India - Fourth Ardc Credit Project : Credit 1209 - Credit Agreement - Conformed

CREDIT NUMBER /V09 IN Development Credit Agreement (Fourth ARDC Credit Project) between INDIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated c9% , 1982 CREDIT N%MBER /469 IN DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated .-- ( , 1982, 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 Borrower has also requested the International Bank for Reconstruction and Development (the Bank) to provide addi- tional assistance towards the financing of the Project and by an agreement of even date herewith between the Borrower and the Bank (hereinafter called the Loan Agreement) the Bank is agreeing to provide such assistance in an aggregate principal amount equiva- lent to one hundred ninety million dollars ($190,000,000) (here- inafter called the Loan); (C) the Borrower and the Association intend, to the extent practicable, that the proceeds of the Credit provided for in this Agreement be disbursed on account of expenditures on the Project before disbursements of the proceeds of the Loan provided for in the Loan Agreement are made; (D) the Project will be carried out by the Agricultural Refinance and Development Corporation, a statutory corporation established and operating under the laws of the Borrower (herein- after called ARDC), or any successor thereof, with the Borrower's assistance and, as part of such assistance, the Borrower will make available to ARDC the proceeds of the Credit as hereinafter provided and the proceeds of the Loan as provided in the Loan Agreement; 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 set forth hereinafter and in the Project Agreement of even date herewith among the Association, the Bank and ARDC; 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 June 30, 1980, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable o the 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 addi- tional terms have the following meanings: (a) "Project Agreement" means the agreement among the Association, the Bank and ARDC 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 supple- mental to the Project Agreement; (b) "ARDC Financial Arrangements" means the arrangements to be entered into between the Borrower and ARDC pursuant to Section 3.01 (b) of this Agreement, as the same may be amended from time to time; (c) "Loan Agreement" means the agreement of even date here- with between the Borrowe- and the Bank for the purpose of the Project, as such agreement may be amended from time to time; and such term includes the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated October 27, 1980, as made appl.Lcable to such agreement, all agreements supplemental to the Loan Agreement and all schedules to the Loan Agreement; (d) "State" means any State or Union Territory of the Bor- rower; (e) "LDB" means any State Cooperative Land Development Bank established and operating in a State in accordance with the laws of that State or of the Borrower, and where an LDB is a federa- tion of Primary Banks, the term "LDB" shall include all such Banks; - 3 - (f) "SCB" means any State Cooperative Bank established arid operating in a State in accordance with the laws of that State or of the Borrower, and the term "SCB" shall include any District Cooperative Bank and any Primary Agricultural Credit Society associated with such SCB; (g) "CB" means any Commercial Bank established and operat- ing in the Borrower's territory in accordance with the laws of the Borrower, and the term "CB" shall include any Regional Rural Bank; (h) "Participating Bank" means any LDB, SCB or CB making loans which are, or are proposed to be, refinanced by ARDC under the Project; (i) "Small Farmer" shall have the meaning assigned to it in Schedule 2 to the Project Agreement, as such Schedule may be amended from time to time by agreement among the Borrower, the Association, the Bank and ARDC; (j) . "Beneficiary" means any person, including a Small Farmer, group of persons, cooperative society, corporation or other entity which is eligible to receive a loan from a Partici- pating Bank under the Project; (k) "Scheme" means any minor irrigation or other agricul- tural development project which is, or is proposed to be, carried out under a loan which is, or is proposed to be, refinanced by ARDC under the Project; (1) "Category" means a category of items to be financed out of the proceeds of the Credit and of the Loan as set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (m) "Rs" means rupees in the currency of the Borrower; and (n) "Act" means the Agricultural Refinance and Development Corporation Act No. 10 of 1963, as amended to the date of 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 curren- cies equivalent to one hundred thirty-nine million Special Draw- ing Rights (SDR 139,000,000). 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, 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 required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions set forth or referred to in Section 2.05 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 Asso- ciation 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 February 15 and August 15 commencing February 15, 1992, and ending August 15, 2031, each installment to and including the installment payable on August 15, 2001, 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. -5- Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditzons. ARTICLE III Execution of the Project; Other Covenants Section 3.01. (a) Without any limitation or restriction upon any of its other obligations under the Development Credit Agree- ment, the Borrower shall cause ARDC 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 ARDC 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 (i) for the purpose of Part A of the Project, relend the proceeds of the Credit and of the Loan allo- cated from time to time to Categories (1) and (2), and (ii) for the purpose of Part B of the Project, make available the proceeds of the Credit and of the Loan allocated from time to time to Category (3), to ARDC under financial arrangements to be entered into between the Borrower and ARDC under terms and conditions which shall have been approved by the Association, including those set forth in Schedule 3 to this Agreement. (c) The Borrower shall exercise its rights under the ARDC Financial Arrangements in such manner as to protect the interests of the Borrower and the Association and to accomplish the pur- poses of the Credit, and except as the Association shall other- wise agree, the Borrower shall not assign, amend, abrogate or waive the ARDC Financial Arrangements or any provision thereof. Section 3.02. The Borrower shall participate with the Association and ARDC in the review and evaluation of the criteria for LDB's eligibility to receive financing from ARDC as and by the dates provided in Section 2.10 of the Project Agreement. Section 3.03. Except as the Borrower and the Association may otherwise agree, the Borrower shall: - 6 - (a) maintain the Standing Committee established for the purpose of supervising the carrying out of the rehabilitation programs referred to in paragraph B of Schedule 3 to the Project Agreement by the LDBs specified therein, and of such other re- habilitation programs with respect to other LDBs as the Borrower, the Association and ARDC may agree, and to provide the necessary support and guidance to such LDBs in carrying out the same; and (b) cause and enable said Committee to continue to employ suitable consultants to carry out, by May 31, 1982 and under terms of reference satisfactory to the Association appropriate organizational and management studies for the LDBs specified in paragraph B of Schedule 3 to the Project Agreement, including the preparation of plans designed to improve their performance in accordance with suitable time schedules. Section 3.04. In the event the Borrower authorizes or approves the establishment of a new entity to undertake primary responsibility for the provision of credit for agricultural development in the Borrower's territory, and to assume the rights and obligations of ARDC, including those under the Project Agree- ment, the ARDC Financial Arrangements and any other agreement or agreements of ARDC, the Borrower shall furnish to the Associa- tion, for its review and comments, the Borrower's plans with respect to the proposed organization and financial and admini- strative structures of such entity and shall take the Associa- tion's views into consideration in finalizing said plans. 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) ARDC shall have failed to perform any covenant, agree- ment or obligation of ARDC under the Project Agreement. (b) An extraordinary situation shall have arisen which shall make it improbable that ARDC will be eble to perform its obligations under the Project Agreement. -7- (c) The Borrower or ARDC, or any other authority having jurisdiction, shall have taken any action for the dissolution or disestablishment of ARDC or for the suspension of its operations. (d) The Act shall have been amended, suspended, abrogated, repealed or waived in such a way as to materially and adversely affect the ability of ARDC to carry out the covenants, agreements and obligations set forth in the Project Agreement. (e) ARDC shall have become unable to pay its debts as they mature or any action or proceeding shall have been taken by ARDC or by others whereby any of the property of ARDC shall or may be distributed among its creditors. (f) A default shall have occurred in the performance by the Borrower or by ARDC of any of its obligations under the ARDC Financial Arrangements. 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) any event specified in paragraphs (a) and (f) of Sec- tion 4.01 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 ARDC; and (b) any event specified in paragraphs (c), (d) and (e) 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) the execution and delivery of the Project Agreement on behalf of ARDC have been duly authorized or ratified by all necessary corporate action; (b) the execution and delivery of the ARDC Financial Arrangements on behalf of the Borrower and ARDC, respectively, -8- have been duly authorized or ratified by all necessary govern- mental and corporate action; and (c) all conditions precedent to the effectiveness of the Loan Agreement have been fulfilled, except for the effectiveness of this Agreement. Section 5.02. The following are specified as additional matters, 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: (a) that the Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, ARDC and is legally binding upon ARDC in accordance with its terms; and (b) that the ARDC Financial Arrangements have been duly authorized or ratified by, and executed and delivered on behalf of, the Borrower and ARDC and are legally binding upon the Bor- rower and ARDC in accordance with their terms. Section 5.03. The date /1c# )6 1902I is hereby specified for the purposes of Section 12.04 of the General Conditions.- Section 5.04. The obligations of the Borrower under Section 3.04 and the provisions of paragraphs (a) and (b) of Section 4.02 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date fifteen years after the date of this Agreement, whichever shall be the earlier. ARTICLE VI Representatives of the Borrower; Addresses Section 6.01. The Secretary of, or any Additional Secre- tary, Joint Secretary, Director, Deputy Secretary and Under Secretary in, the Department of Economic Affairs of the Ministry of Finance of the Borrower is designated as representative of te Borrower for the purposes of Section 11.03 of the General Condi- tions. -9- Section 6.02. The following addresses are specified for the purpose 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 110001 India Cable address: Telex: ECOFAIRS 953-31354 New Delhi 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 - 10 - of Columbia, United States of America, as of the day and year first above written. INDIA By /, W 1 Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President South Asia - 11 - SCHEDULE 1 Withdrawal of the Proceeds of the Credit and of the Loan 1. Tb table below sets forth the Categories of items financed out of the proceeds of the Credit and of the Loan, the allocation of amounts of such proceeds to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of Amount of the Credit the Loan Allocated Allocated % of (Expressed (Expressed Expenditures in SDR in Dollar to be Category Equivalent) Equivalent) Financed (1) Loans for minor 107,200,000 146,600,000 34% of the irrigation (ex- amounts dis- cluding pumpset bursed by electrifica- ARDC to re- tion), land finance such development loans and soil con- conservation and reclama- tion (2) Loans for plan- 30,150,000 41,300,000 34% of the tations, hor- amounts dis- ticulture, bursed by livestock, ARDC to re- fisheries, stor- finance such age and mar- loans ket yards (3) Training 1,650,000 2,100,000 90% TOTAL 139,000,000 190,000,000 2. The disbursement percentages have been calculated in com- pliance with the policy of the Association and the Bank that no - 12 - proceeds of the Credit and of the Loan 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, manu- facture, 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 and of the Loan decreases or increases, the Association or the Bank may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consis- tent with the aforementioned policy of the Association and the Bank. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expen- ditures prior to the date of this Agreement, except that withdrawals in an aggregate amount not exceeding $15,000,000 may be made on accounts of payments made for such expenditures before that date but after January 1, 1982. In addition, except as the Borrower, the Association and the Bank shall otherwise agree, and until all amounts of the Credit allocated to any Category shall have been withdrawn or committed, no withdrawals shall be made from the Loan Account under such Category except under commit- ments entered into by the Bank pursuant to Section 5.02 of the General Conditions referred to. .n Section 1.01 of the Loan Agree- ment. 4. Notwithstanding the allocation of an amount of the Credit and of the Loan or the disbursement percentages set forth in the table in paragraph 1 above, if the Ass)ciation or 6he Bank has reasonably estimated that the amount of the Credit and of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Cate- gory, the Association or the Bank may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit or of the Loan which are then allocated to another Category and which in the opinion of the Association or the Bank 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 'n order that firther with- drawals under such Category may continue until all expenditures thereunder shall have been made. 5. If the Association or the Bank shall have reasonably deter- mined that the procurement of any item in any Category is incon- sistent with the procedures set forth or referred to in this - 13 - Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit or of the Loan and the Association or the Bank may, without in any way restricting or limiting any other right, power or remedy of the Association under this Agreement or the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Credit or of the Loan as, in the Association's or the Bank's ' reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit or of the Loan. - 14 - SCHEDULE 2 Description of the Project The Project is to assist in furthering the agricultural development of the Borrower's territory and in improving the operations of the agricultural credit institutions operating therein. The Project consists of the following Parts: Part A: The carrying out of a two-year program to finance invest- ments by Beneficiaries in minor irrigation (including land development, soil conservation and reclamation and pumpset electrification) and other agricultural development (including livestock, horticulture, fisheries, storage and marketing, forestry, farm mechanization, integrated rural development programs and agro-processing facilities) through the refinancing by ARDC of loans made for such purposes by the Participating Banks. Part B: The carrying out by ARDC of a training program to upgrade the professional skills of the staff of the agricultural credit institutions operating in the Borrower's territory, including the staff of the Participating Banks. The Project is expected to be completed by December 31, 1983. - 15 - SCHEDULE 3 Principal Terms and Conditions of the ARDC Financial Arrangements (1) The proceeds of the Credit and of the Loan referred to in Section 3.01 (b) (i) of this Agreement shall be relent by the Borrower to ARDC on the following terms: (a) in respect of ARDC refinancing not exceeding 9 years: (i) interest rate of not less than 6.75% per annum, less 0.25% for repayment of principal and interest by the due dates; (ii) repayment of principal at the end of 9 years; (b) in respect of ARDC refinancing in excess of 9, but not exceeding 15, years: (i) interest rate of not less than 7.25% per annum, less 0.25% for repayment of principal and interest by the due dates; (ii) repayment of principal at the end of 15 years; and (c) the Borrower shall bear the foreign exchange risk. (2) The proceeds of the Credit and of the Loan referred to in Section 3.01 (b) (ii) of this Agreement shall be made available by the Borrower to ARDC in accordance with the Borrower's normal arrangements for such development assistance. (3) The terms and conditions applicable to ARDC's refinancing of loans made by the Participating Banks for minor irrigation and other agricultural development projects under Part A of the Pro- ject, shall be governed by the provisions set forth or referred to in Section 2.02 of the Project Agreement. 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 a day of 1981. FORS EA R Y