Bolivia - Interim Second Beni Livestock Development Project : Credit 0171 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 171 BO Development Credit Agreement (Interim Second Beni Livestock Development Project) BETWEEN REPUBLIC OF BOLIVIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JANUARY 13, 1970 CONFORMED COPY CREDIT NUMBER 171 BO Development Credit Agreement (Interim Second Beni Livestock Development Project) BETWEEN REPUBLIC OF BOLIVIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JANUARY 13, 1970 I Brolopmnt (Tubit Agrermnt AGREEMENT, dated January 13, 1970, between REPUB- LIC OF BOLIVIA (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT AssOcIATIoN (hereinafter called the Association). WHEREAS the Association has made a development credit to the Borrower dated May 26, 1967 (Beni Livestock Devel- opment Project), Credit 107 BO, for the first stage of a livestock development program aimed at increasing beef production in selected areas in the territories of the Bor- rower (hereinafter called the First Livestock Credit); WHEREAS the Borrower has requested the Association to provide further financial assistance for the continuation of the said livestock development program; and WHEREAS the Association is willing to make a credit to 'he Borrower, on the terms and conditions hereinafter set forth; Now THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions SECTION 1.01. The parties to this Development Credit Agreement accept all the provisions of the General Condi- tions Applicable to Development Credit Agreements of the Association, dated January 31, 1969, with the same force and effect as if they were fully set forth herein (said Gen- eral Conditions Applicable to Development Credit Agree- ments of the Association being hereinafter called the Gen- eral Conditions). 4 SECTION 1.02. Wherever used in this Development Credit Agreement, unless the context otherwise requires, the sev- eral terms defined in the General Conditions have the re- spectiv e meanings therein set forth, and the following addi- tional ;erms have the following meanings: (a) TLe term "Central Bank" means the Banco Central de Bolivia. (b) The term "BAB" means the Banco Agricola de Bolivia. (c) The term "Project Agreement" means the agree- ment of even date herewith between the Association and BAB, as the same may be amended or supple- mented from time to time by agreement between the Association and BAB. (d) The term "ranch development plan" means a pro- posal for investing in fencing, stock handling and watering facilities, essential ranch construction, stock and pasture management equipment and tools, se- lected pasture establishment and limited numbers of breeding cattle or other related on-ranch items or any combination thereof, and for the provision of working capital and technical services in connection therewith. (e) The term "Project Director" means the livestock expert referred to in Section 2.08 of the Project Agreement. (f) The term "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and BAB, on terms and conditions satisfactory to the Association. (g) The term "Project Area" means the Provinces of Ballividn, Yacuma, Mamore, Itenez., Cercado, Marban and Moxos of the Departamento del Beni of the Borrower. 5 ARTICLE II The Credit SECTION 2.01. The Association agrees to lend to the Bor- rower, on the terms and conditions in this Development Credit Agreement set forth or referred to, an amount in various currencies equivalent to one million four hundred thousand dollars ($1,400,000). SECTION 2.02. (a) The Association shall open a Credit Account oi its books in the name of the arrower and shall credit to such Account the amount of the Credit. (b) The amount of the Credit may be withdrawn from the Credit Account as provided in, and subject to the rights of cancellation and suspension set forth in, this Develop- ment Credit Agreement. SECTION 2.03. (a) The Borrower shall be entitled to withdraw from the Credit Account in respect of the long- term loans or the portions thereof to be financed under this Development Credit Agreement the equivalent of eighty-five per cent (85%/) or such other percentage as may be established from time to time by agreement between the Borrower and the Association of such amounts as shall have been disbursed by BAB under the loans described in the Allocation of Proceeds of the Credit included in Sched- ule 1 to this Agreement; provided, however, that no with- drawals shall be made with respect to any such loan or po- tion thereof unless the Project Director approves the ranch development plan for which such loan was requested and, where the amount of any such loan is one hundred thousand dollars ($100,000) equivalent or more, unless the relevant plan shall also have been approved by the Association. (b) No withdrawals shall be made from the Credit Ac- count before the amounts allocated to Category 1 of the Allocation of the Proceeds of the First Livestock Credit have been withdrawn in full. 6 SECTION 2.04. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. SECTION 2.0P. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (% of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. SECTION 2.06. Service charges shall be payable semi- annually on May 15 and November 15 in each year. SECTION 2.07. The Borrower shall repay the principal amount of the Credit withdrawv from the Credit Account in semi-annual installments payable on each May 15 and November 15 commencing May 15, 1980 and ending Novem- ber 15, 2019, each installment to and including the install- ment payable on November 15, 1989 to be one-half of one per cent ( of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1 2%) of such principal amount. ARTICLE III Use of Proceeds of the Credit SECTION 3.01. The Borrower shall cause the proceeds of the Credit to be applied exclusively to financing the cost of the goods -.equired to carry out the Project. The specific allocation of the proceeds of the Credit shall be determined by agreement between the Association and BAB acting on behalf of the Borrower, subject to modification by further agreement between them. SECTION 3.02. Except as the Association shall otherwise agree, the Borrower shall cause all goods financed out of the proceeds of the Credit to be used in the territories of the Borrower exclusively in the carrying out of the Project. 7 ARTICLE IV Particular Covenants SECTION 4.01. (a) The Borrower shall cause the Project to be carried out by BAB with due diligence and efficiency and in conformity with sound agricultural, administrative, economic and financial practices and shall cause BAB to be provided, promptly as needed, with the funds, facilities, services and other resources required for the purpose. (b) The Borrower shall enter into a Subsidiary Loan Agreement for the purpose of relending the equivalent of the proceeds of the Credit to BAB. The Borrower shall exercise its rights in relation to the Subsidiary Loan Agree- ment in such manner as to protect the interests of the Borrower and the Association. Except as the Borrower and the Association shall otherwise agree, the Borrower shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving any provision of the Subsidiary Loan Agreement. (c) The operating policies and procedures for the carry- ing out of the Project shall be as agreed from time to time between the Association, the Borrower and BAB pursuant to Section 4.01(c) of the First Livestock Credit. SECTION 4.02. (a) The Borrower shall maintain at the Central Bank a Fund (hereinafter called the Project Re- volving Fund) under terms and conditions satisfactory to the Association to be used exclusively to make and receive payments connected with the Project. (b) Payments by BAB of principal and interest under the Subsidiary Loan Agreement shall be made to the Project Revolving Fund, and the Borrower shall, until the termination of th-, said Subsidiary Loan Agreement, cause all sums so paid to be made available to BAB for the purpose of continuing the financing of livestock develop- I 8 ment in the Project Area, except for sunis required to (i) service the Credit and (ii) meet the administrative expenses arising from the Project. (c) The Borrower shall cause the accounts relating to the Project Revolving Fund to be aldited annually by an accountant acceptable to the Association, and shall promptly thereafter, and not later than four months after the close of the Biorrower's financial year, transmit to the Association certified copies of such accounts and a signed copy of the accountant's report. SECTION 4.03. The Borrower shall: (i) maintain or cause to be maintained records adequate to identify the goods financed out of the proceeds of the Credit, to disclose the use thereof in the Project, to record the progress of the Project (including the cost thereof) and to reflect in accord- ance with consistently maintained sound accounting prac- tices the operations and financial condition of the Project Revolving Fund; (ii) enable the Association 's representa- tives to inspect the Project, the goods and any relevant records and documents; and (iii) furnish or cause to be furnished to the Association all such information as the Association shall reasonably request concerning the expend- iture of the proceeds of the Credit, the Project, the goods, and the administration, operations and financial condition of the Project Revolving Fund. SECTION 4.04. The Borrower and the Association shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end: (a) the Borrower and the Association shall from time to time, at the request of either party, exchange views through their representatives with regard to the progress of the Project, the performance by the Borrower of its obligations under this Development Credit Agreement, the 9 administration, operations and financial condition of the Project Revolving Fund, the financial and economic condi- tions in the territories of the Borrower, and the interna- tional balance of payments position of the Borrower; (b) the Borrower shall promptly inform the Association of any condition which interferes with or threatens to interfere with the accomplishment of the purposes of the Credit, the maintenance of the service thereof or the per- formance by the Borrower of its obligations nder this Development Credit Agreement and the Subsidiary Loan Agreement; and (c) the Borrower shall afford all reasonable opportunity for accredited representatives of the Association to visit any part of the territories of the Borrower for purposes related to the Credit. SECTION 4.05. The principal of, and service charges on, the Credit shall be paid without deduction for, and free from, any taxes and free from all restrictions, imposed under the laws of the Borrower or laws in effect in its territories. SECTION 4.06. This Development Credit Agreement and the Project Agreement shall be free from any taxes that shall be imposed under the laws of the Borrower or laws in effect in its territories on or in connection with the execution, delivery or registration thereof. SECTION 4.07. The Borrower shall take reasonable meas- ures to maintain in the Project Area (i) an effective foot- and-mouth disease control program, and (ii) an effective procedure for prompt clarification of land titles. ARTICLE V Remedies of the Association SECTION 5.01. If any event specified in Section 7.01 of the General Conditions or in Section 5.02 of this Develop- 0 I 10 ment Credit Agreement shall occur and shall continue for the period, if any, therein set forth, then at any subsequent time during the continuance thereof, the Association, at its option, may by notice to the Borrower dleclare the prin- cipal of the Credit then outstanding to ' aue and payable immediately together with the service charges thereon and upon any such declaration such principal, together with such charges, shall become due and payable immediately, anything in this Development Credit Agreement to the contrary notwithstanding. SECTION 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified: (a) BAB shall have failed to perform any covenant or agreement of BAB under the Project Agreement, and such non-performance shall continue for a period of sixty days. (b) A default shall have occurred in the performance of any covenant or agreement on the part of the Borrower or BAB under the Subsidiary Loan Agreement, and such non-performance shall continue for a period of sixty days. (e) An event specified under Section 5.02 (a) and (b) of the First Livestock Credit shall have occurred. ARTICLE VI Effective Date; Termination SECTION 6.01. The following events are specified as ad- ditional conditions to the effectiveness of this Develop- ment Credit Agreement within the meaning of Section 10.01 (b) of the General Conditions: (a) the execution and delivery of the Project Agreeient on behalf of BAB have been duly authorized or 11 ratified by all necessary corporate and governmental action; and (b) the execution and delivery of the Subsidiary Loan Agreement on behalf of the Borrower and BAB have been duly authorized or ratified by all necessary governmental and corporate action. SECTION 6.02. The following are specified as additional matters, within the meaning of Section 10.02 (b) of the General Conditions, to be included in the opinion or opin- ions to be furnished to the Association: (a) that the Project Agreement has been duly authorizoa or ratified by, and executed and delivered. on behalf of, BAB and constitutes a valid and binding obliga- tion of BAB in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, the Borrower and BAB and constitutes a valid and binding obligation of the Borrower and BAB in accordance with its terms. SECTION 6.03. The date of April 15, 1970 is hereby specified for the purpo.ses of Section 10.04 of the General Conditions. SECTION 6.04. The obligations of the Borrower under Sections 4.01, 4.02, 4.03 and 4.07 of this Development Credit Agreement shall terminate on the date on which this De- velopment Credit Agreement shall terminate or on the date when all principal withdrawn by BAB from the Project Revolving Fund prior to the Closing Date and interest thereon shall have been paid by BAB to the Borrower, whichever shall be the earlier. 12 ARTICLE VII Miscellaneous SECTION 7.01. The Closing Date shall be December 31, 1974 or such other date as shall be agreed between the Borrower and the Association as the Closing Date. SECTION 7.02. The following addresses are specified for the purposes of Section 9.01 of the General Conditions: For the Borrower: Ministerio dc Hacienda La Paz, Bolivia Cable address: Minhacienda La Paz, Bolivia For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Indevas Washington, D.C. SECTION 7.03. The Ministro de Hacienda of the Bor- rower is designated for the purposes of Section 9.03 of the General Conditions. IN WITNESS WHEREOF, the parties hereto acting through their representatives thereunto duly authorized, have caused this Development Credit Agreement to be signed 13 in their respective narnes and delivered in the District of Columbia, United States of Amer-.ca, as of the day and year first above written. REPUBLIC OF BOLIVIA By /s/ COL. EDMUNDO VALENCIA IBANEZ Authorized Representative INTERNATIONAL DEVELOPMEN T ASSOCIATION By /s/ J. BURKE KNAPP Vice President 14 SCHEDULE 1 Allocation of Proceeds of Credit Amounts Expressea Category in Dollar Equivalent Long-term loans for investment in ranch development 1,400,000 15 SCHEDULE 2 Description of Project The Project is the continuation of the first stage of a livestock development program of the Borrower, and con- sists in providing beef cattle producers in the Project Area with the following: (1) long-term loans or portions thereof for investment in ranch development; (2) related technical services; and (3) short-term loans for working capital, exclusively from BAB 's own resources.