Conformed Copy - C2338 - Urban Rehabilitation and Management Project - Amendment

Page 1 July 30, 1993 H.E. Paul Dossou Minister of Finance Cotonou Republic of Benin Re: Credit No. 2338 BEN (Urban Rehabilitation and Management Project) Amendment to the Development Credit Agreement Excellency: Please refer to the Development Credit Agreement between the Republic of Benin (the Borrower) and the International Development Association (the Association) dated May 11, 1992 (the Development Credit Agreement) for the above-mentioned Project, and to your letter dated May 17, 1993 requesting certain changes in the mobilization of funds destined to the Project. We are pleased to inform you that the Association accedes to this request and, consequently, proposes to hereby amend the Development Credit Agreement as follows: 1. Section 1.01 (k) is amended to read: "(k) 'Special Account 'A' and Special Account 'B' mean the accounts referred to in Section 2.02 (b) of this Agreement; and SGSA 'AA' and SGSA 'BB' mean the Second Generation Special Accounts referred to in Section 2.02 (c) of this Agreement." 2. Section 2.02 (b) is amended to read: "(b) The Borrower shall, for the purposes of the Project, open and maintain in Francs CFA two special deposit accounts, Special Account 'A' and Special Account 'B', each in the Banque Centrale des Etats de 1'Afrique de l'Quest, on terms and conditions satisfactory to the Association. Deposits into, and withdrawals out of Special Accounts 'A' and 'B' shall be made in accordance with the provisions of Schedules 4 and 5 to this Agreement, respectively." 3. A new Section is inserted after Section 2.02 (b) to read as follows: "(c) The Borrower shall, for the purposes of the Project and through each Subsidiary Agreement cause AGETUR and SERHAU-SEM to open and maintain two special deposit accounts (SGSA 'AA' and SGSA 'BB', respectively) in a commercial bank or banks acceptable to the Association on terms and conditions satisfactory to the Association (including appropriate protection against set-off, seizure or attachment). Deposits into, and payments out of, SGSA 'AA' and SGSA 'BB' shall be made in accordance with the provisions of Schedules 4 and 5 to this Agreement, respectively." 4. Section 2.02 (c) is.renumbered 2.02 (d). 5. Section 3.01 (b) (i) is amended to read: "(i) delegation of authority for all procurement actions and for award and signature of contracts, as well as for payment of contracts and preparation of disbursement requests to be signed by the Borrower for presentation to the Association." 6. Section 4.01 (a) is amended to read: "(a) The Borrower shall, and shall cause, AGETUR and SERHAU-SEM, as appropriate, to maintain the records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project of the departments or agencies of the Page 2 Borrower responsible for carrying out the Project or any part thereof, and the operations and financial conditions of AGETUR and SERHAU-SEM." 7. Section 4.01 (b) is amended by the addition of the words "or shall" after the word "shall" appearing therein. 8. Section 4.01 (b) (i) is amended by the addition of the words "and for SGSA 'AA' and SGSA 'BB"' after the words "Special Accounts 'A' and 'B' appearing therein. 9. Section 4.01 (c) (ii) is amended by the deletion of the words "out of the Special Accounts 'A' and 'B'" and the substitution thereof of the words "SGSA 'AA' and SGSA 'BB'". 10. Schedule 3: 10.1 Part E.2 (a) is amended by the deletion of the words "the Special Accounts A and B" and the substitution thereof of the words "SGSA 'AA' and SGSA 'BB'" and the deletion of the words "Special Accounts A and B" and the substitution thereof of the words "SGSA 'AA' and SGSA 'BB'". 10.2 Part E.2 (c) is amended by the deletion of the words "the Special Accounts A and B" and the substitution thereof of the words "SGSA 'AA' and SGSA 'BB'". 11. Schedule 4 and Schedule 5 are amended to read in their entirety as set out in Attachments I and 2 to this letter, respectively. 12. In order to take into account the delay in commencement of Project implementation, Section 3.04 is amended by the deletion of the date appearing therein and the substitution therefor of the date "June 30, 1995". If you agree to such amendment, please indicate such agreement by signing and dating the enclosed duplicate original of this letter in the space provided below and returning it to us for our records. This amendment shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Sincerely yours, Olivier Lafourcade Director Occidental and Central Africa Department CONFIRMED: Paul Dossou Date: August 3, 1993 SCHEDULE 4 Special Account "A" and SGSA "AA" 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories 1, 2 (a), 3 (a) and 4 (a) set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (b) the term "eligible expenditures" means expenditures in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit allocated from time to time to the eligible Categories in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount equivalent to CFAF Page 3 290,000,000 to be withdrawn from the Credit Account and deposited into Special Account "A" pursuant to paragraph 3 (a) of this Schedule. 2. The Borrower shall transfer any amount deposited into Special Account "A" from the Credit Account into SGSA "AA" within seven days of the deposit of such amount into Special Account "A". No other payments shall be made out of Special Account "A". Payments out of SGSA "AA" shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Association has received evidence satisfactory to it that Special Account "A" and SGSA "AA." have been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish Special Account "A" shall be made as follows: (a) For withdrawals of the Authorized Allocation, the Borrower shall furnish to the Association a request or requests prepared by AGETUR for a deposit or deposits which do not exceed the aggregate amount of the Authorized Allocation. On the basis of such request or requests, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into Special Account "A" such amount or amounts as the Borrower shall have requested. (b) (i) For replenishment of Special Account "A", the Borrower shall furmish to the Association requests prepared by AGETUR for deposits into Special Account "A" at such intervals as the Association shall specify. (ii) Prior to or at the time of each such request, the Borrower shall furnish to the Association the documents and other evidence required pursuant to paragraph 4 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into Special Account "A" such amount as the Borrower shall have requested and as shall have been shown by said documents and other evidence to have been paid out of SGSA "AA" for eligible expenditures. All such deposits shall be withdrawn by the Association from the Credit Account under the respective eligible Categories, and in the respective equivalent amounts, as shall have been justified by said documents and other evidence. 4. For each payment made by AGETUR out of SGSA "AA", the Borrower shall, at such time as the Association shall reasonably request, furnish to the Association such documents and other evidence showing that such payment was made exclusively for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Schedule, the Association shall not be required to make further deposits into Special Account "A": (a) if, at any time, the Association shall have determined that all further withdrawals should be made by the Borrower directly from the Credit Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or (b) once the total unwithdrawn amount of the Credit allocated to the eligible Categories, less the amount of any outstanding special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions, shall equal the equivalent of twice the amount of the Authorized Allocation. Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit shall follow such procedures as the Association shall specify by notice to the Borrower. Such further withdrawals shall be made only after and to the extent that the Association shall have been satisfied that all such amounts remaining on deposit in Special Account "A" and SGSA "AA" as of the date of such notice will be utilized in making payments for eligible expenditures. 6. (a) If the Association shall have determined at any time that any payment out of SGSA "AA": (i) was made for an expenditure or in an amount not eligible pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association: (A) provide such additional evidence as the Association may request; Page 4 or (B) deposit into SGSA "AA" (or, if the Association shall so request, refund to the Association) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. Unless the Association shall otherwise agree, no further deposit by the Association into Special Account "A" shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association shall have determined at any time that any amount outstanding in Special Account "A" or in SGSA "AA" will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in Special Account "A" or in SGSA "AA". (d) Refunds to the Association made pursuant to paragraph 6 (a), (b) and (c) of this Schedule shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions. SCHEDULE 5 Special Account "B" and SGSA "BB" 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories 2 (b), 3 (b) and 4 (b) set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (b) the term "eligible expenditures" means expenditures in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit allocated from time to time to the eligible Categories in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount equivalent to CFAF 87,000,000 to be withdrawn from the Credit Account and deposited into Special Account "B" pursuant to paragraph 3 (a) of this Schedule. 2. The Borrower shall transfer any amount deposited into Special Account "B" from the Credit Account into SGSA "BB" within seven days of the deposit of such amount into Special Account "B". No other payments shall be made out of Special Account "B". Payments out of SGSA "BB" shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Association has received evidence satisfactory to it that Special Account "B" and SGSA "BB" have been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish Special Account "B" as follows: (a) For withdrawals of the Authorized Allocation, the Borrower shall furnish to the Association a request or requests prepared by SERHAU-SEM for a deposit or deposits which do not exceed the aggregate amount of the Authorized Allocation. On the basis of such request or requests, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into Special Account "B" such amount or amounts as the Borrower shall have requested. (b) (i) For replenishment of Special Account "B", the Borrower shall furnish to the Association requests prepared by SERHAU-SEM for deposits into Special Account "B" at such intervals as the Association shall specify. (ii) Prior to or at the time of each such request, the Borrower shall furnish to the Association the documents and other evidence required pursuant to paragraph 4 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into Special Account "B" such amount as the Borrower shall have requested and as shall have been shown by said documents and other evidence to have been paid out of SGSA "BB" for eligible expenditures. Page 5 All such deposits shall be withdrawn by the Association from the Credit Account under the respective eligible Categories, and in the respective equivalent amounts, as shall have been justified by said documents and other evidence. 4. For each payment made by SERHAU-SEM out of SGSA "BB", the Borrower shall, at such time as the Association shall reasonably request, furnish to the Association such documents and other evidence showing that such payment was made exclusively for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Schedule, the Association shall not be required to make further deposits into Special Account "B": (a) if, at any time, the Association shall have determined that all further withdrawals should be made by the Borrower directly from the Credit Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or (b) once the total unwithdrawn amount of the Credit allocated to the eligible Categories, less the amount of any outstanding special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions, shall equal the equivalent of twice the amount of the Authorized Allocation. Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit shall follow.such procedures as the Association shall specify by notice to the Borrower. Such further withdrawals shall be made only after and to the extent that the Association shall have been satisfied that all such amounts remaining on deposit in Special Account "B" as of the date of such notice will be utilized in maldng payments for eligible expenditures. 6. (a) If the Association shall have determined at any time that any payment out of SGSA "BB": (i) was made for an expenditure or in an amount not eligible pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association: (A) provide such additional evidence as the Association may request; or (B) deposit into SGSA "BB" (or, if the Association shall so request, refund to the Association) an amount equal to the amount of such payment or the portion thereof not so eligible orjustified. Unless the Association shall otherwise agree, no further deposit by the Association into Special Account "B" shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association shall have determined at any time that any amount outstanding in Special Account "B" or SGSA "BB" will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in Special Account "B" or in SGSA "BB". (d) Refunds to the Association made pursuant to paragraph 6 (a), (b) and (c) of this Schedule shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions.