Conformed Copy - C2033 - Urban Household Energy Project - SIDA Grant Agreement

Page 1 SIDA GRANT RELATED TO CREDIT NUMBER 2033 MOZ (Urban Household Energy Project) between REPUBLIC OF MOZAMBIQUE and INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of development aid funds provided by THE SWEDISH INTERNATIONAL DEVELOPMENT AUTHORITY Dated December 7, 1992 SIDA GRANT RELATED TO CREDIT NUMBER 2033 MOZ SIDA GRANT AGREEMENT AGREEMENT, dated December 7, 1992, between THE REPUBLIC OF MOZAMBIQUE (the Grantee) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) acting as Administrator (the Administrator) of the Swedish Grant (as hereinafter defined) provided by the Swedish International Development Authority (SIDA). WHEREAS: (A) SIDA has agreed to make available a grant (the SIDA Grant) through the Administrator to the Grantee to assist in the financing of the activities described in Part B.4 of Schedule 2 to the Development Credit Agreement dated September 28, 1989, as amended, entered into between the Grantee and the Association for the Household Energy Project (the Project), on the terms and conditions hereinafter set forth; (B) by an agreement between SIDA and the Association (the Administration Agreement), SIDA has requested the Association, and the Association has accepted, to administer the SIDA Grant in accordance with the provisions of the Administration Agreement; (C) the Grantee acknowledges that the financial assistance extended to the Grantee under this agreement (the SIDA Grant Agreement) shall be considered as part of the bilateral development aid extended by Sweden to the Grantee; and (D) the Administrator has agreed on the basis, inter alia, of the foregoing to extend the SIDA Grant to the Grantee in support of the Project, upon the terms and conditions set forth in this Agreement; Page 2 NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The General Conditions Applicable to Development Credit Agreements of the Association, dated January 1, 1985 (the General Conditions) constitute an integral part of this Agreement subject, however, to the following modifications thereof: (a) the term "Association", whenever used in the General Conditions, means the International Development Association acting as Administrator of the SIDA Grant pursuant to the Administration Agreement, except in the phrase "member of the Association" in Sections 2.01 (5), 4.02 (b) and 6.02 (e); (b) the term "Development Credit Agreement", whenever used in the General Conditions, means the SIDA Grant Agreement; (c) the term "Credit", whenever used in the General Conditions, means the SIDA Grant; (d) the term "Credit Account", whenever used in the General Conditions, means the trust account opened by the Administrator in its books in the name of the Grantee to which the amount of the SIDA Grant is credited (the Trust Account); (e) in Section 6.02 the term "Association" shall also include the Association acting in its own capacity; (f) Section 9.06 (c) shall be modified to read: "(c) Not later than six months after the Closing Date, or such later date as may be agreed for this purpose between the Grantee and the Administrator, the Grantee shall prepare and furnish to the Administrator a report of such scope and in such detail as the Administrator shall reasonably request, on the execution of the activities referred to in the Preamble to the SIDA Grant Agreement, the performance by the Grantee and the Administrator of their respective obligations under the SIDA Grant Agreement and the accomplishment of the purposes of the SIDA Grant."; and (g) Sections 3.02, 3.03, 3.04, 3.05, 4.02, 4.03, 4.04, 4.06, 6.05, 7.01, 8.01 (a), and Article XII are deleted. Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions, in the Administration Agreement, and in the Preamble to this Agreement have the respective meanings therein set forth and "Swedish Kronor" or "SEK" means the currency of Sweden. ARTICLE II The Grant Section 2.01. The Administrator agrees to extend to the Grantee, on the terms and conditions herein set forth or referred to, a grant in an amount equivalent to four million eight hundred thousand Swedish Kronor (SEK 4,800,000) or such other amount as shall have been made available by SIDA to the Administrator for this purpose pursuant to the Administration Agreement. Section 2.02. (a) The amount of the SIDA Grant may be withdrawn from the Trust Account in accordance with the provisions of the Schedule to this Agreement, as such Schedule may be amended from time to time by agreement between the Grantee and the Administrator for expenditures made (or if the Administrator shall so agree, to be made) in respect of the reasonable cost of the works required for the Project. Page 3 (b) Notwithstanding the provisions of paragraph (a) above, no withdrawals shall be made in respect of payments for taxes levied by, or in the territory of, the Grantee on works or in the importation, manufacture, procurement or supply thereof. Section 2.03. (a) Except as the Association shall otherwise agree, works required for the Project and to be financed out of the proceeds of the Grant shall be procured in accordance with procedures consistent with those set forth in the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1992. (b) If the Administrator shall have reasonably determined that the procurement of any item is inconsistent with the procedures set forth or referred to in paragraphs (a) and (b) above, no expenditures for such item shall be financed out of the proceeds of the SIDA Grant, and the Administrator may, without in any way restricting or limiting any other right, power or remedy of the Administrator under this Agreement, by notice to the Grantee, cancel such amount of the SIDA Grant as, in the Ad- ministrator's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the SIDA Grant. Section 2.04. The Closing Date shall be September 30, 1994 or such later date as the Administrator shall establish. The Administrator shall promptly notify the Grantee of such later date. ARTICLE III Execution of the Project Section 3.01. The Grantee declares its commitment to the objectives of the Project and, to this end, shall carry out the Project with due diligence and efficiency, and in conformity with appropriate administrative, engineering, environmental and financial practices. ARTICLE IV Financial Covenants Section 4.01. (a) The Grantee shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project. (b) The Grantee shall: (i) have the records and accounts referred to in paragraph (a) of this Section for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Administrator; (ii) furnish to the Administrator, as soon as available, but in any case not later than six months after the end of each such year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Administrator shall have reasonably requested; and (iii) furnish to the Administrator such other information concerning said records, accounts and the audit thereof as the Administrator shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Trust Account were made on the basis of statements of expenditure, the Grantee shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Administrator Page 4 has received the audit for the fiscal year in which the last withdrawal from the Trust Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Administrator's representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. ARTICLE V Representative; Transfer of Rights and Obligations Section 5.01. The Governor of Banco de Mocambique of the Grantee shall be the representative of the Grantee for the purposes of Section 11.03 of the General Conditions. Section 5.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Grantee: Banco de Mocambique Departamento de Relac