Haiti - Economic Recovery Program Credit : Credit 1766 - Credit Agreement - Conformed

OFFICIAL DOCUMENTS CREDIT NUMBER/740LHA Development Credit Agreement (Economic Recovery Program Credit) between REPUBLIC OF HAITI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated W 7 , 1987 CREDIT NUMBER /744HA DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated 24ooAg 2L7 , 1987, between REPUBLIC OF HAITI (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS (A) the Association has received a letter dated January 30, 1987 from the Borrower describing a program of actions, objectives and policies designed to achieve a recovery of the Borrower's economy (hereinafter called the Program), declaring the Borrower's commitment to the execution of the Program, and requesting assistance from the Association in the financing of urgently needed imports required during such execution; (B) on the basis, inter alia, of the foregoing, the Asso- ciation has decided in support of the Program to provide such assistance to the Borrower by making the Credit in two tranches as hereinafter provided; 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 modifications thereof set forth below (the General Conditions) constitute an integral part of this Agreement: (a) 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 Credit pursuant to the provisions of Schedule 1 to the Development Credit Agreement."; (b) Section 9.06 (c) shall be modified to read: "(c) Not later than six months after the Closing Date or such later date as m8y be agreed for this purpose between the Borrower and the Association, the Borrower shall prepare and furnish to the Association a report, of such scope and in such detail as the Association shall reasonably request, on the execution of the Program referred to in the Preamble -2- to the Development Credit Agreement, the performance by the Borrower and the Association of their respective obligations under the Development Credit Agreement and the accomplish- ment of the purposes of the Credit."; and (c) the last sentence of Section 3.02 is deleted. 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) "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); (b) "Gourde" or "G" means the currency of the Borrower; (c) "Tariff Law" means the Decree setting forth the applic- able import tariffs published in Le Moniteur on February 12, 1987; and (d) "Fiscal Year" means the Borrower's fiscal year commencing on October 1 and ending on September 30. 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 thirty-two million eight hundred thousand Special Drawing Rights (SDR 32,800,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement. Section 2.03. The Closing Date shall be June 30, 1988 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. -3- 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 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 and service charges shall be payable semiannually on April 15 and October 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each April 15 and October 15 commencing April 15, 1997, and ending October 15, 2036. Each installment to and including the installment payable on October 15, 2006, shall be one-half of one percent (1/2 of 1%) of such principal amount, and each installment thereafter shall be one and one-half percent (1-1/2%) of such principal amount. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Particular Covenants Section 3.01. (a) The Borrower and the Association shall, at the request of either party, and in any event no later than September 30, 1987, exchange views on the progress achieved in carrying out the Program and the actions specified in Schedule 3 to this Agreement. -4- (b) Prior to each such exchange of views, the Borrower shall furnish to the Association for its review and comment a report on the progress achieved in carrying out the Program, in such detail as the Association shall reasonably request. Section 3.02. Except as the Association shall otherwise agree, procurement of the goods to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 2 to this Agreement. Section 3.03. The Borrower shall, in the Ever.t that it undertakes to carry out any improvements in its Jap Haitien Airport (other than those included in the 1987-91 Investment Program as defined in the Development Credit Agreement between the Borrower and the Association for Credit Number 1756-HA (Seventh Transport Project) dated February 12, 1987: (i" restrict such improvements, in each Fiscal Year, to those that can be financed exclusively out of one-third of the amounts collected by the Borrower in previous Fiscal Years (commencing with Fiscal Year 1985) from its air passenger departure tax; and (ii) not apply the proceeds of any indebtedness in foreign currency to the financing of such improvements. The provisions of this Section supersede those of Section 3.06 of the Development Credit Agreement for Credit Number 1756-HA mentioned in the first paragraph of this Section. Section 3.04. (a) The Borrower shall maintain or cause to be maintained separate records and accounts adequate to reflect in accordance with consistently maintained sound accounting practices the expenditures financed out of the proceeds of the Credit. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a) of this Section for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (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; and -5- (iii) furnish to the Association such other information concerning said records and accounts and the audit thereof as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit 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, separate records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association'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 expenditure submitted during such fiscal year, together with the proce- dures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. ARTICLE IV Additional Event of Suspension Section 4.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional event 1s specified, namely, that an event has occurred which shall make it improbable that the Program, or a significant part thereof, will be carried out. -6- ARTICLE V Effective Date; Termination Section 5.01. The date e..o 3,0 1117 is hereby specified for the purposes of Section 12.04 of the General Conditions. -7- ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The' Minister of Economy and Finance of the Borrower 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: Ministere de l'Economie et des Finances Palais des Ministeres Port-au-Prince Haiti Cable address: Telex: Ministere de l'Economie 3090347 et des Finances Port-au-Prince For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America 'able address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) -8- 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 HAITI By /5 Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By &*41 Regional Vice President Latin America and the Caribbean -9- SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. Subject to the provisions set forth or referred to in this S.hedule, the proceeds of the Credit may be withdrawn from the Credit Account for expenditures made (or, if the Association 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. - 10 - 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; (c) payments made for expenditures prior to the date of this Agreement, except that withdrawals in an aggregate amount not exceeding the equivalent of SDR 16,400,000 may be made on account of payments made for such expenditures before that date but after November 1, 1986; (d) expenditures for goods procured under contracts costing less than $10,000 equivalent; (e) expenditures for goods supplied under a contract which any national or international financing institution or agency other than the Association shall have financed or agreed to finance; and (f) expenditures for goods intended for a military or para-military purpose or for luxury consumption. 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 Credit after the aggregate of the proceeds of the Credit withdrawn from the Credit Account and the total amount of such commitments shall have reached the equivalent of SDR 16,400,000, unless the Association shall be satisfied, after an exchange of views as described in Section 3.01 of this Agreement: (a) with the progress achieved by the Borrower in the carrying out of the Program, and (b) that the actions described in Schedule 3 to this Agreement have been taken. - 11 - 4. In the event that the actions specified in Schedule 3 of this agreement have not been taken by December 31, 1987, any amount of the Credit which shall remain undisbursed as of such date shall, unless otherwise agreed by the Association, be cancelled. - 12 - SCHEDULE 2 Procurement 1. Except as provided in paragraph 3 below, contracts for the procurement of goods estimated to cost the equivalent of $3,000,000 or more each 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 following 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 bidder'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 United Nations publication, Development 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 referred to in the Guidelines, 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 require 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. 2. Goods or groups of goods estimated to cost less than the equivalent of $3,000,000 per contract may be procured under contracts awarded: (i) in the case of imports by the public sector, on the basis of comparison of price quotations solicited from a list of at least three suppliers eligible under the Guidelines, in accordance with procedures acceptable to the Association; and (ii) in the case of imports by the private sector, on the basis of the normal procurement procedures of the purchaser of such goods. 3. Contracts for petroleum and petroleum products shall be awarded either through bilateral arrangements based on prevailing market prices of such commodity or products, or on the spot market, through direct negotiations in accordance with normal practices. 4. With respect to each contract referred to in paragraph 1 of this Schedule, the Borrower shall furnish to the Association, prior to the submission to the Association of the first applica- tion for withdrawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids and recommendations for award, a description of the advertising and tendering procedures followed and such other information as the Association shall reasonably request. 5. With respect to each contract referred to in paragraph 2 and 3 of this Schedule, the Borrower shall furnish to the Association, prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect thereof, such documentation and information as the Association may reasonably request to support withdrawal applications in respect of such contract. 6. The provisions of the preceding paragraphs 4 and 5 shall not apply to contracts on account of which the Association has authorized withdrawals from the Credit Account on the basis of statements of expenditure. - 14 - SCHEDULE 3 Actions Referred to in Paragraph 3 (b) of Schedule 1 to this Agreement (a) The Borrower and the Association shall have agreed upon: (i) a satisfactory development budget and investment program of the Borrower for Fiscal Year 1988; and (ii) a satisfactory budget for the Borrower's Ministry of Education for Fiscal Year 1988. (b) The Borrower shall have furnished to the Association: (i) an audit of the expenditures actually made by its Ministry of Economy and Finance in Fiscal Year 1986 in respect of the expenditures budgeted for such Fiscal Year; and (ii) an audit of the financial position of its Banque de la Republique d'Haiti; such audits to be undertaken by auditors satisfactory to the Association. (c) The Borrower shall have reduced, in a manner and to an extent satisfactory to the Association, the operating costs of its enterprises Ciment d'Haiti and La Minoterie. (d) The Borrower shall have abrogated all taxes on imports and exports (other than the import tariffs included in the Tariff Law) for which collections in Fiscal Year 1986 did not exceed G 500,000 each. (e) The Borrower shall have eliminated the tax imposed on coffee exports. (f) The Borrower shall have: (i) established an agricultural credit bank satisfactory to the Association; and (ii) dissolved its Banque Nationale de Developpement Agricole et Industriel. (g) (i) The Borrower and the Association shall have agreed upon a satisfactory program designed to raise the Borrower's fiscal revenues by raising the current rents charged for the lease of state-owned lands; and (ii) the Borrower shall have made progress, satisfactory to the Association, in the implementation of such program. 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