Rwanda - Thrid BRD Project : Credit 1344 - Credit Agreement - Conformed

C DIT NUMBER 1344 RW Development Credit Agreement (Third BRD Project) between RWANDESE REPUBLIC and INTERNATIONAL DEVELOPKENT ASSOCIATION Dated 1983 CREDIT NUMBER 1344 RW DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated .- , 1983 between the RWANDESE REPUBLIC (h rein fter called the Borrower or Rwanda) 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 Section 3.01 of this Agreement by extending the Credit as hereinafter pro- vided; (B) The Project will be carried out by Banque Rwandaise de Developpement with the Borrower's assistance and, as part of such assistance, the Borrower will make available to Banque Rwandaise de Developpement a portion of the proceeds of the Credit as here- inafter 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 set forth hereinafter and in the Project Agreement of even date herewith between the Association and Banque Rwandaise de D6veloppement; 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, subject, however, to the following modifications thereof set forth in the Schedule to this Agreement (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, 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 have the respective meanings therein set forth and the following additional terms have the following meanings: - 2 - (a) "BRD" means Banque Rwandaise de Developpement, estab- lished by the Borrower's Law of August 5, 1967, as amended by Decree-Laws of October 8, 1974 and June 19, 1981 and as said Law may be further amended from time to time. (b) "Project Agreement" means the agreement of even date herewith between the Association and BRD, as such agreement may be amended from time to time, and such term includes all agree- ments supplemental to the Project Agreement. (c) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and BRD pursuant to Section 3.01 (b) of this Agreement, as the same may be amended from time to time as provided in this Agreement. (d) "Sub-loan" means a loan or credit made or proposed to be made by BRD to an Investment Enterprise for an Investment Pro- ject out of the equivalent of the proceeds of the Credit relent to BRD under the Subsidiary Loan Agreement, and "Free-limit Sub- loan" means a Sub-loan, as so defined, which qualifies as a Free-limit Sub-loan pursuant to the provisions of Section 2.02 (b) of this Agreement. (e) "Investment Enterprise" means an enterprise to which BRD proposes to make or has made a Sub-loan. (f) "Small-scale Investment Enterprise" means an Investment Enterprise, with: (i) net assets (calculated as total assets minus amortization) of less than fifteen million Rwandese Francs; and (ii), except as the Association shall otherwise agree, less than 30 employees. This definition supersedes the definition set forth in the Prior Credit Agreements. (g) "Investment Project" means a specific development proj- ect to be carried out by an Investment Enterprise utilizing the proceeds of a Sub-loan. (h) "Rwandese Francs" means the currency of the Borrower. (i) "Foreign currency" means any currency other than Rwandese Francs. (j) "Statutes" means the Borrower's Law of August 5, 1967, referred to in paragraph (a) of this Section. -3- (k) "Statement of Policy" means the Motion de Politique Generale of BRD approved by the TBoard of Directors of BRD on January 20, 1975 and the Principes d'Intervention of BRD approved by the Board of Directors of BRD on January 28, 1976, both as amended to the date of this Agreement, and both as may be further amended from time to time with the agreement of the Association. (1) "Prior Credit Agreements" means the Development Credit Agreements (Credit Number 655 RW and Credit Number 896 RW) between the Borrower and the Association dated August 20, 1976 and July 13, 1979, respectively, and "Prior Credits" means the Credits provided for therein. (m) "Subsidiary" means any company of which a majority of the outstanding voting stock or other proprietary interest is owned or effectively controlled by BRD or by any one or more sub- sidiaries of BRD. (n) "Special Guarantee Fund" means the fund created under the Decree-law of the Borrower dated February 9, 1978 to provide guarantees to borrowers from its participating credit institu- tions which cannot offer other security. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Bor- rower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various curren- cies equivalent to six million five hundred thousand Special Drawing Rights (SDR 6,500,000) for use by the Borrower and BRD. Section 2.02. (a) Subject to the provisions of paragraphs (b), (c), (d) and (e) of this Section, BRD, on behalf of the Borrower pursuant to Section 2.03 of this Agreement, shall be entitled to withdraw from the Credit Account: (i) amounts expended (or if the Association shall so agree, such amounts as shall be required to meet expenditures to be made) for the reasonable cost in foreign currency of imported goods (except goods described in paragraph (c) of this Section) and services required for carrying out the Invest- ment Project in respect of which the withdrawal is requested; (ii) the equivalent of eighty percent (80%) of the invoiced price paid for goods purchased for Investment Projects as described in paragraph (c) (i) and (ii) of this Section; and (iii) the equivalent of sixty-five percent (65%) of the cost of construction and civil works included in the Investment Projects. Provided, however, that unless the Association shall otherwise agree, the amount of the Credit withdrawn from the Credit Account for Sub-loans to Small-scale Investment Enterprises shall not exceed in the aggregate SDR 2,300,000 equivalent, and provided further that no amount shall be withdrawn from the Credit Account in respect of an Investment Project unless: (A) the Sub-loan for such Investment Project shall have been approved by the Associa- tion; or (B) the Sub-loan shall be a Free-limit Sub-loan for which the Association shall have authorized withdrawals from the Credit Account. (b) A Free-limit Sub-loan shall be a Sub-loan for an Investment Project in an amount to be financed under the Develop- ment Credit Agreement which together with any other amount or amounts previously financed for the same Investment Project under the Development Credit Agreement or under any Prior Credit Agree- ment and not repaid, does not exceed, in the aggregate, the equivalent of two hundred thousand dollars ($200,000) and which, when added to all other Free-limit Sub-loans financed under the Development Credit Agreement, does not exceed, in the aggregate, the equivalent of two million five hundred thousand dollars ($2,500,000); the foregoing amounts being subject to change from time to time as determined by the Association. (c) Except as the Association shall otherwise agree, with- drawals from the Credit Account may be made on account of expend- itures in the currency of the Borrower only for: (i) goods pre- viously imported into its territory through normal trade channels and from countries which are members of the Bank (or from Swit- zerland or Taiwan); (ii) goods produced in the territory of the Borrower to a substantial extent from components or raw materials imported as described in subparagraph (c)(i) of this Section and purchased by Investment Enterprises to carry out Investment Pro- jects; and (iii) construction and civil works as described in subparagraph (a) (iii) of this Section. - 5 - (d) Except as the Association shall otherwise agree, no withdrawals shall be made on account of: (i) expenditures made prior to the date of this Agreement, by an Investment Enterprise, or by the Borrower for the part of the Project described in para- graph (a) (iii) of Section 3.01 of this Agreement; or (ii) expen- ditures made in respect of a Sub-loan subject to the Associa- tion's approval more than ninety days prior to the date on which the Association shall have received the application and informa- tion required under Section 2.03 (b) of the Project Agreement; or (iii) expenditures made in respect of a Free-limit Sub-loan more than ninety days prior to the date on which the Association shall have received the request and information required by Section 2.03 (c) of the Project Agreement. (e) The Borrower shall be entitled to withdraw from the Credit Account such amounts as shall be required to cover pay- ments made (or, if the Association shall so agree, to be made) for the reasonable cost of services required to carry out that part of the Project described in paragraph (a) (iii) of Section 3.01 of this Agreement (except taxes) up to the equivalent of SDR 92,000. Any of such amount not required for such purpose will be made available to BRD as provided in paragraph (b) of Section 3.01 of this Agreement. Section 2.03. Except in respect of disbursements for the part of the Project described in paragraph (a) (iii) of Section 3.01 of this Agreement, BRD 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. Section 2.04. The Closing Date shall be December 31, 1988 or such later date as the Association shall establish. The Associa- tion shall promptly notify the Borrower and BRD 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 percent (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 from the Credit Account or shall be cancelled. - 6 - (b) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without re- strictions 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 percent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.07. The commitment charges and service charges shall be payable semiannually on April 1 and October 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each April 1 and October 1 commencing October 1, 1993, and ending April 1, 2033, each installment to and including the installment payable on April 1, 2003, to be one-half of one percent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half percent (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. ARTICLE III Description of the Project; Use of Proceeds of the Credit Section 3.01. (a) The Project for which the Credit is granted consists in: (i) the financing by BRD of economic development in the territory of the Borrower through loans for productive purposes to enterprises in 'such terri- tory, and through other productive investment in such enterprises, all for specific development projects and in accordance with the Statutes and Statement of Policy of BRD, including: -7- (ii) the granting by BRD of Sub-loans to small-scale Investment Enterprises; and (iii) carrying out studies necessary for the preparation of a Program for the development of small-scale enterprises and a study of the interest rate structure in Rwanda. (b) Under a Subsidiary Loan Agreement to be entered into between the Borrower and BRD on terms and conditions which shall have been approved by the Association, the Borrower shall relend to BRD out of the proceeds of the Credit the equivalent in Rwandese Francs of the amounts withdrawn by BRD pursuant to para- graph (a) of Section 2.02 above, at the rate of 8% interest to assist BRD in carrying out the part of the Project described in paragraph (a) (i) of this Section and at the rate of 5% interest to assist BRD in carrying out the part of the Project described in paragraph (a) (ii) of this Section. The foreign exchange risk regarding the funds relent under the Subsidiary Loan Agreement shall be borne by the Borrower. (c) The Borrower shall exercise its rights under the Sub- sidiary Loan Agreement 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 Subsidiary Loan Agreement or any provision thereof. Section 3.02. In order to assist the Borrower in the pre- paration of the studies referred to in Section 3.01 (a) (iii) of this Agreement, the Borrower shall employ or cause BRD to employ consultants whose qualifications, experience and terms and condi- tions of employment shall be satisfactory to the Association, such consultants to be selected in accordance with principles satisfactory to the Association on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. Section 3.03. Not later than March 31, 1984, the Borrower shall furnish to the Association, for its comment and review, the studies referred to in Section 3.01 (a) (iii) of this Agreement. Section 3.04. Not later than December 31, 1984, the Borrower shall furnish to the Association, for its comment and review, a -8- program for the development of small-scale enterprises, taking into account the results of the studies included in the part of the Project described in paragraph (a) (iii) of Section 3.01 of this Agreement. Section 3.05. The Borrower shall not take, or permit any of its political subdivisions, or any of its agencies or instrumen- talities, or any agency or instrumentality of any of its politi- cal subdivisions, to take any action which would prevent or materially interfere with the performance by BRD of any of its obligations under the Project Agreement or the Subsidiary Loan Agreement, and shall take or cause to be taken all reasonable action which shall be required on its part to enable BRD to per- form such obligations. Section 3.06. Prior to any amendment to the Statutes of BRD, the Borrower shall inform the Association of the amendment pro- posed and shall afford the Association a reasonable opportunity to exchange views on the proposed amendment with the Borrower and BRD. Section 3.07. The Borrower shall bear all risk of loss re- sulting from changes in the rates of exchange between the various currencies (including Rwandese Francs) used in BRD's borrowing and lending operations. Section 3.08. The Borrower shall take all such steps as shall be necessary or useful to encourage the utilization by cre- dit institutions of the Special Guarantee Fund for the benefit of their borrowers. Section 3.09. By December 31, 1983, the Borrower shall ex- change views with the Association on the results of the improve- ments introduced in the Special Guarantee Fund pursuant to the provisions of Section 3.08 above. 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: -9- (a) a default shall occur in the performance of any obliga- tion of BRD under the Project Agreement or under any other prej- ect agreement between the Association and BRD; (b) the Statutes of BRD shall have been amended so as to affect materially and adversely the operations or financial condition of BRD; (c) BRD shall be unable to pay its debts as they mature or any action or proceeding shall have been undertaken whereby any of the property of BRD shall or may be distributed among its creditors; (d) any part of the principal amount of any loan to BRD having an original maturity of one year or more shall, in accord- ance with its terms, have become due and payable in advance of maturity, as provided in the relative contractual instruments, or any security for any such loan shall have become enforceable; (e) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of BRD or for the suspension of its operations; and (f) a Subsidiary or any other entity shall have been cre- ated or acquired or taken over by BRD, if such greation, acquisi- tion or take over would adversely affect the conduct of BRD's business, its financial situation, the efficiency of its manage- ment and personnel or the carrying out of the Project. 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) any event specified in paragraphs (a), (b) or (f) of Section 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 BRD; and (b) any event specified in paragraphs (c), (d) or (e) of Section 4.01 of this Agreement shall occur. - 10 - 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, namely, that: (a) the Subsidiary Loan Agreement referred to in Section 3.01 (b) of this Agreement has been signed by the Borrower and BRD; and (b) the Statement of Policy has been amended in a manner acceptable to the Association so as to provide for: (i) positive interest rates in real terms on all loans granted by BRD; and (ii) the mandatory calculation of economic rates of return for all non-service projects and, where feasible, projects of expan- sion, to be financed by BRD and for which BRD will commit at least two hundred thousand dollars equivalent. Section 5.02. The following are specified as additional mat- ters, within the meaning of Section 12.01 (b) of the General Con- ditions 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 BRD; executed and delivered on behalf of BRD and con- stitutes a valid and binding obligation of BRD in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly autho- rized or ratified by, and constitutes a valid and binding obliga- tion of, the Borrower and BRD in accordance with its terms. Section 5.03. The date /lVc,,., (2; 19i'is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.04. The provisions of Sections 3.06 and 4.02 of this Agreement shall cease and determine on the date on which this Agreement shall terminate or on a date twenty years after the date of this Agreement, whichever shall be the earlier. - 11 - ARTICLE VI Representative of the Borrower; Addresses Section 6.01. Subject to the provisions of Section 2.03 of this Agreement, the Minister of the Borrower at the time respons- ible 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 purposes of Section 11.01 of the General Conditions: For the Borrower: Minist're des Finances Botte Postale 158 Kigali Rwandese Republic 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 44098 (ITT) Washington, D.C. 248423 (RCA) 64145 (WUI) 89650 (WUT) or 197688 (TRT) - 12 - 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 i L'L'L LI By Regional Vice President Eastern Africa - 13 - SCHEDULE Modifications of General Conditions For the purpose of this Agreement, the provisions of the General Conditions are modified as follows: (a) The following subparagraph is added to Section 2.01: "14. The term 'Project Agreement' has the meaning set forth in paragraph (b) of Section 1.02 of the Development Credit Agreement." (b) The words "or for Investment Projects" are added after the words "the Project" at the end of Section 5.03. (c) Section 6.03 is deleted and replaced by the following new Section: "Section 6.03. Cancellation by the Association. If: (a) the right of the Borrower to make withdrawals from the Credit Account shall have been suspended with respect to any amount of the Credit for a continuous period of thirty days; or (b) by the date specified in Section 2.03 (e) of the Pro- ject Agreement no applications for approval or requests for authorization to withdraw from the Credit Account in respect of any portion of the Credit shall have been received by the Association or, having been so received, shall have been denied; or (c) after the Closing Date an amount of the Cre- dit shall remain unwithdrawn from the Credit Account, the Association may, by notice to the Borrower, terminate the right to request such approvals and authorizations or to make withdrawals from the Credit Account, as the case may be, with respect to such amount or portion of the Credit. Upon the giving of such notice such amount or portion of the Credit shall be cancelled." (d) The words "and the Project Agreement" are added after the words "the Development Credit Agreement" in Section 6.06. (e) The words "or the Project Agreement" are added after the words "the Development Credit Agreement" in Section 10.02. 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 1981. FOR SECRETARY