Haiti - Third Power Project : Credit 1281 - Credit Agreement - Conformed

0"FICIAL DOCUMENTS CREDIT KUMBER 1281 HA Development Credit Agreement (Third Power Project) between REPUBLIC OF HAITI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1982 CREDIT NUMBER 1281 HA DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated , 1982, between the REPUBLIC OF HAITI (hereiKafter 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 foreign exchange cost of the Proiect described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; and (B) the Project will be carried out by Electricit& d'Haiti with the Borrower's assistance and, as part of such assistance, the Borrower will make available to Electricitf d'Haiti 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 Electricitfi d'Haiti; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definiions 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 June 30, 1980, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agree- ments 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 Gen- eral Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "EdH" means Electricit6 d'Haiti, an autonomous agency of the Borrower established by, and operating under the Bor- rower's Loi-Cadre dated July 29, 1971, as amended by the Decree dated April 8, 1977 published in the Moniteur on June 16, 1977; -2- (b) "Project Agreement" means the agreement between the Association and EdH 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) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and EdH pursuant to Section 3.01 (b) of this Agreement, as the same may bez. amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreement. 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 twenty-three million one hundred thousand Special Drawing Rights (SDR 23,100,000). 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, 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 2.03 of the Project Agreement. Section 2.04. The Closing Date shall be June 30, 1986 or such later date as the Association shall establish. The Associa- tion shall promptly notify the Borrower of such later date. Section 2.05. (a) The Borrower shall pay to the Association a commitment charge at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of the Credit not with- drawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Development Credit Agreement - 3 - to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or shall be cancelled. (b) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without restric- tions of any kind imposed by, or in the territory of, the Bor- rower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.06. 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 front time to time. Section 2.07. Commitment charges and service charges shall be payable semiannually on January 1 and July 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each January 1 and July 1 commencing January 1, 1993, and ending July 1, 2032, each installment to and including the installment payable on July 1, 2002, 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 2.09. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.10. EdH is designated as representative of the Borrower for the purposes of taking any action required or per- mitted to be taken under the provisions of Section 2.02 of this Agreement and Article V 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 EdH to carry out the Project and to perform in accordance with the provisions of the Project -4- Agreement and the Subsidiary Loan Agreement all the other obliga- tions of EdH 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 EdH 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 relend the proceeds of the Credit to EdH pursuant to a subsidiary loan agreement to be entered into between the Borrower and EdH containing terms and conditions which shall have been approved by the Association, including the following: (i) the principal amount of the sibsidiary loan repay- able by EdH to the Borrower shall be the equivalent (determined as of the date, or respective dates, of repayment) of the value of tle currency or curren- cies withdrawn from the Credit Account expressed in terms of SDR's at the time of witiv:awal from the Credit Account; (ii) the subsidiary loan will be repaid by EdH to the Borrower in thirty-two semiannual installments over twenty years (including four years of grace); and (iii) interest shall be charged at a rate of at least 11.6% per annum on the outstanding balance of the subsidiary loan but shall be capitalized during the four year grace period. (c) The Borrower shall exercise its rights under the Subsidiary Loan Agreement in such anner as to protect the interests of the Borrower and of 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. Section 3.02. The Borrower shall make available to EdH as a grant such funds as shall be required to pay promptly as needed one-half of the foreign-exchange costs of the construction included in Part F of the Project. -5- ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall not, without the Association's prior approval undertake, or permit EdH to under- take, prior to the completion of the Project, any investment in the power sector exceeding the equivalent of one per cent (1%) of the net value of EdH's fixed assets in operation nor permit the aggregate amount of unbudgeted village and rural electrification costs in any year to exceed 0.2% of sucn net value. (b) For the purpose of Sub-section (a) above, the term "net value of fixed assets in operation" means the gross value of fixed assets in operation less the related accu:mulated depreciation, all as revalued in accordance with Section 4.04 of the Project Agreement. Section 4.02. Except as the Association shall otherwise agree, the Borrower shall, from time to time, take all steps necessary or desirable (including but not limited to adjustments of EdH's tariffs) to enable EdH to earn the annual rate of return specified in Section 4.03 of the Project Agreement. Section 4.03. The Borrower shall take all measures necessary on its part to ensure that electricity bills owed EdH by the Borrower's departments and agencies be paid on time. Section 4.04. The Borrower shall not permit EdH to use its resources for any purpose other than to pay the costs of its operations and investments and to service its debts. Section 4,05. The Borrower shall take such steps as shall be necessary to authorize EdH to maintain its liquid funds in interest-bearing accounts or in interest-bearing investments not exceeding six months to maturity. 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: -6- (a) EdH shall have failed to perform any covenant, agreement or obligation of EdH under the Project Agreement; (b) an extraordinary situation shall have arisen which shall make it improbable that EdH will be able to perform its obli- gations under the Project Agreement; (c) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution of EdH or for the suspension of its operations; and (d) the Decree dated April 9, 1977 referred to in Section 1.02 (a) of this Agreement shall have been amended, suspended, abrogated, repealed or waived in such a way as to materially and adversely affect the ability of EdH to carry out the covenants, agreements and obligations set forth in the Project Agreemenc. 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) the event specified in paragraph (a) of Section 5.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower and EdH; and (b) any.event specified in paragraphs (c) or (d) 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 Sutsidiary Loan Agreement has been executed on behalf of the Borrower and EdH; and (b) the contract for the supply of the two generating units included in Part A of the Project has been signed. - 7 - Section 6.02. The following are specified as additional matters, within the meaning of Section 12.01 (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 EdH, and is legally binding upon EdH in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly authorized or ratified by the Borrower and EdH and is legally binding upon the Borrower and EdH in accordance with its terms. Section 6.03. The date is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.04. The obligations of the Borrower under Article IV of this Agreement and the provisions of Section 5.02 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date twenty years after the date of this Agreement, whichever shall be the earlier. K ICLE VII Representative of the Borrower; Addresses Section 7.01. Except as provided in Section 2.10 of this Agreement, the Secretary of State of the Borrower 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 purpose of Section 11.01 of the General Conditions: For the Borrower: Secrftairerie d'Etat des Finances et des Affaires Economiques Palais des Ministares Port-au-Prince Haiti -8- Cable address: Telex: Secr6tairerie d'Etat des 2030 347 Finances et des Affaires Economiques Port-au-Prince Haiti For the Association: International Development Association 1818 H Street !.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) 64145 (WUI) or 197688 (TRT) 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 Colombia, United States of America, as of the day and year first above written. REPUBLIC OF HAITI By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /iidn Regional Vice President Latin America and the Caribbean -9- 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 SDR Equivalent) to be Financed (1) Materials and equip- 9,790,000 100% of foreign ment for two diesel expenditures units, ancillary works and services, Part A of the Project (2) Materials and equipment, 2,670,000 100% of foreign Part B of the Project expenditures (3) Materials and equipment, 750,000 100% of foreign Part D of the Project expenditures (4) Materials, equipment 440,000 50% of foreign and services, Part F expenditures of the Project (5) Civil works, Parts A, 1,860,000 100% of foi.eign B and D of the Pro- expenditures, ject and if by domes- tic contractors, 60% of local expenditures (6) Civil works, Part F 180,000 50% of foreign of the Project expenditures (7) Consultants' services, 4,890,000 100% of foreign under Parts C and E expenditures of the Project - 10 - Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (8) Training, Part E of 220,000 100% of foreign the Project expenditures (9) Unallocated 2,300,000 TOTAL 23,100,000 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 (b) the term "local expenditures" means expenditures in the currency of the Borrower or 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 $800,000 may be made in respect of Category 5 on account of payments made for such expenditures before that date but after July 1, 1981. - 11 - 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph 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 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 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. - 12 - SCHEDULE 2 Description of the Project Part A: Construction of a new Diesel power station at Carrefour in Port-au-Prince with two 7 MW generators providing an additional net capacity of 14 MW and with future accommodations for three additional units; Part B: Rehabilitation of about 10 km2 of the electricity distribution network in Port-au-Prince; Part C: Carrying out of surveys and a feasibility study and the preparation of bidding documents for the proposed Guayamouc I hydroelectric plant, under terms of reference satisfactory to the Association; Part D: Construction of new headquarters office space for EdH; Part E: Strengthening of the management and operations of EdH through the employment of consultants and experts in the fields of planning, design, construction, administration and training and through the carrying out of staff training programs satisfactory to the Association; and Part F: Repair and renewal of facilities at the Peligre hydro- electric station. The Project is expected to be completed by June 30, 1985. 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 day of , 198 . FOR SECRETARY