Tanzania - Sites And Services Project : Credit 0495 - Project Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 495 TA Project Agreement (Sites and Services Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND TANZANIA HOUSING BANK DATED JULY 12, 1974 CONFORMED COPY CREDIT NUMBER 495 TA Project Agreement (Sites and Services Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND TANZANIA HOUSING BANK DATED JULY 12, 1974 PROJECT AGREEMENT AGREEMENT, dated July 12, 1974, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and TANZANIA HOUSING BANK (hereinafter called THB). WHEREAS by the Development Credit Agreement of even date herewith between United Republic of Tanzania (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to eight million five hundred thousand dollars ($8,500,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that THB agree to undertake such obligations toward the Association as hereinafter set forth; WHEREAS by a subsidiary loan agreement of even date herewith between the Borrower and THB, a portion of the proceeds of the credit provided for under the Development Credit Agreement will be made available to THB on the terms and conditions therein set forth; and WHEREAS THB, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. THB shall carry out Part F of the Project described in Schedule 2 to the Development Credit Agreement with due diligence and efficiency and in conformity with appropriate administrative and financial practices as well as 4 with the policies and procedures for house construction or improvement loans set forth in Schedule 1 to this Agreement. Section 2.02. THB shall duly perform all its obligations under the Subsidiary Loan Agreement. Except as the Association shall otherwise agree, THB shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the Subsidiary Loan Agreement or any provision thereof. ARTICLE III Financial Covenants Section 3.01. (a) THB shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. (b) THB shall establish and maintain a separate Project account to be used exclusively for purposes of the Project and shall record therein all receipts and payments for or in connection with the Project. Section 3.02. THB shall: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with sound 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 six months after the end of each such year, (A) certified copies of its financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning the accounts and financial statements of THB and the audit thereof as the Association shall from time to time reasonably request. ARTICLE IV Consultation, Information and Inspection Section 4.01. The Association and THB shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, the Association and THB shall from time to time, at the request of either party, exchange views through their representatives with regard to the performance of their respective obligations under this Agreement, the administration, operations and financial condition of THB and other matters relating to the purpose of the Credit. * 5 Section 4.02. The Association and THB shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Credit, the performance by either of them of its obligations under this Agreement or the performance by the Borrower and THB of their respective obligations under the Subsidiary Loan Agreement. Section 4.03. THB shall enable the Association's representatives to examine the records referred to in Section 3.01 of this Agreement and any relevant documents. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 5.02. (a) This Agreement and all obligations of the Association and of THB thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) a date 20 years after the date of this Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a)(ii) of this Section, the Association shall promptly notify THB of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the Development Credit Agreement. ARTICLE VI Miscellaneous Provisions Section 6.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed 6 to have been duly given or made when it shall be delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or at such other address as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: 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. For THB: Tanzania Housing Bank P.O. Box 1723 Dar es Salaam United Republic of Tanzania Cable address: HIFADHI Dar es Salaam Section 6.02. THB shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of the person or persons who will, on behalf of THB, take any action or execute any documents required or permitted to be taken or executed by THB pursuant to any of the provisions of this Agreement. Section 6.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. 7 IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names and delivered in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL DEVELOPMENT ASSOCIATION By /s / S. Shahid Husain Director, Regional Projects Department Eastern Africa Regional Office TANZANIA HOUSING BANK By /s / G. M. Chaguza Authorized Representative 8 SCHEDULE 1 Policies and Procedures for House Construction and Improvement Loans Under Part F of the Project A. Procedures 1. Persons awarded plots pursuant to the provisions set forth or referred to in Section 3.07 of the Development Credit Agreement may apply to THB for house construction or improvement loans. Applications therefor will be made in the form prescribed by THB and will be completed with the assistance of the appropriate officials of THB. THB will approve an application if it determines that (i) the applicant is able to repay the loan without undue hardship and (ii) adequate provisions for enforcing the repayment of the loan exist. For individual applicants, THB will, before approving such applications, take into consideration the total income of the household as well as the prospective rental income if the applicant intends to build a house which will include rental space. For applications from housing cooperatives, THB will, before approving such applications, take into consideration the household and prospective rental incomes of all members of each such cooperative. 2. THB will disburse cash under an approved loan pursuant to the construction and inspection schedule set forth in the loan agreement between the approved applicant and THB. 3. Housing cooperatives' accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year shall be audited by the Borrower's Registrar of Cooperatives not later than six months after the end of each such fiscal year. B. Policies For all loans approved pursuant to the procedures set forth or referred to in paragraph A of this Schedule, the following terms and conditions will apply: (i) Amount: Total investment requirements of the applicant for house construction or improvement as specified in the approved loan application. 9 (ii) Interest: Six per cent (6%) per annum on the principal amount of the loan withdrawn and outstanding from time to time. (iii) Repayment period: A maximum of 20 years including a maximum grace period of one year. (iv) Security: Such security as THB shall reasonably request.