Tanzania - Technical Assistance Project : Credit 0601 - Project Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 601 TA Project Agreement (Technical Assistance Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND TANZANIA INVESTMENT BANK DATED JANUARY 9, 1976 PROJECT AGREEMENT AGREEMENT, dated January 9, 1976, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and TANZANIA INVESTMENT BANK (hereinafter called TIB). 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 six million dollars ($6,000,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that TIB agree to undertake such obligations toward the Association as hereinafter set forth; and WHEREAS TIB, 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 and the term "sub-project" means any of the studies to be financed under Part A of the Project. ARTICLE II Execution of the Project Section 2.01. TIB shall carry out 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. Section 2.02. Except as the Association shall otherwise agree, the goods and services (other than consultants' services) for the Project to be financed out of 4 the proceeds of the Credit, shall be procured in accordance with the Borrower's usual procurement procedures. Section 2.03. (a) TIB undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit made available to it by the Borrower against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by TIB to replace or repair such goods. (b) Except as the Association may otherwise agree, all goods and services financed out of the proceeds of the Credit made available to TIB by the Borrower shall be used exclusively for the Project until its completion. Section 2.04. (a) TIB shall furnish to the Association promptly upon their preparation, the plans, specifications, reports, contract documents and work and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) TIB: (i) shall maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Credit made available to it by the Borrower, and to disclose the use thereof in the Project; (ii) shall, without limitation upon the provisions of paragraph (c) of this Section, enable the Association's representatives to visit the facilities and construction sites included in the Project, and to examine the goods financed out of such proceeds and any relevant records and documents; and (iii) shall furnish to the Association all such information as the Association shall reasonably request concerning the Project, the expenditure of the proceeds of the Credit so made available to it and the goods and services financed out of such proceeds. Section 2.05. TIB shall duly perform all its obligations under the Subsidiary Agreement. Except as the Association shall otherwise agree, TIB 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. Section 2.06. (a) TIB shall, at the request of the Association, exchange views with the Association with regard to the progress of the Project, the performance of its obligations under this Agreement and under the Subsidiary Agreement and other matters relating to the purposes of the Credit. (b) TIB shall promptly inform the Association of any condition which interferes or threatens to interfere with, the progress of the Project, the 5 accomplishment of the purposes of the Credit, or the performance by TIB of its obligations under this Agreement and under the Subsidiary Agreement. Section 2.07. In carrying out Parts A and B of the Project, TIB shall: (a) establish and maintain a Project Unit to be responsible for the supervision of Parts A and B of the Project; (b) cause the Project Unit to be staffed and to operate in accordance with the provisions set forth in Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower, the Association and TIB; . (c) make available to the Project Unit 'he necessary supporting staff, office space, equipment, vehicles and housing; (d) employ, or cause .to be employed, consultants in accordance with the provisions set forth in paragraphs 5 and 6 of Schedule 1 to this Agreement; (e) not enter into any agreement with a parastatal enterprise or a governmental agency for the financing of sub-projects without having previously obtained (i) the approval of TIB's Board of Directors, and (ii) if the sub-project is estimated to involve expenditures in excess of the equivalent of $50,000, the approval of the Association; and (f) no later than June 30, 1976, or such later date as the Association shall agree, make available to the Association, for its review and comment, the staff training program referred to in paragraph 4 (a) of Schedule I to this Agreement. ARTICLE III Financial Covenants Section 3.01. TIB shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. Section 3.02. TIB 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 A 6 Association as soon as available, but in any case not later than four 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 TIB and the audit thereof as the Association shall from time to time reasonably request. ARTICLE IV Effective Date; Termination; Cancellation and Suspension Section 4.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 4.02. (a) This Agreement and all obligations of the Association and of TIB 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 twenty-five 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 TIB of this event. Section 4.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension tinder the Development Credit Agreement. ARTICLE V Miscellaneous Provisions Section 5.01. 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 to have been duly given or made when it shall be delivered by hand or by mail, 7 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 TIB: Tanzania Investment Bank P.O. Box 9373 Dar es Salaam United Republic of Tanzania Cable address: INVESTMENTS Dar es Salaam Section 5.02. TIB 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 TIB, take any action or execute any documents required or permitted to be taken or executed by TIB pursuant to any of the provisions of this Agreement. Section 5.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. 8 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. INTERNATIONAL DEVELOPMENT ASSOCIATION By /s / S. Shahid Husain Regional Vice President Eastern Africa TANZANIA INVESTMENT BANK By /s / Paul Bomani Authorized Representative 9 SCHEDULE 1 Project Unit Staff 1. The Project Unit shall consist of an economist/financial analyst, an engineer and a lawyer (all of whom shall be recruited in consultation between the Association and TIB) as well as of the necessary supporting staff. The economist/financial analyst or the engineer shall be appointed head of the Project Unit. The Project Unit shall report to TIB's Director of Planning. 2. The Project Unit's lawyer shall be attached to the Tanzania Legal Corporation (the Corporation) under an arrangement between TIB and the Corporation, which shall be satisfactory to the Association and the two parties and which shall inter alia provide for the Project Unit to have the priority in the use of such lawyer's services. Sub-Projects under Part A of the Project 3. The Project Unit shall assist in the preparation and the supervision of the sub-projects included in Part A of the Project. It shall without limitation be responsible for: (a) selecting parastatal enterprises and governmental agencies and sub-projects to be carried out by them; (b) negotiating agreements between TIB and any selected parastatal enterprise or governmental agency providing for TIB to make available to such parastatal enterprise or governmental agency in the form of a grant the funds disbursed from the Credit Account for the purpose of assisting such parastatal enterprise or governmental agency in carrying out its sub-project; (c) assisting any selected parastatal enterprise or governmental agency in drafting terms of reference for its sub-project, in selecting consultants to be employed by such parastatal enterprise or governmental agency to carry out the sub-project, in negotiating contracts with such consultants and in supervising their services; and (d) identifying potential sources for the financing of viable projects that might emerge from sub-projects. 10 Training under Part B of the Project 4. The Project Unit shall (a) prepare a program for the staff training included in Part B of the Project and (b) propose for the selection by TIB's management such members of the staff of national development banks and of parastatal enterprises and governmental agencies as would be qualified to receive the staff training fellowships included in Part B of the Project. Use of Consultants 5. The Project Unit (a) may, on behalf of TIB, employ consultants to assist it in carrying out its functions, and (b) shall cause parastatal enterprises and governmental agencies selected to carry out sub-projects to employ consultants for the purpose. 6. The qualifications, experience and terms and conditions of employment of the consultants referred to in paragraph 5 above shall be satisfactory to the Association if the total payments estimated to be made to such consultants for their services shall exceed the equivalent of $50,000.