Senegal - Third Structural Adjustment Credit : Credit 1802 - Swiss Grant Agreement - Conformed

OFF\CAL DOCUMENTD SWISS GRANT RELATED TO CREDIT NUMBER 1802 SE Swiss Grant Agreement (Third Structural Adjustnent Credit) between REPUBLIC OF SENEGAL and INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the Swiss Funds within the framework of the SPECIAL FACILITY FOR SUB-SAHARAN AFRICA Dated / , 1987 SWISS GRANT RELATED TO CREDIT NUMBER 1802 SE SWISS GRANT AGREEMENT AGREEMENT dated / , 1987, between the REPUBLIC OF SENEGAL (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the Swiss funds within the frame- work of the SPECIAL FACILITY FOR SUB-SAHARAN AFRICA (the Admin- istrator). WHEREAS (A) the Executive Directors of the International Development Association (IDA) have established by their Resolu- tion No. IDA 85-1 of May 21, 1985, (the Resolution), a Special Facility for Sub-Saharan Africa (the African Facility) consti- tuted by the funds which shall be contributed by the Interna- tional Bank for Reconstruction and Development (the Bank) and other donors and administered by IDA, acting as Administrator of the African Facility, for the purpose of, and in accordance with, the provisions of the Resolution; (B) pursuant to Section F of the Resolution, the Government of Switzerland (Switzerland) has agreed to provide Swiss funds in the form of grants in support of programs of structural change, policy reform and institutional improvement in countries which are eligible for financing from the African Facility's resources; (C) by an Arrangement dated September 11, 1985 (the Arrangement), Switzerland has requested IDA, and IDA has accept- ed, to act as Administrator of the Swiss funds (the Administra- tor) in accordance with the provisions of the Arrangement; (D) the Administrator has received a letter dated April 16, 1987 from the Borrower describing a program of actions, objec- tives and policies designed to achieve structural adjustment of the Borrower's economy (hereinafter called the Program), declar- ing the Borrower's commitment to the execution of the Program, and requesting assistance from the Administrator in the financ- ing of urgently needed imports required during such execution; (E) the Borrower has requested Swiss funds from the Admin- istrator, to provide additional assistance in support of the Program, and the Administrator has determined that the provision -2- of such funds (the Swiss Grant) would be in accordance with the provisions of the Resolution and the Arrangement; (F) the Borrower has also requested IDA as Administrator of the African Facility to provide additional 'asistance towards the financing of the Program, and by an agreement of even date herewith between the Borrower and said Administrator (the African Facility Credit Agreement), said Administrator is agreeing to provide such assistance in an aggregate principal amount of thirty-one million one hundred thousand Special Drawing Rights (SDR 31,100,000) (the African Facility Credit); (G) the Borrower has also requested IDA to provide addi- tional assistance towards the financing of the Program and by an agreement of even date herewith between the Borrower and IDA (the Development Credit Agreement), IDA is agreeing to provide such assistance in an aggregate principal amount equivalent to thirty-five million Special Drawing Rights (SDR 35,000,000) (the IDA Credit); (H) the Borrower and the Administrator intend, to the extent practicable, that the proceeds of the Swiss Grant be dis- bursed on account of expenditures in respect of the Program, before disbursements of the proceeds of the African Facility Credit and the IDA Credit are made; and WHEREAS the Administrator has agreed on the basis inter alia of the foregoing, to extend the Swiss Grant to the Borrower in three tranches 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 International Development Associa- tion, dated January 1, 1985, with the modifications set forth below (the General Conditions) constitute an integral part of this Agreement: (a) the term "Association", when used in the General Condi- tions, means the International Deuelopment Association acting as -3- Administrator of the Swiss funds, except in the phrase "member of the Administrator" in Sections 2.01 (5), 4.02 (b) and 6.02 (e) thereof; (b) the terms "Development Credit Agreement", "Credit" and "Credit Account", when used in the General Conditions, are amend- ed to read "Swiss Grant Agreement", "Swiss Grant" and "Swiss Grant Account", respectively; (c) Section 2.01, paragraph 9, shall be modified to read: "'Project' means the imports and other activities that may be financed out of the proceeds of the Swiss Grant pur- suant to the provisions of Schedule 1 to the Swiss Grant Agreement."; (d) the last sentence of Section 3.02 is deleted; (e) the second sentence of Section 5.01 is deleted; (f) in Sections 6.02 and 7.01, the term "Association" shall also include the International Development Association acting in its own capacity; and (g) Section 9.06 (c) shall be modified to read: "(c) Not later than six months after the Closing Date or such later date as may be agreed for this purpose between the Borrower and the Administrator, the Borrower shall pre- pare and furnish to the Administrator a report, of such scope and in such detail as the Administrator shall reason- ably request, on the execution of the program referred to in the Preamble to the Swiss Grant Agreement, the performance by the Borrower and the Administrator of their respective obligations under the Swiss Grant Agreement and the accom- plishment of the purposes of the Swiss Grant." Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions and in the Pre- amble to this Agreement have the respective meanings therein set forth and the following additional terms have the following mean- ings: (a) "Part II member of IDA" means a member of IDA with res- pect to which the terms and conditions of membership are those -4- prescribed in the Articles of Agreement of IDA for countries whose names are listed in Part II of Schedule A to those Arti- cles; (b) "SITC" means the United Nations Standard International Trade Classification, 1974 Revision (SITC, Rev. 2), published in Commodity Indexes for the Standard International Trade Classifi- cation, Revised, Statistical Papers, Series M, No. 38/Rev.2 (1981); (c) "CFAF" means the currency of the Borrower; (d) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement; and (e) "Central Bank" means the Banque Centrale des Etats de l'Afrique de l'Ouest. ARTICLE II The Swiss Grant Section 2.01. The Administrator agrees to extend a non-reim- bursable contribution to the Borrower on the terms and conditions set forth or referred to in this Agreement, in an amount in various currencies equivalent to twelve million Swiss Francs (SwF 12,000,000). Section 2.02. (a) The amount of the Swiss Grant may be with- drawn from the Swiss Grant Account in accordance with the provi- sions of Schedule 1 to this Agreement. (b) Withdrawals shall be made only on account of expendi- tures for goods produced in, or services supplied from, the territories of: (i) any Part II member of IDA; or (ii) any coun- try designated by the Administrator as meeting the provisions set forth in paragraphs 4 (f) (ii) and (iii) of the Resolution. (c) The Borrower shall, for the purposes of the Program, open and maintain in CFAF a special account in the Central Bank on terms and conditions satisfactory to the Administrator. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 3 to this Agreement. -5 - Section 2.03. The Closing Date shall be December 31, 1988 or such later date as the Administrator shall establish. The Admin- istrator shall promptly notify the Borrower of such later date. Section 2.04. (a) The National Director for Senegal of the Central Bank 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 Condition8. (b) Without limitation or restriction to the foregoing, the Borrower hereby entrusts the Central Bank with responsibility for the preparation of withdrawal applications under the Swiss Grant and for the collection of the documents and other evidence to be furnished to the Administrator in support of such applications; such withdrawal applications shall to the extent practicable be consolidated so as to apply for withdrawal of aggregate amounts of not less than CFAF 300,000,000 equivalent. ARTICLE III Particular Covenants Section 3.01. (a) The Borrower and the Administrator shall from time to time, at the request of either party, exchange views on the progress achieved in carrying out the Program and the Borrower's arrangements to monitor such progress. (b) Prior to each such exchange of views, the Borrower shall furnish to the Administrator for its review and comment a report on the progress achieved in carrying out the Program, in such detail as the Administrator shall reasonably request. Section 3.02. Except as the Administrator shall otherwise agree, procurement of the goods to be financed out of the pro- ceeds of the Swiss Grant shall be governed by the provisions of Schedule 2 to this Agreement, subject to the eligibility restric- tions set forth in Section 2.02 (b) of this Agreement. Section 3.03. (a) The Borrower shall maintain or cause to be maintained records and accounts adequate to reflect in accor- dance with consistently maintained sound accounting practices the expenditures financed out of the proceeds of the Swiss Grant. -6- (b) The Borrower shall: (i) have the records and accounts referred to in para- graph (a) of this Section including the Special Account for each fiscal year audited, in accor- dance with appropriate auditing principles consis- tently applied, by independent auditors acceptable to the Administrator; (ii) furnish to the Administrator as soon as available, but in any case not later than four months after the end of each such y'ear, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Administrator shall have reasonably requested; and (iii) furnish to the Administrator such other informa- tion concerning said accounts and the audit there- of as the Administrator shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Swiss Grant Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Adminis- trator has received the audit report for the fiscal year in which the last withdrawal from the Swiss Grant Account was made, all records (con- tracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Administrator's representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audits referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditures submitted during such fiscal year, together with the proce- -7- dures and internal controls involved in their pre- paration, can be relied upon to support the relat- ed withdrawals. ARTICLE IV Additional Event of Suspension Section 4.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional events are specified: (a) that an event has occurred which shall make it improb- able that the Program, or a significant part thereof, will be carried out; and (b) (i) Subject to subparagraph (ii) of this paragraph: (A) The right of the Borrower to withdraw the proceeds of any grant, loan or credit made to the Borrower for the financing of the Pro- gram shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing there- for, or (B) any such loan or 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 Administrator 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 Program are available to the Borrower from other sources on terms and conditions consistent with the obligations of the Borrower under this Agreement. ARTICLE V Effective Date; Termination; Designation of Administrator Section 5.01. The following event is specified as an addi- tional condition to the effectiveness of this Agreement, within -8- the mcaning of Section 12.01 (b) of the General Conditions, namely, that all conditions precedent to the effectiveness of the Development Credit Agreement and the African Facility Credit Agreement have been fulfilled. Section 5.02. The date sixty (60) days after the date of this Agreement is hereby specified fcr the purposes of Sec- tion 12.04 of the General Conditions. Section 5.03. In the event that Switzerland or IDA decide to terminate the functions of IDA as Administrator, pursuant to paragraph 5 of the Arrangement, the Administrator shall notify the Borrower promptly of the date on which Switzerland shall assume the rights and obligations of the Administrator under this Agreement. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. Subject to the provisions in Section 2.04 of this Agreement, the Borrower's Minister responsible for Finance and Secretary of State to said Minister are designated as repre- sentative 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: Miistere de 1'Economie et des Finances Rue Charles Laine B.P. 4017 Dakar Republique du Sen&gal Cable address: Telex: MINIFINANCES 3203 SG Dakar, Senegal -9- For the Administrator: Administrator of the Swiss Funds (International Development Administrator) 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. REPUBLIC OF SENEGAL By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the Swiss Funds within the framework of the SPECIAL FACILITY FOR SUB-SAHARAN AFRICA By /4 & V 1 Regional Vice President Africa - 10 - SCHEDULE 1 Withdrawal of the Proceeds of the Swiss Grant 1. Subject to the provisions set forth or referred to in this Schedule, the proceeds of the Swiss Grant may be withdrawn from the Swiss Grant Account for expenditures made (or, if the Admin- istrator shall so agree, to be made) in respect of the reasonable cost of goods required during the execution of the Program and to be financed out of such proceeds. 2. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) expenditures for goods included in the following SITC groups or sub-groups: Group Sub-group Description of Items 112 - Alcoholic beverages 121 - Tobacco, unmanufactured tobacco refuse 122 - Tobacco, manufactured 667 - Pearls, precious and semi- precious stones, unworked or worked 688 - Uranium depleted in U235 and thorium, and their alloys, unwrought or wrought, and articles therefor, n.e.s.; waste and scrap of uranium depleted in U235 and of thorium 718 718.7 Nuclear reactors, and parts thereof, n.e.s. - 11 - Group Sub-group Description of Items 897 897.3 Jewelry of gold, silver or platinum group metals (except watches and watch cases) and goldsmiths' or silversmiths' wares (including set gems) - 971.0 Gold, non-monetary (excluding gold ores and concentrates) (b) expenditures in the currency of the Borrower or for goods supplied from the territory of the Borrower; provided, how- ever, that if the currency of the Borrower is also that of another country from the territory of which goods are supplied, expenditures in such currency for such goods shall be eligible for financing out of the proceeds of the Swiss Grant; (c) expenditures for goods procured under contracts costing less than $10,000 equivalent; (d) expenditures for goods supplied under a contract which any national or international financing institution or agency other than the Administrator shall have financed or agreed to finance; (e) expenditures for goods intended for a military or para- military purpose or for luxury consumption; and (f) expenditures for fuel or foodstuffs. 3. No withdrawal shall be made and no commitment shall be entered into to pay amounts to the Borrower or others in respect of expenditures to be financed out of the proceeds of the Swiss Grant after the aggregate of the proceeds of the Swiss Grant withdrawn from the Swiss Grant Account and the total amount of such commitments shall have reached the equivalent of four million Swiss Francs (SwF 4,000,000) and eight million Swiss Francs (SwF 8,000,000), respectively, unless the Administrator shall be satisfied in each case, after an exchange of views as described in Section 3.01 of this Agreement, with the progress achieved by the Borrower in the carrying out of the Program. - 12 - SCHIEDULE 2 Procurement 1. Except as provided in paragraph 3 of this Schedule and sub- ject to the eligibility restrictions set forth in Section 2.02 (b) of this Agreement, contracts for the procurement of goods shall be awarded through international competitive bidding in accordance with procedures consistent with those set forth in Sections I and II of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1985 (the Guidelines), subject to the following modifications: (a) Paragraph 2.8 of the Guidelines is deleted and the fol- lowing is substituted therefor: "2.8 Notification and Advertising The international community should be notified in a timely manner of the opportunity to bid. This will be done by advertising invitations to apply for inclusion in a bid- der's invitation list, to apply for prequalification, or to bid; such advertisements should be placed in at least one newspaper of general circulation in the Borrower's country and, in addition, in at least one of the following forms: (i) a notice in the Uniced Nations publication, Devel- opment Forum, Business Edition; or (ii) an advertisement in a newspaper, periodical or technical journal of wide international circula- tion; or (iii) a notice to local representatives of countries and territories eligible pursuant to Section 2.02 (b) of this Agreement, that are potential suppliers of the goods required." (b) The following is added at the end of paragraph 2.21 of the Guidelines: "As a further alternative, bidding documents may re- quire the bidder to state the bid price in a single currency widely used in international trade and specified in the bidding documents." - 13 (c) Paragraphs 2.55 and 2.56 of the Guidelines are deleted. (d) All references in the Guidelines to the Bank and to loans shall be deemed to be references to the Administrator and to the Swiss Grant, respectively. 2. The above-mentioned eligibility restrictions shall be stated in the tender or prequalification documents for the procurement of goods pursuant to paragraph 1 of this Schedule. 3. (a) Contracts to be procured by private entities shall be awarded on the basis of the normal procurement procedures of the purchaser of such goods. (b) Contracts for goods to be procured by the Borrower, its political subdivisions or state-owned enterprises, estimated to cost the equivalent of less than $1,000,000 each shall be awarded on the basis of the normal procurement procedures of the pur- chaser of such goods, such procedures to be satisfactory to the Association. 4. With respect to each contract referred to in paragraph 1 of this Schedule, the Borrower shall furnish to the Administrator, prior to the submission to the Administrator of the first appli- cation for withdrawal of funds from the Swiss Grant Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids and recommenda- tions for award, a description of the advertising and tendering procedures followed and such other information as the Administra- tor shall reasonably request. 5. With respect to each contract referred to in paragraph 3 of this Schedule, the Borrower shall furnish to the Administrator, prior to the submission to the Administrator of the first appli- cation for withdrawal of funds from the Swiss Grant Account in respect thereof, such documentation and information as the Admin- istrator may reasonably request to support withdrawal applica- tions in respect of such contract. 6. Notwithstanding the provisions of paragraphs 4 and 5 of this Schedule, where payments under a contract are to be made out of the proceeds of the Special Account, the copies of such contract or the documentation and the information to be furnished to the Administrator pursuant to the provisions of paragraph 4 or para- - 14 - graph 5 of this Schedule, as the case may be, shall be furnished to the Administrator as part of the evidence required under para- graph 4 of Schedule 3 to this Agreement. 7. The provisions of the preceding paragraphs 4, 5 and 6 shall not apply to contracts on account of which the Administrator has authorized withdrawals from the Swiss Grant Account on the basis of statements of expenditure. Such contracts shall be retained in accordance with Section 3.04 (c) (ii) of this Agreement. - 15 - SCHEDULE 3 Special Account 1. For the purposes of this Schedule: (a) the term "eligible expenditures" means expenditures in respect of the reasonable cost of goods required during the exe- cution of the Program and to be financed out of the proceeds of the Swiss Grant in accordance with the provisions of Schedule 1 to this Agreement; and (b) the term "Authorized Allocation" means an amount equi- valent to SwF 1,300,000 to be withdrawn from the Swiss Grant Account and deposited in the Special Account pursuant to para- graph 3 (a) of this Schedule. 2. Except as the Administrator shall otherwise agree, payments out of the Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Administrator has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to reple- nish 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 Administrator shall, on behalf of the Borrower, withdraw from the Swiss Grant Account and deposit in the Special Account such amount or amounts as the Borrower shall have requested. (b) The Borrower shall furnish to the Administrator re- quests for replenishment of the Special Account at such intervals as the Administrator shall specify. On the basis of such re- quests, the Administrator shall withdraw from the Swiss Grant 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. Each such deposit shall be withdrawn by the Administrator from the Swiss Grant Account 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. - 16 - 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 Administrator, prior to or at the time of such request, such documents and other evidence as the Administrator shall reason- ably request, showing that such payment was made for eligible expenditures. 5. (a) Notwithstanding the provisions of paragraph 3 of this Schedule, no further deposit into the Special Account shall be made by the Administrator when either of the following situations first arises: (i) the Administrator shall have determined that all further withdrawals can be made directly by the Borrower from the Swiss Grant Account in accord- ance with the provisions of paragraph (a) of Sec- tion 2.02 of this Agreement; or (ii) the total unwithdrawn amount of the Swiss Grant, minus the amount of any outstanding agreement to reimburse made by the Administrator and of any special commitment entered into by the Administra- tor pursuant to Section 5.02 of the General Condi- tions with respect to the Program, shall be equal to the equivalent of twice the amount of the Authorized Allocation. (b) Thereafter, withdrawal from the Swiss Grant Account of the remaining unwithdrawn amount of the Swiss Grant shall follow such procedures as the Administrator shall specify by notice to the Borrower. Such further withdrawals shall be made only after and to the extent that the Administrator shall have been satis- fied that all such amounts remaining on deposit in the Special Account as of the date of such notice have been or will be uti- lized in making payments for eligible expenditures. 6. (a) If the Administrator 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 Schedule, or (ii) was not justified by the evidence fur- nished pursuant to paragraph 4 of this Schedule, the Borrower shall, promptly upon notice from the Administrator, deposit into the Special Account (or, if the Administrator shall so request, - 17 - refund t.o the Adm'nistrator) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. No further deposit by the Administrator into the Special Account shall be made until the Borrower has made such deposit or refund. (b) If the Administrator 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 Administrator, refund to the Administrator such outstanding amount for crediting to the Swiss Grant Account. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Development Association. FOR SECRETARY