Central Africa - Second Technical Assistance Project : Credit 1581 - Credit Agreement - Conformed

CREDIT NUMBER 1581 CA OFFICIAL DOCUMENTS Development Credit Agreement (Second Technical Assistance Project) between CENTRAL AFRICAN REPUBLIC and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1985 CREDIT NUMBER 1581 CA DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated ZYI) 00 I Y' , 1985, between CENTRAL AFRICAN REPUBLIC (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS (A) the Borrower, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Association to assist in the financing of the Project; (B) the Borrower has obtained from the Federal Republic of Germany through Gesellschaft fHr Technische Zusammenarbeit (GTZ) a grant (the GTZ Grant) to assist in financing part of the Project on the terms and conditions set forth in an agreement (the Legal Adviser Agreement) entered into between the Borrower and GTZ by an exchange of letters dated July 28 and 29, 1983, respectively; 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 in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The General Conditions Applicable to Develop- ment Credit Agreements of the Association, dated January 1, 1985, (the General Conditions) constitute an integral part of this Agreement. Section 1.02. 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) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement; (b) "CAADE" means Caisse Autonome pour l'Amortissement des Dettes de l'Etat, the public debt management fund of the Bor- rower; -2- (c) "Coordinating Committee" means the Coordinating Committee for Economic and Financial Policy, established by Decree No. 84.105 dated March 28, 1984, of the Borrower; (d) "Project Account" means the account referred to in Section 3.01 (b) of this Agreement; (e) "CFAF" means the currency of the Borrower; and (f) "Specialists" means the ten resident specialists enumerated in paragraph II of Schedule 3 to this Agreement. 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 the Development Credit Agreement, an amount in various currencies equivalent to eight million four hundred thousand Special Drawing Rights (SDR 8,400,000). 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 described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Credit. (b) The Borrower shall, for the purposes of the Project, open and maintain in CFAF a special account in a commercial bank on terms and conditions satisfactory to the Association. Deposits into, and payments out of, the Special Account shall be made in accordance with the pvovisions of Schedule 4 to this Agreement. Section 2.03. The Closing Date shall be June 30, 1989 or such later date as the Association shall establish. The Associa- tion shall promptly notify the Borrower of such later date. Section 2.04. (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- -3- 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 2.05. 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. Commitment charges and 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 Febru- ary 15 and August 15 commencing August 15, 1995, and ending February 15, 2035. Each installment to and including the install- ment payable on February 15, 2005 shall be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter shall be one and one-half per cent (1-1/2%) of such principal amount. Section 2.08. The currency of the French Republic is hereby specified for the purposes of Section 4.02 of the General Condi- tions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement, and, to this end, shall carry out the Project through its Ministry or High Commission responsible for Planning with due diligence and efficiency and in conformity with appropriate -4- economic, financial, legal, forestry and diamond marketing practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) Without limitation or restriction upon its obligations under paragraph (a) of this Section, the Borrower shall, exclu- sively for the purposes of the Project, establish and maintain at its Treasury a revolving project account in CFAF and shall: (i) make an initial deposit therein in an amount of CFAF 30 million; and (ii) thereafter replenish said account in eleven quarterly installments of CFAF 15 million each and a twelfth quarterly installment of CFAF 5 million. Section 3.02. Except as the Association shall otherwise agree, procurement of the goods, and Specialists' and consul- tants' services required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to this Agreement. Section 3.03. The Borrower shall: (a) not later than June 30, 1985, establish and thereafter maintain a Central Projects Office within its Ministry or High Commission responsi- ble for Planning to compile technical and financial data on all projects, whether at the planning stage or under implementation, financed partly or wholly with the Borrower's funds; (b) staff that Central Projects Office with well-qualified and experienced staff in adequate numbers; and (c) endow it with such functions and responsibilities as shall be acceptable to the Association. Section 3.04. The Borrower shall nominate and thereafter employ in the Office of its Minister or High Commissioner respon- sible for Planning the following persons with such powers and responsibilities as shall be acceptable to the Association: (a) a Project Coordinator who shall, inter alia, coordinate the activi- ties of the Specialists and consultants hired for the purposes of the Project; and (b) a Project Administrative Officer who shall, inter alia, undertake the administration of the Project. Section 3.05. The Borrower shall assign a team of national colleagues, with differing levels of training and experience to each one of the Specialists hired for the purposes of the Project as of the first day of these Specialists' employment. Such national colleagues shall have qualifications, experience and terms and conditions of employment satisfactory to the Associa- tion. -5- Section 3.06. In order to carry out Part B,3 of the Project, the Borrower shall award fellowships to be financed out of the proceeds of the Credit to suitably qualified persons and for training programs, both of which shall be acceptable to the Asso- ciation. Section 3.07. (a) The Borrower shall cause: (i) each of the Specialists, not later than October 31 of each year, to prepare a detailed work program for himself and his national colleagues for the upcoming year; (ii) each of the Specialists and the Project Coordinator, not later than March 31, June 30, September 30, and December 31 of each year, to prepare a quarterly progress report covering the activities of the Specialist and his national colleagues; and (iii) each of the Specialists and the Project Coordinator, not later than March 31 of each year, to prepare an annual report evaluating the implementation of his work program for the preceding year. (b) The Borrower shall promptly forward such work programs, quarterly progress reports, and annual reports to the Association for its review and comments. Section 3.08. The Borrower shall: (a) by December 31 of each year or such later date as the Borrower and the Association shall agree upon, prepare an annual recovery and development program for the following calendar year; and (b) transmit this program to the Association for its comments. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records and separate accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) Without limitation to the foregoing, the Borrower shall: (i) maintain or cause to be maintained separate accounts reflecting all expenditures on account of which withdrawals are requested from the Credit Account on the basis of statements of expenditure; (ii) retain, until one year after the Closing Date, all records (contracts, orders, invoices, bills, receipts and -6- other documents) evidencing the expenditures on account of which withdrawals are requested from the Credit Account on the basis of statements of expenditure; and (iii) enable the Association's representatives to examine such accounts and records. (c) The Borrower shall: (i) have the accounts referred to in paragraphs (a) and (b) of this Section including the Special Account for each fiscal year audited, in accord- ance with appropriate auditing principles con- sistently applied, by independent auditors accept- able to the Association and financed out of the Credit; (ii) furnish to the Association, as soon as available, but in any case not later than four months after the end of each such year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested, including without limitation to the foregoing, a separate opinion by said auditors in respect of the expenditures and records referred to in paragraph (b) of this Section as to whether the proceeds of the Credit withdrawn from the Credit Account on the basis of statements of expenditure have been used for the purpose for which they were provided; and (iii) furnish to the Association such other information concerning said accounts, records, Special Account and expenditures and the audit thereof as the Association shall from time to time reasonably request. ARTICLE V Remedies of the Association Section 5.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional event is specified, namely that Decree No. 84.105 of March 28, 1984 of the Borrower estab- lishing the Coordinating Committee shall have been amended, suspended, abrogated, repealed or waived without the Associa- tion's prior approval. Section 5.02, For the purposes of Section 7.01 (d) of the General Conditions, the following additional event is specified, namely, the event specified in Section 5.01 of this Agreement shall occur and shall continue for a period of 90 days after notice thereof shall have been given by the Association to the Borrower. 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 Special Account shall have been opened; and (b) the Project Account shall have been opened and the initial deposit referred to in Section 3.01 (b) shall have been made. Section 6.02. The date 90 days after the date of this Agree- ment is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister or High Commissioner responsible for Planning of the Borrower 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 purposes of Section 11.01 of the General Conditions: For the Borrower: High Commission for the Plan and for Financial Cooperation P.O.B. 696 Bangui, Central African Republic -8- Cable address: Telex: MINPLAN 5208 RC Bangui, Bangui, Central African Republic Central African Republic 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 duly authorized representatives, 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. CENTRAL AFRICAN REPUBLIC Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION Regional Vice President Western 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 so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Resident 3,320,000 100% Specialists (2) Housing 320,000 100% (3) Vehicles 60,000 100% (4) Vehicle main- 40,000 50% tenance, spare parts and vehicle operating costs (5) Salary supple- 90,000 100% ment for Project Coordinator (6) Project 50,000 100% of foreign Administrative expenditures Officer (7) Office operating 60,000 50% costs (8) Short-term con- 1,740,000 100% sultants (9) Training 370,000 100% of foreign expenditures - 10 Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (10) Goods and services 840,000 100% under Part B.3 of the Project (11) Special Account 530,000 Amounts to be deposited pur- suant to para- graph 3 (a) of Schedule 4 to this Agreement 02) Unallocated 980,000 TOTAL 8,400,000 2. For the purposes of tb's Schedule the term "foreign expendi- tures" means expenditureq .n the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of the Borrower. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expen- ditures: (a) prior to the date of this Agreement; and (b) under Category (10) until the Association shall have approved the items to be financed under said Category on the basis of proposals to be furnished by the Borrower through the Project Coordinator. - 11 - SCHEDULE 2 Description of the Project The objectives of the Project are to improve the Borrower's capacity to prepare and carry out an annual recovery and develop- ment program, to increase the Borrower's absorptive capacity in certain key economic sectors such as diamonds, forestry and transport, and to improve management and administration of its recovery and development program. The Project consists of the following Parts: Part A: Institutional Support 1. Strengthening the planning and the economic, financial and administrative capacity within the Borrower's Government, notably through: (a) implementation of fiscal discipline and coordina- tion and reinforcement of the management of public finances; (b) establishment of mechanisms and procedures to improve, selection of investment projects; (c) rationalization of the public sector and of the state and mixed enterprises sector; and (d) definition and implementation of appropriate macroeconomic and sectoral policies. 2. Export revitalization in the diamond and forestry pro- ducts sectors through identification and implementation of appropriate sectoral policies. Part B: Training, Preparation of Further Projepts and Addi- tional Activities 1. On-the-job training and job-related seminars to the national colleagues of the Specialists referred to in Section 3.05 of this Agreement. 2. Preparation of a transportation project, a further technical assistance project and one or more rehabili- - 12 - tation programs for state or mixed enterprises of the Borrower. 3. Further studies, training or related activities to be identified during Project implementation. The Project is expected to be completed by December 31, 1988. -13- SCHEDULE 3 Procurement and Consultants',Services I. Procurement of Goods 1. Except as the Association may otherwise agree, goods to be financed out of the proceeds of the Credit may be procured under contracts awarded on the basis of evaluation and comparison of bids invited from at least three qualified national or international suppliers, in a manner acceptable to the Association. 2. With respect to goods to be so procured, the procedures set forth in paragraphs 3 and 4 of Appendix 1 to the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in August 1984, shall apply. Where payments for such contracts are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contracts together with the other information required to be furnished to the Association pursuant to said paragraph 3 shall be furnished to the Association as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 4 (the Special Account Schedule) to this Agreement. II. Employment of Specialists and Consultants 1. In order to assist the Borrower in carrying out the Project, the Borrower shall employ consultants and the following resident Specialists: a recurrent budget specialist, a public debt specialist, a forestry adviser, a diamond exploration specialist, a diamond appraiser, a macro-economist, an investment budget specialist, a projects economist, a public enterprise specialist and a legal adviser, as well as short-term consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. 2. Such Specialists and consultants shall be selected in accor- dance with principles and procedures satisfactory to the Associa- tion 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. - 14 - SCHEDULE 4 Special Account 1. For the purposes of this Schedule: (a) the term "Category" means a category of items to be financed out of the proceeds of the Credit as set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (b) the term "eligible expenditures" means expenditures 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 allocated from time to time to Categories (2) - (10) in accor- dance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount in CFAF equivalent to the amount allocated to Category (11) which is to be withdrawn from the Credit Account and deposited in the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Payments out of the Special Account shall be made exclu- sively for eligible expenditures in accordance with the provi- sions of this Schedule. 3. After the Association has received evidence satisfactory to the Association that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent with- drawals to replenish the Special Account may be made as follows: (a) On the basis of a request or requests by the Borrower for a deposit or deposits which add up to the aggregate amount of the Authorized Allocation, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit in the Special Account such amount or amounts as the Borrower shall have requested. (b) The Borrower shall furnish to the Association requests for replenishment of the Special Account at such intervals as the Association shall specify. On the basis of such requests, the Association shall withdraw from the Credit Account and deposit into the Special Account such amounts as shall be required to replenish the Special Account with amounts not exceeding the amount of payments made out of the Special Account for eligible expenditures. Except as the Association may otherwise agree, each - 15 - such deposit shall be withdrawn by the Association from the Credit Account under Categories (2) - (10), and in the respective equivalent amounts, as shall have been justified by the evidence supporting the request for such deposit furnished pursuant to paragraph 4 of this Schedule. 4. For each payment made by the Borrower out of the Special Account for which the Borrower requests replenishment pursuant to paragraph 3 (b) of this Schedule, the Borrower shall furnish to the Association, prior to or at the time of such request, such documents and other evidence as the Association shall reasonably request, showing that such payment was made for eligible expen- ditures. 5. (a) Notwithstanding the provisions of paragraph 3 of this Schedule, no further deposit into the Special Account shall be made by the Association when either of the following situations first arises: (i) the Association shall have determined that all further withdrawals can be made directly by the Borrower from the Credit Account in accordance with the provisions of paragraph (a) of Section 2.02 of this Agreement; or (ii) unless otherwise agreed by the Association, when the total unwithdrawn amount of the Credit allo- cated to Categories (2) - (10) for the Project, minus the amount of any outstanding qualified agreement to reimburse made by the Association and of any outstanding special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions with respect to the Project, shall be equal to the equivalent of twice the amount of the Authorized Allocation. (b) Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to Cate- gories (2) - (10) for the Project shall follow such procedures as the Association shall specify by notice to the Borrower. Except as the Association shall otherwise agree, such further with- drawals shall be made only after and to the extent that the Asso- ciation shall have been satisfied that all such amounts remaining on deposit in the Special Account as of the date of such notice have been or will be utilit;ed in making payments for eligible expenditures. - 16 - 6. (a) If the Association shall have determined at any time that any payment out of the Special Account: (i) was made for any expenditure or in any amount not eligible pursuant to paragraph 2 of this Schedu,e, or (ii) was not justified by the evidence furnished pursuant to paragraph 4 of this Schedule, the Borrower shall, promptly upon notice from the Association, deposit into the Special Account (or, if the Association shall so request, refund to the Association) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. Unless otherwise agreed by the Association, no further deposit by the Association into the Special Account shall be made until the Borrower has made such deposit or refund. (b) If the Association shall have determined at any time that any amount outstanding in the Special Account will not be required to cover further payments for eligible expenditures, the 'Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. 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 1 1983 FOR SECRETARY