Senegal - Irrigation Iv Project : Credit 1855 - Credit Agreement - Conformed

OFFICAL .nno i MFNUT S CREDIT NUMBER 1855 SE Development Credit Agreement (Irrigation IV Project) between REPUBLIC OF SENEGAL and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1988 CREDIT NUMBER 1855 SE DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated * KL k 50 , 1988, between REPUBLIC OF SENEGAL (the BorrowLr) 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 Project will be carried out by Soci&t6 Nationale d'Am64agement et d'Exploitation des Terres du Delta du Fleuve S6nfgal et des Vallfes du Fleuve Sfnigal et de la Fal&m6 (SAED) and Caisse Nationale de CrAdit Agricole du S&n6gal (CNCAS) with the Borrower's assistance and, as part of such assistance, the Borrower will make available to SAED and CNCAS the proceeds of the Credit as provided in this Agreement; and (C) the Borrower intends to contract from the Federal Republic of Germany (Kreditanstalt fUr Wiederaufbau, KfW), Banque Arabe de Developpement Economique en Afrique (BADEA), the Min- istry of Cooperation of the French Republic (MC) and Caisse Centrale de Coopgration Economique (CCCE) loans and grants in a total amount equivalent to approximately twenty-seven million dollars to assist in financing the Project on the terms apd conditions set forth in the respective loan and grant agreements (the Financing Agreements) to be entered into between the Borrower and each of the aforementioned entities. 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 and in the Project Agreement of even date herewith between the Association and SAED and CNCAS; 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, with the last sentence of Section 3.02 deleted (the General Conditions) constitute an integral part of this Agreement. -2- 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) "Project Agreement" means the agreement among the Association, SAED and CNCAS of even date herewith, as the same may be amended from time to time, and such term includes all schedules and agreements supplemental to the Project Agreement; (b) "Grant Agreement" means the agreement to be entered into between the Borrower and SAED pursuant to Section 3.01 (c) (i) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Grant Agreement; (c) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and CNCAS pursuant to Section 3.01 (c) (ii) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreement; (d) "Special Accounts" means the accounts referred to in Section 2.02 (b) of this Agreement; (e) "SAED" means Soci6tg Nationale d'Amfnagement et d'Exploitation des Terres du Delta du Fleuve Sfnfgal et des Vall6es du Fleuve S6n6gal et de la FalAmg, a "Sociftf nationale" of the Borrower established pursuant to Law No. 81-57, dated July 10, 1981; (f) "Lettre de Mission" means the contract between the Bor- rower and SAED defining SAED's objectives and policy for the period July 1, 1987 - June 30, 1990, as well as the Borrower's obligations towards SAED in pursuit of these objectives; (g) "ISRA" means the Institut Sfnfgalais de Recherches Agricoles, an Etablissement public A caractare industriel et commercial of the Borrower established pursuant to the Borrower's Law No. 74-53, dated November 4, 1974; (h) "CNCAS" means the Caisse Nationale de Crfdit Agricole du SgnOgal, a Sociftr d'Economie Mixte of the Borrower esta- blished pursuant to Law No. 77-89, dated August 10, 1977; -3- (i) "Protocol" means the agreement referred to in Section 2.05 of the Project Agreement; (j) "Project Area" means the Senegal River Delta area in the territory of the Borrower; (k) "CFAF" means the currencyu of the Borrower and other members of the West African Monetary Union; (1) "DCSR" means Direction de la Conservation des Sols et du Reboisement, a directorate within the Borrower's Ministry of Protection of Nature; (m) "CNAPTI" means Centre National d'Application et de Per- fectionnement aux Techniques de l'Irrigation, a division of SAED; (n) "DPD" means Direction de la Production et du D&veloppe- ment, a division of SAED; (o) "MEU" means Monitoring and Evaluation Unit referred to in Section 3.07 of this Agreement; (p) "DPA" means Direction de la Planification et des Am6nagements, a division of SAED; (q) "CREDO-SAHEL" means Centre de Recherche et de Documen- tation sur le Sahel, a non-governmental organization, established pursuant to its by-laws of October 1, 1984; (r) "Subsidiary Grant Agreement" means the agreement to be entered into between SAED and CREDO-SAHEL pursuant to Sec- tion 2.01 (b) of the Project Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Grant Agreement; (s) "GIE" means Groupement d'IntfrAt Economique, a farmers' association established to provide agricultural inputs and services to their individual members; (t) "Fiscal Year" means the Borrower's fiscal year which runs from July 1 to June 30; and (u) "Investment Criteria" means the criteria detailed in the Investment Guide referred to in Section 3.06 of this Agree- ment. -4- 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 twenty-six million two hundred thousand Special Drawing Rights (SDR 26,200,000). 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 for expenditures made (or, if the Association shall so agree, to be made) in respect of the reason- able cost of goods and services required for the Project and to be financed out of the proceeds of the Credit. (b) The Borrower shall open and maintain in CFAF in a com- mercial bank on terms and conditions satisfactory to the Associa- tion two special accounts: the first account to be in the name of SAED and for the purposes of Parts A, B, D, E, F, G, H and I cf the Project (the SAED Special Account) and the second account to be in the name of CNCAS and for the purposes of Part -C of the Project (the CNCAS Special Account). Deposits into* and payments out of, any of the Special Accounts shall be made in accordance with ,the provisions of Schedule 3 to this Agreement. Section 2.03. The Closing Date shall be June 30, 1994 or such later date as the Association shall establish. The Associa- tion shall promptly notify the Borrower, SAED and CNCAS 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 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 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 -5 - 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 percent (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 March 1 and September 1 in each year. Section 2.07. (a) Subject to paragraphs (b) and (c) below, the Borrower shall repay the principal amount of the Credit in semi-annual- installments payable on each March 1 and September 1,commencing March 1, 1998, and ending September 1, 2027. Each installment to and including the installment payable on September 1, 2007, shall be one percent (1%) of such principal amount, and each installment thereafter shall be two percent (2%) of such principal amount. (b) Whenever: (i) the Borrower's gross national product per capita, as determined by the Association, shall have exceeded $790 in constant 1985 dollars for five consecutive years; and (ii) the Bank shall consider the Borrower creditworthy for Bank lending, the Association may, subsequent to the review and approval thereof by the Executive Directors of the Association and after due consideration by them of the development of the Borrower's economy, modify the terms of repayment of installments under paragraph (a) above by requiring the Borrower to repay twice the amount of each such installment not yet due until the principal amount of the Credit shall have been repaid. If so requested by the Borrower, the Association may revise such modi- fication to include, in lieu of some or all of the increase in the amounts of such installments, the payment of interest at an annual rate agreed with the Association on the principal amount of the Credit withdrawn and outstanding from time to time, provided that, in the judgment of the Association, such revision shall not change the grant element obtained under the above- mentioned repayment modification. (c) If, at any time after a modification of terms pursuant to paragraph (b) above, the Association determines that the Borrower's economic condition has deteriorated significantly, the Association may, if so requested by the Borrower, further modify -6- the terms of repayment to conform to the schedule of installments as provided in paragraph (a) above. 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, without any limitation or restriction upon any of its other obligations under the Development Credit Agreement, shall cause SAED and CNCAS to perform in accordance with the provisions of the Project Agreement all their respec- tive 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 SAED and CNCAS to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) Without any limitation to the provisions of para- graph (a) above, the Borrower shall, during each Fiscal Year the Project is executed: (i) make sufficient budgetary allocations on the basis of the Lettre de Mission to cover the cost of public service activities carried out by SAED; and (ii) provide SAED,, on a regular basis, with the necessary funds required for such activities. (c) The Borrower shall: (I) make the proceeds of the Credit, which may from time to time be allocated to Categories (1) through (4) of the table set forth in Schedule 1 to this Agreement, available to SAED under a Grant Agreement to be entered into between the Borrower and SAED, under terms and conditions which shall have been approved by the Association; and (ii) relend the proceeds of the Credit, which may from time to time be allocated to Category (5) of the -7- table mentioned above, to CNCAS under a Subsidiary Loan Agreement to be entered into between the Borrower and CNCAS, under terms and conditions which shall have been approved by the Association and shall include: an interest rate of two percerft (2%) per annum; a 30-year repayment period and the Borrower shall bear the foreign exchange risk on such on-lending. (d) 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. (e) The Borrower shall take all steps necessary to cause ISRA and DCSR to cooperate with SAED in carrying out Parts G and H of the Project. Section 3.02. Except as the Association shall otherwise agree, procurement of the goods, works and consultants' services required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 1 to the Project Agreement. Section 3.03. The Borrower and the Association hereby agree that the obligations set forth in Sections 9.03, 9.04, 9.05, 9.06, 9.07 and 9.08 of the General Conditions (relating to insur- ance, use of goods and services, plans and schedules, recordscand reports, maintenance and land acquisition, respectively) shall be carried out by SAED and CNCAS pursuant to Section 2.03 of the Project Agreement. Section 3.04. The Borrower shall: (a) promptly implement the action plan for the disengagement of SAED from production-related activities as provided in the Lettre de Mission; (b) not later than September 30, 1988, furnish to the Association, for its review and comment, a report of progress achieved in the implementation of the disengagement plan referred to in paragraph (a) of this Section; and -8- (c) not later than September 30, 1990, furnish to the Asso- 81atio, a report of progress achieved in the implementation of th6 Project. Section 3.05. For the purposes of assisting in coordinating the implementation of the Project by SAED and CNCAS, the Borrower shall cause SAED to maintain at all times a Project Chief with qualifications and experience acceptable to the Association. Section 3.06. The Borrower shall: (a) by March 31, 1989, or any other date agreed upon with the Association, publish-amInvectment Guide, consistent with the principles set forth"in the Bol\rower's Letter of Development Policy, dated April 16, 1987, for appraising and implementing new irrigation investment proposals in the Senegal River region; and (b) ensure that SAED undertakes only irrigation projects which are technically, economically and financially justified in accordance with the provisions of the Investment Guide referred to in paragraph (a) above. Section 3.07. For the purposes of Part E.2 of the Project, the Borrower shall cause SAED to maintain MEU at all times with facilities, staff and other resources needed to discharge its responsibilities under the Project. Section 3.08. The Borrower shall take all measures requIred on its part to enable SAED and CNCAS to implement the recom- mendations resulting from the reviews referred to in Sections 2.10 and 2.11 (c), respectively, of the Project Agreement. ARTICLE IV Remedies of the Association Section 4.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional events are specified: (a) SAED and CNCAS shall have failed to perform any of their obligation3 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 SAED -9- and CNCAS will be able to perform their obligations under the Project Agreement; (c) Law No. 81-57 of July 10, 1981, and Law No. 77-89 of August 10, 1977, of the Borrower shall have been amended, sus- pended, abrogated, repealed or waived so as to affect materially and adversely the ability of SAED and CNCAS to perform any of their obligations under the Project Agreement; (d) 'the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of SAED and CNCAS or for the suspension of their operations; (e) (i) subject to subparagraph (ii) of this paragraph: (A) the right of the Borrower to withdraw the proceeds of any grant or loan made to the Borrower for the financing of the Project shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the respective Financing Agree- ment providing therefor; or (B) any such loan shall have become due and pay- able 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, cancellation, 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 sourcer, on terms and conditions consistent with the obliga- tions of the Borrower under this Agreement; (f) the Borrower or SAED, as the case may be, shall have failed to perform any of their respective obligations under the Lettre de Mission; and 0 - 10 - (g) the Lettre de Mission shall have been amended without prior consultation with the Association. Section 4.02. Pursuant to Section 7.01 (d) of the General Conditions, the following additional events are specified: (a) the events specified in paragraphs (a) or (f) or (g) 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; (b) the events specified in paragraphs (c), or (d) of Sec- tion 4.01 of this Agreement shall occur; and (c) any events specified in paragraph (e)(i) B of Section 4.01 of this Agreement shall occur, subject to the proviso of paragraph (e)(ii) of that Section. 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 Grant Agreement has been executed on behalf of the Borrower and SAED; (b) the Subsidiary Grant Agreement referred to in Sec- tion 2.01 (b) of the Project Agreement between SAED and CREDO- SAHEL has been executed on behalf of the parties thereto; (c) the Subsidiary Loan Agreement has been executed on behalf of the Borrower and CNCAS; (d) the Lettre de Mission has been duly signed by the parties thereto; (e) SAED shall have selected the Project Chief referred to in Section 3.05 of this Agreement; (f) a standard contract among SAED, GIEs and village sections for the services to be provided by SAED in return for - 11 - maintenance of infrastructure by such GIEs and village sections has been prepared; and (g) all conditions precedent to initial disbursement under the respective Financing Agreements, except for the KfW Financing Agreement and save for the effectiveness of this Agreement, have been fulfilled. 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 fur- nished to the Association: (a) that the Project Agreement has been duly authorized or ratified by SAED and CNCAS and is legally binding upon SAED and CNCAS in accordance with its terms; (b) that the Grant Agreement has been duly authorized or ratified by the Borrower and SAED and is legally binding upon the Borrower and SAED in accordance with its terms; and (c) that the Subsidiary Loan Agreement has been duly autho- rized or ratified by the Borrower and CNCAS and is legally bind- ing upon ';fte Borrower and CNCAS in accordance with its terms. Section 5.03. The date ninety (90) days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Representatives of the Borrower; Addresses Section 6.01. 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. - 12 - Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministare de l'Economie et des Finances Rue Charles Lainf B.P. 4012 Dakar Rdpublique du Sdn&gal Cable address: Telex: MINIFINANCES 3203 SG Dakar, Senegal 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) -13 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. REPUBLIC OF SENEGAL By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President Africa - 14 - 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 ex- penditures 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) Civil works (a) Boundoum 5,400,000 44% perimeter (b) Dagana A and B 4,700,000 60% perimeter (2) Equipment and 700,000 100% spare parts (3) Operating Costs 3,600,000 45% of SAED (4) Consultants and 1,400,000 100% Studies (5) (a) Short-term 7,000,000 85% Credit (b) operating 400,000 85% costs of CNCAS (6) Unallocated 3,000,000 TOTAL 26,200,000