Tanzania - Second National Sites And Services Project : Credit 0732 - Project Agreement - 2 - Conformed

CONFORMED COPY CREDIT NUMBER 732 TA Project Agreement (Second National Sites and Services Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and TANZANIA HOUSING BANK Dated November 3, 1977 CREDIT NUMBER 732 TA PROJECT AGREEMENT AGREEMENT, dated November 3, 1977 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 twelve million dollars ($12,000,000), 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 between the Borrower and THB, 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: -2- 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. -3- ARTICLE II Execution of the Project Section 2.01. THB shall carry out Part E 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 with the policies and procedures for loans set forth in Schedules 1 and 2 to this Agreement, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 2.02. THB shall duly perform all its obligations under the THB 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 THB Subsidiary Loan Agreement or any provision thereof. Section 2.03. THB shall have appointed by September 30, 1977, sufficient additional staff including, without limitation, a Procurement Officer, to ensure that Part E of the Project is implemented effectively. Section 2.04. THB shall establish in a timely fashion in the areas referred to in Part A (1) and (2) of the Project offices and material depots in order to improve the access and supply of building materials, including cement, corrugated iron roofing sheets and joinery, to participants in Part A (1) and (2) of the Project. 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 appropriate 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 Assocation shall from time to time reasonably request. -5- ARTICLE IV Consultation, Information and Inspection Section 4.01. The Association and THB shall cooperate fully to assure that the purposes of the Credit are 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 purposes of the Credit. Section 4.02. The Association and THB shall promptly inform each other of any condition which interferes or threatens to interfere with, the accomplishment of the purposes of the Credit or the performance by either of them of its obligations under this Agreement or the performance by the Borrower or THB of their respective obligations under the THB 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. - 6 - 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 hereunder 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. -7- ARTICLE VI Miscellaneous Provisions Sect.ion 6.01. Any notiep or requml required or permitted to be giv-a or made under this Agreement and any agreement between -I 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, 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 here- inafter 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: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) 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. -9- 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 Is/ W. A. Wapenhans Regional Vice President Eastern Africa TANZANIA ROUSING BANK By /s/ Paul Bomani Authorized Representative - 10 - SCHEDULE 1 Policies and Procedures for House Construction and Improvement Loans Under Part E (1) of the Project A. Procedures 1. Applications for house construction or improvement loans, may be made by persons living in an area described in Part A(l) of the Project and persons allocated plots pursuant to The provisions set forth or referred to in Section 3.04 of the Development Credit Agreement. Such applications will be in the form prescribed by THB and will be completed with the assistance of the appropriate officials of THB. The availability of loans will be publicized in the areas described in Part A (1) of the Project and provision will be made for applicants to obtain and submit applications in these areas. 2. For all individual applicants, THB will, before approving such applications, take into consideration the total income, from all sources, of the household as well as the prospective rental income if the applicant intends to build a house which will include rental space. 3. In considering applications from persons living in an area described in Part A(l) of the Project, THB will use procedures similar to those used for its rural lending program. In accordance with such procedures, applicants will be required to produce the - 11 - Offer of a Right of a Short Term Right of Occupancy, but appli- cants will not be required to pay valuation fees, and mortgages will not be required as security for such loans. 4. In considering applications from persons allocated plots pursuant to provisions set forth or referred to in Section 3.04 of the Development Credit Agreement, THB will use procedures similar to those normally used for low-cost housing. 5. 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. 6. 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. 7. THB will disburse cash or materials under an approved loan pursuant to the construction and inspection schedule set forth in the loan agreement between the approved applicant and THB. B. Policies With respect to 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: - 12 - (i) Amount: total investment requirements of the applicant for house construction or improvement as specified in the approved loan application. (ii) Interest: in accordance with THB's normal policies. (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, consistent with the procedures referred to in paragraphs A(3) and (4) of this Schedule. - 13 - SCHEDULE 2 Procedures and Policies for Loans under Part E (2) of the Project A. Procedures Applications for industrial shed construction loans may be made by applicants in the program described in Part F of the Project. Such applications will be in the form prescribed by THB and will be completed with the assistance of the appropriate officials of SIDO and THB. B. Policies Only loans up to TShsl20,000 may be approved under Part E (2) of the Project, and the following terms and conditions will apply to such loans: (i) Interest: not less than eight per cent (8%) per annum. (ii) Repayment period: a maximum of fifteen years including up to two years of grace. (iii) Downpayment and Security: such downpayment and security requirements as THB shall reasonably request.