India - Second Maharashtra Irrigation Project : Credit 0954 - Credit Agreement - Conformed

OF?IT L CREDIT NUMBER 954 IN <DOC'UMESNTS Development Credit Agreement (Second Maharashtra Irrigation Project) between INDIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1980 CREDIT NUMBER 954 IN DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated , 1980, 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) by an agreement of even date herewith between the Association and the State of Maharashtra (hereinafter called Maharashtra), Maharashtra has agreed to undertake certain obliga- tions in respect of the carrying out of the Project; 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 Maharashtfa; 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 (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: (a) "Project Agreement" means the agreement between the Association and Maharashtra of even date herewith, as the same may be amended from time to time, and such term includes all schedules - 2 - to the Project Agreement and all agreements supplemental to the Project Agreement; and (b) "Project Area" means the combined areas of the Krishna, Kukadi, Upper Warda, Upper Penganga, Warna, Girna and Mula schemes in Maharashtra. 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 two hundred and ten million dollars ($210,000,000). 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 Asso- ciation, 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, procurement of the goods 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 2.02 of the Project Agreement. Section 2.04. The Closing Date shall be December 31, 1985 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 semiannually on April 1 and October 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each April 1 -3- and October 1 commencing April 1, 1990, and ending October 1, 2029, each installment to and including the installment payable on October 1, 1999, to be one-half of one per cent (1/2 of 1%) of such principal amount, and eabh installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.08. The currency of United Kingdom of Great Britain and Northern Ireland 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 Maharashtra 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 actioq, including the provision of funds, facilities, ser- vices and other resources, necessary or appropriate to enable Maharashtra 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 available the proceeds of the Credit to Maharashtra in accordance with the Borrower's standard arrangements for developmental assistance to the States of India. 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) Maharashtra shall have failed to perform any of its obligations under the Project Agreement; and (b) an extraordinary situation shall have arisen which shall make it improbable that Maharashtra will be able to perform 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 any event specified in paragraph (a) 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 Maharashtra. ARTICLE V Effective Date; Termination Section 5.01. The following event is specified as an addi- tional condition to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions, namely that the execution of the Project Agreement on behalf of Maharashtra has been duly authorized or ratified by all necessary governmental action. Section 5.02. The following is specified as an additional matter, within the meaning of Section 12.02 (b) of thle 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 Maharashtra, and is legally binding upon Maharashtra in accordance with its terms. Section 5.03. The date 16 /9ID is hereby specified for the purposes of SecVion 12.04 of the General Conditions. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. Any Secretary, Additional Secretary, Joint Secretary, 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 purpose of Section 11.01 of the General Conditions: -5- For the Borrower: The Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi India Cable address: ECOFAIRS New Dehli 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. INDIA By , Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION BybC L t Regional Vice President South Asia - 6 - 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 170,000,000 70% of expendi- tures incurred to March 31, 1983; 50% of expenditures incurred after March 31, 1983 (2) Equipment and 24,000,000 100% of foreign Vehicles expenditures; 100% of local expenditures ex-factory; and 70% of other local expenditures (3) Technical 6,000,000 100% assistance (4) Unallocated 10,000,000 TOTAL 210,000,000 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 - 7 - (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 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 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, no with- drawals shall be made in respect of payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of $25,000,000 may be made on account of payments made for such expenditures before that date but after October 16, 1979. 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 expendi- tures, and (ii) if suzh 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 res- tricting 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. - 9 - SCHEDULE 2 Description of Project The Project is the continuation of irrigation development in the areas of the Krishna, Kukadi, Upper Wardha, Upper Penganga, Warna, Girna, and Mula schemes over a period of five years. The Project consists of the following Parts: Part A: Work on 11 dams; construction of about 900 kilometers of main and branch canals; construction of distribution systems and drains; and construction or modernization of about 620 kilometers of link roads. Part B: Modernization of existing main and branch canals, distribution systems and drains in the areas of the Girna and Mula schemes. Part C: Strengthening of the command area development authori- ties, including agricultural extension and applied research, modern management services and operation and maintenance in the Project Area. Part D: Provision of vehicles and equipment for Project works and for operation and maintenance. Part E: Expansion of Maharashtra's Pilot Water Management Program. Part F: Establishment of a program for Project monitoring and evaluation. Part G: Establishment of a training program for land development and water management specialists. The Project is expected to be completed by October 31, 1984.