Conformed Copy - C2066 - Economic and financial Management T.A. Project - Development Credit Agreement

DOCUMENTS| CREDIT NUMBER 2066 )OZ Development Credit Agreement (Econoaic and Financial Manag.eent Technical Assistance Project)' between PEOP1E'S REPUBLIC OF NOZAMBIQUE and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated ,198 -  CREDIT NUMBER 2066 MOZ DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated Avzervl , J , 1989, between PEOPLE'S REPUBLIC OF MOZAMBIQUE (the Borrower) and INTERNATIONAL DEVELOPHENT ASSOCIATION (the Association). WHEREAS the Borrower, having satisfied itself as to the feasibility and priority of the Project deseribed in Schedule 2 to this Agreement, has requested the Association to assist in the financing of the Project; 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 OGeneral 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 Condi- tions) 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 term: (a) "BOMH means Banco de Mocambiiue, the Central Bank of the Borrower; (b). "MOF" means the Ministry.of Finance of the Borrower; (c) "Special Account A" and "Special Account B" mean the accounts referred to in Section 2.02 (b) of this Agreement; (d) "Profect Preparation Advance" means the project prepara- tion advancas granted by the Association to the Borrower pursuant 9 3  - 2- to an exchange of letters dated August 9, 1986, and November 7, 1986; and March 10, 1989 and April 21, 1989 between the Borrower and the Association; (e) 'Central Technical Project Unit' or 'CTPU" means the unit established within the National Budget Directorate of MOF as set forth in paragraph 4 of Schedule 6 to this Agreement; and (f) "fiscal year" or "FYI means the Borrower's fiscal year which runs from January 1 to December 31. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an am*ut-Ain_-v%r1Dus, currencies equivalent to sixteen million five hundrerd hthauman4 Spec.ial Drawing Rights (SDR 16,500,000). Section 2.02. (a) The amount o' 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 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 dollars two special accounts in a commercial bank on terms and conditions satisfactory to the Association: (i) Special Account A shall be opened for the purposes of Parts A; C (1) (a); C (2) (a); and C (3) (a) of the Project; and (ii) Special Account B shall be opened for the purposes of Parts B; C (1) (b); C (2) (b); and C (3) (b) of the Project. Deposits into, and payments out of, Special Accounts A and B shall be made in accordance with the Rrovisions of Schedule 4 and 5, respectively, to this Agreement.  -3- (c) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and pay to itself the amount required to repay the principal amount of the Project Preparation Advance withdrawn and outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advance shall thereupon be cancelled. Section 2.03. The Closing Date shall be December 31, 1997 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.04. (a) The Borrower shall pay to the Association a commitment charge on the principal amount of the Credit not withdrawn from time to time at a rate to be set by the Association as of June 30 of each year, but not te exceed the rate of one-half of one percent (1/2 of 1X) per annum. (b) The commitment charge shall accru& -(tQ--frou kh dats C sixty days after the date of this Agreement (tbe accxuVldazte) to the respective dates. on which amounts shall .e vwtai@ftf b;v the Borrower from the Credit Account or cancelled; (ii) at the rate set as of the June 30 itmediately preceding the accrual date or at such other rates as may be set from time to time thereafter pursuant to paragraph (a) above. The rate set as of June 30 in each year shall be applied from the next date in that year specified in Section 2.06 of this Agreement. (c) 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 1X) 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 Harch 15 and September 15 in each year. 9 - . -  -4 Section 2.07. (a) Subject to paragraphs (b) and (c) below, the Borrower shall repay the principal amount of the Credit in semiannual installments payable on each March 15 and September 15, commencing March 15, 2000 and ending September 15, 2029. Each installnert to and including the itistallment payable on September 15, 2009 shall be one percent (11) of such principal amount, and each installment thereafter shall be two percent (2X) 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 consi- deration by then 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- Is