided, however, that if the currency of the Borrower is also that of another country from the territory of which goods or services are supplied, expenditures in such currency for such goods or ser- vices shall be deemed to be foreign expenditures. 3. The disbursement percentages have been calculated in com- pliance 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  -9- 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. 4. Notwithstanding the provisions of paragraph 1 above, and subject to the provisions of Section 2.02 (b) of this Agreement, no withdrawals shall be made in respect of payments made for expenditures prior to the date of this Agreement, provided, however, that an amount not exceeding $250,000 equivalent may be withdrawn for expenditures under Category (1) incurred after January 1, 1978. 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 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 expen- ditures 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 pro- ceeds 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.  - 10 - SCHEDULE 2 Description of the Project The Project is the first phase of the Borrower's forestry development program and consists of the following Parts: Part A: Institutional Support for FDA Improving and strengthening the capacity of FDA to control forestry sector operations and to plan and direct future forestry development, through the construction of additional facilities of FDA (including administrative and regional headquarters, housing and workshops), the provision of vehicles and equipment, provision of technical assistance, and an increase in the staff of FDA. Part B: Industrial Trial Plantation Establishment of a trial industrial plantation of about 1,600 hectares in the national forest reserve in Grand Cape Mount County. Part C: Training (1) Provision of about 212 man-months of fellowships for overseas training of forestry specialists, substantially as set forth in Appendix 1 to this Schedule. (2) In-service training of FDA staff in methods of estab- lishing large-scale industrial plantations, forest management, and project monitoring and evaluation. Part D: Consultants' Services, Studies and Surveys Consultants' services, studies and surveys related to for- estry development and wood processing and production, substan- tially as set forth in Appendix 1 to this Schedule. The Project is expected to be completed by June 30, 1983.  - 11 - APPENDIX 1 TO SCHEDULE 2 Trainii_ Under Part C of the Project Part C of the Project includes: (1) about 30 man-months for training forestry graduates and engineers in industrial plantation techniques, silviculture, nursery, mechanical land clearing and heavy equipment maintenance; (2) about 92 man-months for forest officers to be trained in forest management, forest engineering, forest economics, planning; and mechanical wood processing; (3) about 30 man-months for training in hardwood timber marketing, analysis and promotional techniques; (4) about 24 man-months for training in land use planning and aerial photo interpretation; (5) about 24 man-months for post-graduate training in national parks and wildlife plantations; and (6) about 12 man-months for training of a forestry librar- ian. Consultants' Services, Studies and Surveys under Part D of the Project Part D of the Project includes: (1) provision of about 25 man-months of consultants' services to establish an effective market intelligence system (about 12 man-months), to improve FDA accounting and financial operations (about 6 man-months), and to assist in the evaluation of plantation trial results (about 7 man-months); (2) provision of about 55 man-months of consultants' services for studies in the following areas: (a) charcoal production;  - 12 - (b) pre-industrial study for a pulpmill and a study of industrial plantation development; (c) study of forest policy proposals, including fiscal, management, exploitation and reforestation policy; (d) social, economic and environmental study of the industrial plantation; (e) studies of sustained yields in natural forests; (f) studies of port handling facilities; and (g) aerial photography interpretation. (3) A survey of land resources in the territory of the Borrower, using landsat imagery and aerial infrared photo production.