Rwanda - Water Supply Project : Credit 1345 - Credit Agreement - Conformed

OFFICIAL DOCUMENTS CREDIT NUMBER 1345 RW Development Credit Agreement (Water Supply Project) between RWANDESE REPUBLIC and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1983 CREDIT NUMBER 1345 RW DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated C), L 1983, between the RWANDESE REPUBLIC (hereinafter 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 Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) the Project will be carried out by the Etablissement Public de Production, de Transport et de Distribution d'Eau, de 1'Electricite et de Gaz (hereinafter called ELECTROGAZ), a public utility of the Borrower responsible for the production, trans- portation and distribution of electricity, water and gas within the Rwandese Republic, established and operating under Decree-law No. 18-76 of April 20, 1976, as amended from time to time, with the Borrower's assistance and, as part of such assistance, the Borrower will make available to ELECTROGAZ the proceeds of the Credit as hereinafter provided; (C) the Borrower and the French Caisse Centrale de Cooperation Economique (hereinafter called CCCE) have entered into an agreement (hereinafter called the CCCE Credit Agreement) pursuant to which CCCE will grant a credit (hereinafter called the CCCE Credit) to assist in financing Part B 1 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 set forth herein and in the Project Agreement of even date herewith between the Association and ELECTROGAZ; 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 June 30, 1980, with the same force and effect as if they were fully set forth herein -2- 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 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 between the Association and ELECTROGAZ of even date herewith, as the same may be amended from time to time, and such term includes all Schedules to the Project Agreement; (b) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and ELECTROGAZ pursuant to Sec- tion 3.01 (b) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Sub- sidiary Loan Agreement; and (c) "Project Preparation Advance" means the Project Pre- paration Advances granted by the Association to the Borrower pur- suant to exchanges of letters dated March 19, 1980 and August 1, 1980, and June 30, 1982 and September 21, 1982, between the Borrower and the Association. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Bor- rower, on the terms and conditions set forth or referred to in this Agreement, an amount in various currencies equivalent to twelve million Special Drawing Rights (SDR 12,000,000). 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 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. -3- (b) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and pay to itself the amount required to repay the prin- cipal amount of the Project Preparation Advance withdrawn and outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advance shall thereupon be cancelled. 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 of the Schedule to the Project Agreement. Section 2.04. The Closing Date shall be June 30, 1988, or such later date as the Association shall establish. The Associa- tion shall promptly notify the Borrower of such later date. The Borrower may request at any time the establishment of a later date for the purposes of this Section. 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 Agree- ment 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 restrictions of any kind imposed by, or in the territory of, the Borrower; 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 from time to time. Section 2.07. Commitment charges and service charges shall be payable semiannually on May 1 and November 1 in each year. -4- Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each May 1 and November 1 commencing May 1, 1993, and ending November 1, 2032, each installment to and including the installment payable on November 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. ELECTROGAZ is designated as representative of the Borrower for the purposes of taking any action required or permitted 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 Agree- ment, the Borrower shall cause ELECTROGAZ to perform, in accor- dance with the provisions of the Project Agreement and the Subsidiary Loan 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 ELECTROGAZ 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 ELECTROGAZ under the Subsidiary Loan Agreement to be entered into between the Borrower and ELECTROGAZ under terms and conditions which shall have been approved by the Association and which shall include a repayment period of 20 years including a five-year grace period, an interest rate of ten and ninety-seven hundredths per cent (10.97%) per annum and the assumption of exchange risks by ELECTROGAZ. Such interest rate shall be subject to revision if the Borrower, the Association and ELECTROGAZ, following an exchange of views, agree that such rate threatens the financial position of ELECTROGAZ. - 5 - (c) The Borrower shall exercise its rights under the Subsidiary Loan Agreement in such manner as to protect the interests of the Borrower and 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 ensure that: (i) the total amount of receivables on account of gas, electricity and water supplied to all customers by ELECTROGAZ, including the most recent month's billings, not exceed four months' billings; and (ii) the total amount of such receivables due from governmental customers not exceed three month's billings to such customers. Section 3.03. The Borrower shall take such steps as shall be necessary on its part to permit ELECTROGAZ to comply with its obligations under Section 4.05 of the Project Agreement. ARTICLE IV Remedies of the Association Section 4.01. For the purposes of Section 6.02 of the Gen- eral Conditions the following additional events are specified pursuant to paragraph (h) thereof: (a) ELECTROGAZ shall have failed to perform any of its obligations under the Project Agreement. (b) As a result of events which have occurred after the date of the Development Credit Agreement, an extraordinary situa- tion shall have arisen which shall make it improbable that ELECTROGAZ will be able to perform its obligations under the Pro- ject Agreement. (c) Decree-law No. 18-76 of the Bortower dated April 20, 1976, shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of ELECTROGAZ to perform any of its obligations under the Project Agreement. (d) The Borrowet or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of ELECTROGAZ or for the suspension of its operations. - 6 - (e) (i) Subject to subparagraph (ii) of this paragraph: (A) The right of the Borrower to withdraw the proceeds of the CCCE Credit shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing therefor, or (B) the CCCE Credit shall have become due and payable prior to the agreed maturity thereof. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Association that: (A) such suspension, cancel- lation, 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 consistent with the obligations of the Borrower under this Agreement. Section 4.02. For the purposes of Section 7.01 of the Gen- eral Conditions, the following additional events are specified pursuant to paragraph (d) thereof: (a) The 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 Associa- tion to the Borrower and ELECTROGAZ; and (b) Any event specified in paragraphs (c), (d) or (e) (i) (B) of Section 4.01 of this Agreement shall occur. ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the Subsidiary Loan Agreement has been executed on behalf of the Borrower and ELECTROGAZ; and - 7 - (b) the Association has received the report of the auditors on the financial statements of ELECTROGAZ for the fiscal year ended December 31, 1981. 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 by ELECTROGAZ and signed in its name and is legally binding upon ELECTROGAZ in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly authorized and signed by the Borrower and ELECTROGAZ and is legally binding upon the Borrower and ELECTROGAZ in accordance with its terms. Section 5.03. The date October 12, 1983, is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.04. The obligations of the Borrower under Section 3.02 of this Agreement and the provisions 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 twenty years after the date of this Agreement, whichever shall be the earlier. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. Except as provided in Section 2.09 of this Agreement, the Minister 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 6.02. The following addresses are specified for the purpose of Section 11.01 of the General Conditions: For the Borrower: Ministere des Finances Botte Postale 158 Kigali Rwandese Republic -8- Cable address: Telex: MINIFIN 04 Kigali 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) 64145 (WUI) 89650 (WUT) 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 Columbia, United States of America, as of the day and year first above written. RWANDESE REPUBLIC By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President Eastern Africa - 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 to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Civil Works 1,840,000 60% (2) Pipelines (includ- 4,420,000 65% ing installation) (3) Equipment and 1,470,000 100% of foreign Materials; books, expenditures and Part C of the 90% of local Project expenditures (ex- factory cost) (4) Consultants' 1,840,000 100% of foreign Services, train- expenditures ing (5) Refunding of Project 920,000 Amount due under Preparation Advance Section 2.02 (b) (6) Unallocated 1,510,000 TOTAL 12,000,000 2. To the extent that the amount allocated to Category 5 is in excess of the amount required, adjustment will be made by reallocation to Category 6. 3. 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 - 10- 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. 4. The disbursement percentages have been calculated, in com- pliance with the policy of the Association, so 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 ser- vices, 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. 5. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expend- itures prior to the date of this Agreement. 6. 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 tae Associatiot., 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 ex- penditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 7. 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 expend- itures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restricting or - 11 - limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Bor- rower, 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 The objectives of the Project are: (a) to improve and expand water supply facilities in the towns of Cyangugu, Kibungo, Kibuye, Rubengeri and Rwamagama; and (b) in conjunction with projects financed by other development organizations, to strengthen the management and staff capabilities of ELECTROGAZ and improve the quality of its services to consumers. The Project consists of the following Parts: Part A: Improvement and Expansion of Water Supply Facilities in the five towns, as follows: 1. Cyangugu (a) Intake in the Wigiti stream supplied by four springs (Kabugi, Rugomero, Kabingo and Kareko); (b) A water treatment plant with a capacity of about 520 m3/day in the Murangi area; (c) A new reservoir of about 50 m3/day capacity to store treated water and to supply houses in the Murangi area; (d) A pumping station of about 330 m3/day capacity, to supply the Cyangugu eastern and northern areas; (e) A rising main, 100 mm diameter, 900 m long and a transmission main, 100 mm diameter, 3.05 km long, to supply the eastern and northern areas; (f) Four new service reservoirs with capacities ranging from 50 m3 to 200 m3, and rehabilitation of the fire protection reservoir of the airport; (g) Distribution pipelines, including 11.37 km of primary distribution pipes of 50 mm to 140 mm diameter and 2.0 km of secondary distribution pipes of 50 mm dia- meter; and (h) About thirteen public standpipes. - 13 - 2. Kibungo (a) Rehabilitation of the two existing spring protection units and improvement of new springs in the Rwasaburo Valley between Kabinbizi spring and reservoir Rl; (b) Construction of a test well near the Rwasaburo water stream to prepare a second stage of the extension of facilities in 1990; (c) Supply lines, 75 to 100 mm diameter, 2 km long, between the springs and reservoir Rl; (d) A treatment plant of about 4 1/s capacity; (e) A new pumping plant where new pumping equipment (one pumping set 8 1/s, 300 m head, 45 kW) would be installed in addition to the existing equipment; (f) One rising main, 100 mm diameter, 3.4 km long; (g) One reservoir of about 250 m3 capacity; and (h) A distribution network including about 13 km of primary distribution pipes 50 to 200 mm diameter, 1 km of secondary distribution pipes 50 mm diameter, and 16 public standpipes. 3. Kibuye (a) Improvement of the protection of the three existing spring units; (b) A new treatment plant of about 625 m3/day capacity, including lime and chlorine treatment facilities equipped with gravity dosing units, storage facilities for chemicals and a control room; (c) A new concrete service reservoir, of 150 m3 capacity, at ground level; and (d) Distribution pipelines, including about 6.5 km of primary distribution pipes 50 mm to 100 mm diameter, and 1.0 km of secondary distribution pipes 50 mm diameter, and 20 public standpipes. - 14 - 4. Ruhengeri (a) Tapping of Mutobo Springs at about 10 km from Rahengeri; (b) A treatment plant, 1,195 m3/day capacity, located at 2 km from Ruhengeri; (c) A new concrete reservoir of about 600 m3 capacity, at ground level; (d) About 15 km of transmission pipelines 50 mm to 200 mm in diameter; (e) Distribution pipelines, including about 18 km of pri- mary distribution pipes of 50 mm to 280 diameter and km of secondary distribution pipes, 50 mm dia- meter; and (f) Twenty-nine public standpipes. 5. Rwamagana (a) A raw water intake in Lake Muhazi consisting of a screen and a 100 m long, 140 mm diameter PVC pipe supported by a foot-bridge; (b) A raw water pumping station designed to house 3 electric-drive pumps (30 mY/hour, 10 m head, 2.2 kW per unit) but initially equipped with 2 pumps only (one in operation and one in stand-by); (c) A treatment plant including two treatment units of 600 m3/day capacity; (d) A treated water pumping station designed to house 3 electric-drive pumps (30 m3/hour, 155 m head, 30 kW per unit), but initially equipped with two pumps only; (e) Rising main pipes 90 and 135 mm diameter, about 6 km long; (f) Distribution pipelines including about 9 km of primary distribution pipe, 50 to 250 mm diameter and 1 km of secondary distribution pipes, 50 mm diameter; and (g) Twenty-six public standpipes. - 15 - Part B: Improvement of the Organization and Management of ELECTROGAZ: 1. Strengthening and improving the organization and management of ELECTROGAZ so as to ensure efficient operation of its facilities and upgrade the level and quality of its services, including the establishment of a system for the management of inventories and of cost accounting. 2. Construction and equipping of a training center, in- cluding the supply of training equipment. 3. Carrying out a training program for ELECTROGAZ person- nel, including the award of fellowships for overseas training. Part C: Hygiene: 1. Acquisition and distribution to primary and secondary schools of text books on hygiene. 2. Training of primary school teachers to teach courses in hygiene. Part D: Tariff Study 1. A study on tariffs for water, gas and electricity, based on long-term marginal costs nation-wide and covering policies and tariff structure. 2. Detailed engineering study for water supply in the lava regions, including preparation of bidding documents. 3. Organizational and management study for rural water supply operations on the national level, including cost-recovery mechanisms. The Project is expected to be completed by June 30, 1987. 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 a , 198 3. FOR SECRETARY