OFFICIAL CREDIT NUMBER 1146 INDOCUMTS
Development Credit Agreement(Second NCDC Project)
between
INDIA
and
INTERNATIONAL DEVELOPMENT ASSOCIATION
Dated 7 l ( , 1981
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CREDIT NUMBER 1146 IN
DEVELOPMENT CREDIT AGREEMENT
AGREEMENT, dated J7 cf , 1981, betweenINDIA, acting by its President (hereinafter called the Borrower)and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called theAssociation).
WHEREAS (A) the Borrower has requested the Associationto assist in the financing of the Project described in Schedule 2to this Agreement by extending the Credit as hereinafter provided;
(B) the Project will be carried out by National CooperativeDevelopment Corporation (hereinafter called NCDC) with the Bor-rower's assistance and, as part of such assistance, the Borrowerwill make available to NCDC the proceeds of the Credit as herein-after provided; and
WHEREAS the Association has agreed, on the basis interalia of the foregoing, to extend the Credit to the Borrower uponthe terms and conditions hereinafter set forth and in the ProjectAgreement of even date herewith between the Association andNCDC;
NOW THEREFORE the parties hereto hereby agree as follows:
ARTICLE I
General Conditions; Definitions
Section 1.01. The parties to this Agreement accept- allthe provisions of the General Conditions Applicable to DevelopmentCredit Agreements of the Association, dated June 30, 1980, withthe same force and effect as if they were fully set forth herein(said General Conditions Applicable to Development Credit Agree-ments of the Association being hereinafter called the GeneralConditions).
Section 1.02. Wherever used in this Agreement, unless thecontext otherwise requires, the several terms defined in theGeneral Conditions and in the Preamble to this Agreement havethe respective meanings therein set forth and the followingadditional terms have the following meanings:
(a) "Project Agreement" means the agreement between theAssociation and NCDC of even date herewith, as the same may be
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amended from time to time, and such term includes all schedules tothe Project Agreement and all agreements supplemental to theProject Agreement;
(b) "Financial Agreement" means the agreement to be enteredinto between the Borrower and NCDC pursuant to Section 3.01 (b) ofthis Agreement, as the same may be amended from time to time;
(c) "Andhra Pradesh, Bihar, Haryana, Himachal Pradesh,Madhya Pradesh, Maharashtra, Punjab, Uttar Pradesh and WestBengal" mean respectively the following States of India: the Stateof Andhra Pradesh, the State of Bihar, the State of Haryana, theState of Himachal Pradesh, the State of Madhya Pradesh, the Stateof Maharashtra, the State of Punjab, the State of Uttar Pradeshand the State of West Bengal, or any successor thereof;
(d) "SCMFs" means the Andhra Pradesh State CooperativeMarketing Federation, the Bihar State Cooperative Marketing Union,the Haryana State Cooperative Supply and Marketing Federation,the Himachal State Cooperative Marketing Federation, the MadhyaPradesh State Cooperative Marketing Federation, the MaharashtraState Cooperative Marketing Federation, Punjab Cooperative Supplyand Marketing Federation, the Uttar Pradesh Cooperative MarketingFederation and the West Bengal State Cooperative MarketingFederation;
(e) "Cooperative" means a primary cooperative society, SCMFsand, if applicable, a regional cooperative marketing society
established according to the relevant laws of Andhra Pradesh,Bihar, Haryana, Himachal Pradesh, Madhya Pradesh, Maharashtra,Punjab, Uttar Pradesh and West Bengal;
(f) "Participating Cooperative" means a Cooperative inreceipt of a Sub-loan which is financed or refinanced by aNCDC-loan;
(g) "SCB" means a state cooperative bank and "SLDB" means a
state cooperative land development bank, respectively establishedaccording to the relevant laws of Andhra Pradesh, Bihar, Haryana,Himachal Pradesh, Madhya Pradesh, Maharashtra, Punjab, Uttar
Pradesh or West Bengal;
(h) "Participating Bank" means any SCB or SLDB which isallowed, in accordance with Section 2.08 of the Project Agreement,
to make Sub-loans;
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(i) "NCDC-loan" means a loan made or proposed to be madeby NCDC to a Participating Bank for the purpose of refinancingSub-loans made by the Participating Bank to Cooperatives forSub-projects, out of the equivalent of the proceeds of the Creditrelent to NCDC by the Borrower pursuant to Section 3.01 of thisAgreement;
(j) "Sub-loan" means a sub-loan made or proposed to be madeby a Participating Bank out of the proceeds of the Credit to aCooperative for a Sub-project; it being understood that thesub-loans in Bihar are made or proposed to be made by NCDC toBihar State Cooperative Marketing Union;
(k) "Sub-project" means a specific project to be carriedout by a Cooperative utilizing the proceeds of a Sub-loan; and
(1) "Recovery Rate" means the ratio (expressed in terms of apercentage) between (A) the aggregate amount of principal andinterest on loans paid during any fiscal year pursuant to obliga-tions that fell due during or before such year, and (B) theaggregate amount of principal and interest on loans that becamedue and payable during or before such year.
ARTICLE II
The Credit
Section 2.01. The Association agrees to lend to the Borrower,on the terms and conditions in the Development Credit Agreementset forth or referred to, an amount in various currencies equiva-lent to one hundred one million eight hundred thousand SpecialDrawing Rights (SDR 101,800,000).
Section 2.02. The amount of the Credit may be withdrawnfrom the Credit Account in accordance with the provisions ofSchedule 1 to this Agreement, as such Schedule may be amended fromtime to time by agreement between the Borrower and the Associa-tion, for expenditures made (or, if the Association shall soagree, to be made) in respect of the reasonable cost of goods andservices required for the Project and to be financed out of theproceeds of the Credit.
Section 2.03. Except as the Association shall otherwiseagree, procurement of the goods, civil works and services to befinanced out of the proceeds of the Credit, shall be governed by
the provisions set forth or referred to in Section 2.03 of the
Project Agreement.
Section 2.04. The Closing Date shall be June 30, 1987
or such later date as the Association shall establish. The
Association shall promptly notify the Borrower of such later
date.
Section 2.05. The Borrower shall pay to the Association
a service charge at the rate of three-fourths of one per cent
(3/4 of 1%) per annum on the principal amount of the CredJ:
withdrawn and outstanding from time to time.
Section 2.06. Service charges shall be payable semiannually
on February 1 and August 1 in e9ch year.
Section 2.07. The Borrower shall repay the principal amount
of the Credit in semiannual installments payable on each February
1 and August 1 commencing August 1, 1991, and ending February 1,
2031, each installment to and including the installment payable on
February 1, 2001, to be one-half of one per cent (1/2 of 1%) of
such principal amount, and each installment thereafter to be one
and one-half per cent (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
Execution of the Project
Section 3.01. (a) Without any limitation or restriction
upon any of its other obligations under the Development Credit
Agreement, the Borrower shall cause NCDC to perform in accordance
with the provisions of the Project Agreement and the Financial
Agreement all the obligations therein set forth, shall take
and cause to be taken all action, including the provision of
funds, facilities, services and other resources, necessary or
appropriate to enable NCDC to perform such obligations, and shall
not take or permit to be taken any action which would prevent or
interfere with such performance.
(b) The Borrower shall relend the proceeds of the Credit to
NCDC under a financial agreement to be entered into between the
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Borrower and NCDC with terms and conditions which are satisfactoryto the Association.
(c) The Borrower shall exercise its rights under theFinancial Agreement in such manner as to protect the interests ofthe Borrower and the Association and to accomplish the purposes ofthe Credit, and except as the Association shall otherwise agree,the Borrower shall not assign, amend, abrogate or waive theFinancial Agreement or any provision thereof.
ARTICLE IV
Remedies of the Association
Section 4.01. For the purposes of Section 6.02 of the GeneralConditions the following additional events are specified pursuantto paragraph (h) thereof:
(a) The National Cooperative Development Corporation Act,No. 26 of 1962, as amended to the date of this Agreement, shallhave been further amended, suspended, abrogated, repealed orwaived so as, in the judgment of the Association, to materiallyaffect the carrying out of the Project or the operations orfinancial condition of NCDC;
(b) NCDC shall have failed to perform any covenant, agree-ment or obligation of NCDC under the Project Agreement or underthe Financial Agreement;
(c) an extraordinary situation shall have arisen whichshall make it improbable that NCDC will be able to perform itsobligations under the Project Agreement or under the FinancialAgreement;
(d) the Borrower or any other authority having jurisdictionshall have taken any action for the dissolution or disestablish-ment of NCDC or for the suspension of its operations; and
(e) NCDC shall have become unable to pay any of its debtsas they mature or any action or proceeding shall have been takenby NCDC or by others whereby any of the property of NCDC shall ormay be distributed among its creditors.
Section 4.02. For the purposes of Section 7.01 of the GeneralConditions, the following additional events are specified pursuantto paragraph (d) thereof:
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(a) any event specified in paragraph (b) of Section 4.01 ofthis Agreement shall occur and shall continue for a period of 60days after notice thereof shall have been given by the Associationto the Borrower and NCDC; and
(b) any event specified in paragraphs (a), (c), (d) and(e) of Section 4.01 of this Agreement shall occur.
ARTICLE V
Effective Date; Termination
Section 5.01. The following events are specified as addi-tional conditions to the effectiveness of the Development CreditAgreement within the meaning of Section 12.01 (b) of the GeneralConditions:
(a) the execution and delivery of the Project Agreementon behalf of NCDC have been duly authorized or ratified by allnecessary corporate action; and
(b) the execution and delivery of the Financial Agreementon behalf of the Borrower and NCDC, respectively, have been dulyauthorized or ratified by all necessary corporate action.
Section 5.02. The following are specified as additionalmatters, within the meaning of Section 12.02 (b) of the GeneralConditions, to be included in the opinion or opinions to befurnished to the Association:
(a) that the Project Agreement has been duly authorizedor ratified by NCDC, and is legally binding upon NCDC in accor-dance with its terms; and
(b) that the Financial Agreement has been duly authorized orratified by the Borrower and NCDC and is legally binding upon theBorrower and NCDC in accordance with its terms.
Section 5.03. The date &2e 0/ /71 is herebyspecified for the purposes of Section 12.04 of the General Condi-tions.
Section 5.04. The obligations of the Borrower under Section4.02 of this Agreement shall cease and determine on the date onwhich the Development Credit Agreement shall terminate or on a
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date 20 years after the date of this Agreement, whichever shall bethe earlier.
ARTICLE VI
Representative of the Borrower; Addresses
Section 6.01. Any Secretary, Additional Secretary, JointSecretary, Director, Deputy Secretary or Under Secretary of theDepartment of Economic Affairs in the Ministry of Finance of theBorrower is designated as representative of the Borrower for thepurposes of Section 11.03 of the General Conditions.
Section 6.02. The following addresses are specified forthe purpose of Section 11.01, of the General Conditions:
For the Borrower:
The Secretary to the Governmentof India
Ministry of FinanceDepartment of Economic AffairsNew Delhi 110001India
Cable address: Telex:
ECOFAIRS 953-313546New Delhi
For the Association:
International Development Association1818 H Street, N.W.Washington, D.C. 20433United States of America
Cable address: Telex:
INDEVAS 440098 (ITT)Washington, D.C. 248423 (RCA) or
64145 (WUI)
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IN WITNESS WHEREOF, the parties hereto, acting throughtheir representatives thereunto duly authorized, have caused thisAgreement to be signed in their respective names in the Districtof Columbia, United States of America, as of the day and yearfirst above written.
INDIA
ByAuthorized Representative
INTERNATIONAL DEVELOPMENT ASSOCIATION
By v 4Regional Vice President
South Asia
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SCHEDULE 1
Withdrawal of the Proceeds of the Credit
1. The table below sets forth the Categories of items to befinanced out of the proceeds of the Credit, the allocation of theamounts of the Credit to each Category and the percentage ofexpenditures for items so to be financed in each Category:
Amount of theCredit Allocated % of(Expressed in Expenditures
Category SDR Equivalent) to be Financed
(1) NCDC loans 99,400,000 85%
(2) Equipment and 830,000 100% of foreignvehicles expenditures
and 80% oflocal expen-ditures
(3) Technical 670,000 100%assistanceand training
(4) Research and 900,000 100%development
TOTAL 101,800,000
2. For the purposes of this Schedule:
(a) the term "foreign expenditures" means expendituresin the currency of any country other than the Borrower and forgoods or services supplied from the territory of any country otherthan the Borrower; and
(b) the term "local expenditures" means expenditures inthe currency of the Borrower and for goods or services suppliedfrom the territory of the Borrower.
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3. The disbursement percentages have been calculated in com-
pliance with the policy of the Association that no proceeds of the
Credit shall be disbursed on account of payments for taxes levied
by, or in the territory of, the Borrower on goods or services, or
on the importation, manufacture, procurement or supply thereof; to
that end, if the amount of any such taxes levied on or in respect
of any item to be financed out of the proceeds of the Credit
decreases or increases, the Association may, by notice to the
Borrower, increase or decrease the disbursement percentage then
applicable to such item as required to be consistent with the
aforementioned policy of the Association.
4. Notwithstanding the provisions of paragraph 1 above, no
withdrawals shall be made in respect of payments made for expen-
ditures prior to the date of this Agreement, except that with-
drawals, in an aggregate amount not exceeding the equivalent of
$4,000,000 may be made under Categories (1), (2) and (3) on
account of payments made for such expenditures before that date
but after October 1, 1980.
5. Notwithstanding the allocation of an amount of the Credit
or the disbursement percentages set forth in the table in para-
graph 1 above, if the Association has reasonably estimated
that the amount of the Credit then allocated to any Category
will be insufficient to finance the agreed percentage of all
expenditures in that Category, the Association may, by notice to
the Borrower: (i) reallocate to such Category, to the extent
required to meet the estimated shortfall, proceeds of the Credit
which are then allocated to another Category and which in the
opinion of the Association are not needed to meet other expendi-
tures; and (ii) if such reallocation cannot fully meet the
estimated shortfall, reduce the disbursement percentage then
applicable to such expenditures in order that further withdrawals
under such Category may continue until all expenditures thereunder
shall have been made.
6. If the Association shall have reasonably determined that
the procurement of any item in any Category is inconsistent with
the procedures set forth or referred to in this Agreement, no
expenditures for such item shall be financed out of the proceeds
of the Credit and the Association may, without in any way restric-
ting or limiting any other right, power or remedy of the Associa-
tion under the Development Credit Agreement, by notice to the
Borrower, cancel such amount of the Credit as, in the Associa-
tion's reasonable opinion, represents the amount of such expendi-
tures which would otherwise have been eligible for financing out
of the proceeds of the Credit.
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SCHEDULE 2
Description of the Project
The Project is designed to: (i) develop storage, marketingand office facilities through financing the construction ofabout 127 cold stores and about 7,900 godowns by ParticipatingCooperatives in Andhra Pradesh, Bihar, Haryana, Himachal Pradesh,Madhya Pradesh, Maharashtra, Punjab, Uttar Pradesh and WestBengal, thereby helping in meeting the service requirementspreceding and following the harvest; (ii) promote the developmentand expansion of the cooperative institutions within these States;(iii) expand the capability for cooperative Sub-project prepara-tion and appraisal; (iv) foster research in the marketing of andthe development of storage of perishables; (v) undertake manpowerplanning and training programs; and (vi) strengthen NCDC asa development finance institution for cooperatives.
The Project is expected to be completed by September 30,1986.
INTERNATIONAL DEVELOPMENT ASSOCIATION
CERTIFICATE
I hereby certify that the foregoing is a true
copy of the original in the archives of the Interna-
tional Development Association.
In witness whereof I have signed this Certifi-
cate and affixed the Seal of the Association
thereunto the day of
1981L.
FOR SECRETARY
