Conformed Copy - C2448 - Social Safety Net Sector Adjustment Program - Netherlands Grant Agreement

Page 1 CONFORMED COPY NETHERLANDS GRANT RELATED TO CREDIT NUMBER 2448 IN Netherlands Grant Agreement (Social Safety Net Sector Adjustment Program) between INDIA and INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of Netherlands Funds provided by the MINISTER FOR DEVELOPMENT COOPERATION OF THE NETHERLANDS Dated December 17, 1992 NETHERLANDS GRANT RELATED TO CREDIT NUMBER 2448 IN NETHERLANDS GRANT AGREEMENT AGREEMENT, dated December 17, 1992, between INDIA (the "Grantee") and INTERNATIONAL DEVELOPMENT ASSOCIATION acting as Administrator (the "Administrator") of the Netherlands Grant (as hereinafter defined) provided by the Minister for Development Cooperation of the Netherlands (the "Minister"). WHEREAS the Grantee has requested the assistance of the International Development Association (the "Association") and of the Minister in the financing of urgently needed imports required during the execution of the Grantee's Program for strengthening the Social Safety Net, described in a letter from the Grantee to the Association, dated November 30, 1992 (the "Program"); WHEREAS the Association has granted a Credit for this purpose on the terms and conditions set forth in the Development Credit Agreement, of even date herewith, between the Grantee and the Association (the "Development Credit Agreement"); Page 2 WHEREAS the Minister wishes to make available to the Grantee a grant to assist the Grantee in carrying out the Program on the terms and conditions hereinafter set forth ("Netherlands Grant"); WHEREAS by arrangements dated December 11, 1986 between the Minister, the International Bank for Reconstruction and Development and the Association (the "Arrangements"), the Minister has requested the Association, and the Association has accepted, to administer, inter alia, the Netherlands Grant in accordance with the provisions of the Arrangements; and WHEREAS the Grantee acknowledges that the financial assistance extended to the Grantee under this Netherlands Grant Agreement shall be considered as part of the bilateral development aid extended by the Government of the Netherlands to the Grantee; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The General Conditions Applicable to Development Credit Agreements of the Association, dated January 1, 1985 (the "General Conditions") constitute an integral part of this Agreement subject, however, to the following modifications thereof: (a) the term "Association", wherever used in the General Conditions, means the International Development Association acting as Administrator of the Netherlands Grant pursuant to the Arrangements, except in the phrase "member of the Association" in Sections 2.01 (5), 4.02 (b) and 6.02 (e); (b) the term "Development Credit Agreement", whenever used in the General Conditions, means this Agreement; (c) the term "Credit", whenever used in the General Conditions, means the Netherlands Grant extended to the Grantee under this Agreement; (d) the term "Credit Account", whenever used in the General Conditions, means the Netherlands Grant Account, the account opened by the Administrator in its books in the name of the Grantee to which the amount of the Netherlands Grant is credited; (e) Section 2.01, paragraph 9, shall be modified to read: "'Program' means the imports and other activities that may be financed out of the proceeds of the Netherlands Grant pursuant to the provisions of Schedule 1 to the Development Credit Agreement"; (f) in Section 6.02 the term "Association" shall also include the International Development Association acting in its own capacity; (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 Grantee and the Administrator, the Grantee shall prepare and furnish to the Administrator a report, of such scope and in such detail as the Administrator shall reasonably request, on the execution of the Project referred to in the Preamble to the Netherlands Grant Agreement, the performance by the Grantee and the Administrator of their respective obligations under the Netherlands Grant Agreement and the accomplishment of the purposes of the Netherlands Grant"; and (h) Sections 3.02, 3.03, 3.04, 3.05, 4.02, 4.03, 4.04, 4.06, 6.05, 7.01, 8.01 (a), and Article XII are deleted. Page 3 Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement and in the Development Credit Agreement have the respective meanings therein set forth and the terms Dutch Guilders and "f." mean the currency of the Netherlands. ARTICLE II The Grant Section 2.01. The Administrator agrees to extend to the Grantee, on the terms and conditions herein set forth or referred to, a grant in an amount of one hundred million Dutch Guilders (f.100,000,000). Section 2.02. (a) Subject to Section 2.02 (b) below, the proceeds of the Netherlands Grant may be withdrawn from the Netherlands Grant Account in accordance with the provisions of the Schedule to this Agreement, as such Schedule may be amended from time to time by agreement between the Grantee and the Administrator. (b) The Administrator shall not be obligated to make any payment under this Agreement except to the extent it shall first have received funds for the purpose from the Minister. Section 2.03. (a) Except as the Administrator shall otherwise agree, contracts for goods and services to be financed out of the proceeds of the Netherlands Grant shall be procured in accordance with the provisions of Schedule 2 to the Development Credit Agreement which is hereby incorporated into this Agreement with the same force and effect as if it were fully set forth herein, it being understood that the references in said Schedule to the "Association" and the "Development Credit Account" shall be deemed to be references to the Association acting as Administrator of the Netherlands Grant and the Netherlands Grant Account, respectively. (b) If the Administrator shall have reasonably determined that the procurement of any item is inconsistent with the procedures set forth or referred to in paragraph (a) above, no expenditures for such item shall be financed out of the proceeds of the Netherlands Grant, and the Administrator may, without in any way restricting or limiting any other right, power or remedy of the Administrator under this Agreement, by notice to the Grantee, cancel such amount of the Netherlands Grant as, in the Administrator's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Netherlands Grant. Section 2.04. The Closing Date shall be December 31, 1993 or such later date as the Administrator shall establish. The Administrator shall promptly notify the Grantee of such later date. ARTICLE III Execution of the Project Section 3.01. Except as otherwise expressly provided herein, Articles III and IV of the Development Credit Agreement are hereby incorporated into this Agreement with the same force and effect as if they were fully set forth herein, it being understood that all references in said Articles III and IV to the "Association" shall be deemed to be references to the Administrator of the Netherlands Grant under this Agreement and all references to the "Credit" and the "Credit Account" shall be deemed to be references to the Netherlands Grant and the Netherlands Grant Account, respectively. ARTICLE IV Remedies of the Administrator Section 4.01. Pursuant to Section 6.02 (h) of the General Page 4 Conditions, the following additional events are specified, namely, that the right of the Grantee to withdraw the proceeds of the Credit shall have been suspended, cancelled or terminated in whole or in part, pursuant to the Development Credit Agreement. ARTICLE V Effectiveness Section 5.01. (a) This Agreement shall become effective as of the date first above written upon dispatch by the Association to the grantee of a notice in writing pursuant to Section 12.03 of the General Conditions that the Development Credit Agreement has become effective. (b) This Agreement shall continue in effect until the Netherlands Grant has been fully disbursed and the parties to this Agreement have fulfilled their obligations under this Agreement. ARTICLE VI Representation; Transfer of Rights and Obligations Section 6.01. The Secretary, any Additional Secretary, Joint Secretary, Director, Deputy Secretary, Under Secretary of the Department of Economic Affairs in the Ministry of Finance of the Grantee is designated as the representative of the Grantee 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 Grantee: The Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi, PIN 110001, India Cable address: Telex: ECOFAIRS 953-3166175 New Delhi For the Administrator: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 197688 (TRT) Washington, D.C. 248423 (RCA) 64145 (WUI) or 82987 (FTCC) Section 6.03. In accordance with the Arrangements, the rights and obligations of the Administrator under this Agreement may be transferred to the Minister. The Grantee accepts and agrees that, upon notice by the Administrator to the Grantee to that effect, the Minister shall, ipso facto, from the date specified in such notice, be substituted in all rights and obligations of the Administrator under this Agreement as if the Minister had been an original party to this Agreement, without any further action or formality required on the part of any party, and from such date the Administrator shall cease to have any rights or obligations as a party under this Agreement. Page 5 IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, 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. INDIA By /s/ Narayan Valluri Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of the Netherlands Grant By /s/ D. Joseph Wood Regional Vice President South Asia SCHEDULE Withdrawal of the Proceeds of the Netherlands Grant 1. Subject to the provisions set forth or referred to in this Schedule, the proceeds of the Netherlands Grant may be withdrawn from the Netherlands Grant Account for expenditures made (or, if the Administrator 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 or any successor groups or sub-groups under future revisions to the SITC, as designated by the Administrator by notice to the Grantee: Group Sub-group Description of Items 112 __ Alcoholic beverages 121 __ Tobacco, unmanufactured tobacco refuse 122 __ Tobacco, manufactured (whether or not containing tobacco substitutes) 525 __ Radioactive and associated materials 667 __ Pearls, precious and semi- precious stones, unworked or worked 718 718.7 Nuclear reactors, and parts thereof, fuel elements (cart- ridges), non-irradiated for nuclear reactors 728.43 -- Tobacco processing machinery Page 6 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 __ Gold, non-monetary (excluding gold ores and concentrates) (b) expenditures in the currency of the Grantee or for goods supplied from the territory of the Grantee; (c) payments made for expenditures prior to the date of this Agreement, except that withdrawals in an aggregate amount not exceeding the equivalent of f.50,000,000 may be made on account of payments made for such expenditures before that date but after August 31, 1992; (d) expenditures for goods procured under contracts costing less than $25,000 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 except under the terms of this Agreement; and (f) expenditures for goods intended for a military or para- military purpose or for luxury consumption. 3. Withdrawals for expenditures under contracts for the procure- ment of goods estimated to cost the equivalent of less than $5,000,000 equivalent may be permitted by the Administrator upon the basis of statements of expenditure under such terms and conditions as the Administrator shall specify. 4. No withdrawal shall be made and no commitment shall be entered into to pay amounts to or on the order of the Grantee in respect of expenditures to be financed out of the proceeds of the Netherlands Grant after the aggregate of the proceeds of the Netherlands Grant withdrawn from the Netherlands Grant Account and the total amount of such commitments shall have reached the equivalent of f50,000,000, unless the Administrator shall have notified the Grantee in writing, that the conditions for disbursement of the Credit set out in paragraph 4 of Schedule 1 to the Development Credit Agreement has been complied with to the satisfaction of the Association. 5. If, after the exchange of views referred to in paragraph 4 of Schedule 1 to the Development Credit Agreement, the Association shall have given notice to the Grantee that the progress achieved and actions taken are not satisfactory and, within 90 days after such notice, the Grantee shall not have achieved progress and taken actions satisfactory to the Association, then the Administrator may, by notice to the Grantee, cancel the unwithdrawn amount of the Netherlands Grant or any part thereof.