Conformed Copy - TF021936 - Demonstration Project for the Phaseout of Ozone Depleting Substances - Ozone Projects Trust Fund Grant Agreement

Page 1 CONFORMED COPY OTF GRANT NUMBER TF 021936 Ozone Projects Trust Fund Grant Agreement (Demonstration Project for the Phaseout of Ozone Depleting Substances) between REPUBLIC OF TUNISIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT acting as Trustee of the Ozone Projects Trust Fund Dated June 14, 1994 OTF GRANT NUMBER TF 021936 OZONE PROJECTS TRUST FUND GRANT AGREEMENT AGREEMENT, dated June 14, 1994, between the REPUBLIC OF TUNISIA (the Recipient) and the INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT, acting as Trustee of grant funds provided by Parties to the Montreal Protocol on Substances that Deplete the Ozone Layer into the Ozone Projects Trust Fund (OTF) (the Trustee). WHEREAS (A) the International Bank for Reconstruction and Development (the Bank) pursuant to Resolution No. 91-5 of March 14, 1991, of the Executive Directors of the Bank (the Resolution), established a Facility, including the OTF, to assist in the protection of the global environment and promote thereby environmentally sound and sustainable economic development; WHEREAS (B) the Parties to the Montreal Protocol on Substances that Deplete the Ozone Layer to the Vienna Convention for the Protection of the Ozone Layer have established the Multilateral Fund (Fund) for the Implementation of the Montreal Protocol to operate under the authority of the said Parties to provide the financing of agreed incremental costs to enable the Parties operating under paragraph 1 of Article 5 of the Protocol to comply with control measures provided for in the Protocol; WHEREAS (C) the Executive Committee of the Fund and the Bank have entered into an agreement effective on July 9, 1991, pursuant to which the Executive Committee has agreed to provide funds into the OTF to be administered by the Bank as Trustee in accordance with the provisions of the said agreement and the Resolution; Page 2 WHEREAS (D) the Recipient, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested assistance from the resources of the OTF in the financing of the Project, and the Trustee has determined that such assistance would be in accordance with the provisions of the Resolution; WHEREAS the Trustee has agreed, on the basis, inter alia, of the foregoing, to extend a grant (the OTF Grant) to the Recipient upon the terms and conditions set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. (a) The following provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated January 1, 1985, with the modifications set forth in paragraph (b) of this Section (the General Conditions) constitute an integral part of this Agreement: (i) Article I; (ii) Sections 2.01 (1), (2), (3), (4), (6), (8), (9), (10), (11), (15), (18) and (20), 2.02 and 2.03; (iii) Section 3.01; (iv) Section 4.01 and the first sentence of Section 4.09; (v) Article V; (vi) Sections 6.01, 6.02 (c), (d), (e), (f), (i) and (k), 6.03, 6.04 and 6.06; (vii) Section 8.01 (b); (viii)Sections 9.01 (a) and (c), 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09; (ix) Sections 10.01, 10.03 and 10.04; and (x) Article XI. (b) The General Conditions shall be modified as follows: (i) the term "Bank", wherever used in the General Conditions, other than in Sections 2.01 (8) and 6.02 (f) thereof and the last use of such term in Section 5.01 thereof, means the Trustee except that in Section 6.02, the term "Bank" shall also include the International Bank for Reconstruction and Development acting in its own capacity; (ii) the term "Borrower", wherever used in the General Conditions, means the Recipient; (iii) the term "Loan Agreement", wherever used in the General Conditions, means this Agreement; (iv) the term "Loan" and "loan" wherever used in the General Conditions, means the OTF Grant; and (v) the term "Loan Account" wherever used in the General Conditions, means the OTF Grant Account. Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions and in the Recitals to this Agreement have the respective meanings therein set forth; and the following additional terms have the following meanings: (a) "ANPE" means the Recipient's National Agency for Environmental Protection (Agence Nationale de Protection de l'Environnement), an industrial and commercial public institution established and operating pursuant to the Recipient's Law No. 88-91 Page 3 dated August 2, 1988, as amended by the Recipient's Law No. 92-115 dated November 30, 1992, and the Recipient's Decree No. 88-1784 dated October 18, 1988, as amended by the Recipient's Decree No. 93-335 dated February 8, 1993; (b) "Category" means a category of items to be financed out of the proceeds of the OTF Grant as set forth in the table in paragraph 1 of Schedule 1 to this Agreement, and the term "Categories" means more than one Category collectively; (c) "Central Bank" means the Central Bank of Tunisia (Banque Centrale de Tunisie), established and operating pursuant to the Recipient's Law No. 58-90 dated September 19, 1958, as the same may be amended from time to time; (d) "CFC" means chlorofluorocarbons; (e) "Country Program" means the Recipient's draft Country Program for the Phaseout of Ozone Depleting Substances setting forth policy actions and proposing projects aimed to the phaseout of CFC by the year 2006; (f) "Eligible Beneficiary" means a beneficiary enterprise listed in Schedule 5 to this Agreement or any other enterprise as shall be agreed upon between the Trustee and ANPE, which meet eligibility criteria satisfactory to the Trustee and with which ANPE proposes to enter into a Sub-project Agreement (as hereinafter defined); (g) "Environmental Action Plan" means the Recipient's Environmental Action Plan developed in 1990 setting forth the Recipient's overall country environmental strategy; (h) "FY" or "Fiscal Year" means the twelve (12) month period corresponding to any of the Recipient's fiscal years, which period commences on January 1 and ends on December 31 in each calendar year; (i) "HFC" means hydrofluorocarbon; (j) "HCFC" means hydrochlorofluorocarbon; (k) "ODS" means ozone depleting substances; (l) "OPIU" means the Ozone Project Implementation Unit to be established by ANPE pursuant to Part B of the Project; (m) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement; (n) "Sub-project Agreement" means an agreement: (i) to be entered into between ANPE and an Eligible Beneficiary in accordance with the provisions of Section B of Schedule 4 to this Agreement; and (ii) under which ANPE shall make equipment, materials and technical assistance available to the Eligible Beneficiary utilizing the proceeds of the OTF Grant for the purposes of carrying out a Sub-project; and (o) "Sub-project" means a specific activity aimed at phasing out ODS in the Recipient's territory to be carried out by an Eligible Beneficiary under Part A of the Project. ARTICLE II The OTF Grant Section 2.01. The Trustee agrees to make available to the Recipient, on the terms and conditions set forth or referred to in this Agree-ment, the OTF Grant in an amount in various currencies equivalent to one million seven hundred ninety thousand dollars ($1,790,000). Section 2.02. (a) The amount of the OTF Grant may be withdrawn from the OTF Grant Account in accordance with the provisions of Schedule 1 to this Agreement for expenditures made (or, if the Trustee shall so agree, to be made) in respect of the reasonable cost of goods and services required for carrying out the Project and to be financed out of the proceeds of the OTF Grant. (b) The Recipient shall, for the purposes of the Project, open and maintain in dollars a special deposit account in its Central Bank on terms and conditions satisfactory to the Trustee. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 6 to this Agreement. Page 4 Section 2.03. The Closing Date shall be December 31, 1997 or such later date as the Trustee shall establish. The Trustee shall promptly notify the Recipient of such later date. Section 2.04. The Trustee shall not be obligated to make any payment under this Agreement except to the extent it shall have received funds for the purposes of the Project from the Executive Committee referred to in WHEREAS Clause (C) of the Preamble to this Agreement. ARTICLE III Execution of the Project Section 3.01. (a) The Recipient declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement, and, to this end, shall carry out the Project through ANPE with due diligence and efficiency and in conformity with appropriate administrative, engineering, environmental, financial, stratospheric ozone layer protection management and technical practices and with due regard to ecological and environmental factors, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) The Recipient shall promptly make the proceeds of the OTF Grant available to ANPE on a grant basis under arrangements satisfactory to the Trustee. (c) Without limitation upon the provisions of paragraphs (a) and (b) of this Section and except as the Recipient and the Trustee shall otherwise agree, the Recipient shall carry out the Project through ANPE in accordance with the Implementation Program set forth in Schedule 5 to this Agreement. Section 3.02. Except as the Trustee shall otherwise agree, procurement of the goods and consultants' services required for the Project and to be financed out of the proceeds of the OTF Grant shall be governed by the provisions of Schedule 3 to this Agreement. ARTICLE IV Financial and Other Covenants Section 4.01. (a) The Recipient shall maintain, or cause the ANPE to maintain, records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project. (b) The Recipient: (i) shall have, or cause ANPE to have, the records and accounts referred to in paragraph (a) of this Section, including those for the Special Account, for each Fiscal Year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Trustee; (ii) shall furnish, or cause ANPE to furnish, to the Trustee as soon as available, but in any case not later than six (6) months after the end of each such year, the report of such audit by said auditors, of such scope and in such detail as the Trustee shall have reasonably requested; and (iii) shall furnish, or cause ANPE to furnish, to the Trustee such other information con-cerning said records and accounts and the audit thereof as the Trustee shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the OTF Grant Account were made on the basis of statements of expenditure, the Recipient: (i) shall maintain, or cause ANPE to maintain, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) shall retain, or cause ANPE to retain, until at least one year after the Trustee has received the audit report for the Fiscal Year in which the last withdrawal from the OTF Grant Account was made, all records (contracts, orders, invoices, bills, receipts Page 5 and other documents) evidencing such expenditures; (iii) shall enable, or cause ANPE to enable, the Trustee's representatives to examine such records; and (iv) shall ensure, or cause ANPE to 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. Section 4.02. (a) In order to secure eligibility in the future for financing of additional ODS phaseout activities, the Recipient shall take, or cause to be taken, all adequate action required to ensure that the Country Program is finalized and submitted to the Executive Committee of the Fund not later than December 31, 1994. (b) Thereafter, the Recipient shall take all measures necessary to ensure that the recommendations of the Country Program as shall have been approved by the Executive Committee of the Fund shall be suitably incorporated into the next update of the Environmental Action Plan. Section 4.03. The Recipient shall waive all taxes and duties applicable to items to be financed out of the proceeds of the OTF Grant. ARTICLE V Effectiveness; Termination Section 5.01. The Grant Agreement shall enter into effect on the date upon which the Trustee is satisfied the Agreement is fully executed and has dispatched to the Recipient notice of effectiveness. Effectiveness will take place when the Trustee is satisfied that ANPE has appointed the Project Manager referred to in Section A.2 of Schedule 4 to this Agreement under terms of reference satisfactory to the Trustee and the Trustee has dispatched to the Recipient notice of effectiveness. Section 5.02. This Agreement shall continue in effect until the OTF Grant has been fully disbursed and the parties to this Agreement have fulfilled all their obligations hereunder. ARTICLE VI Representative of the Recipient; Addresses Section 6.01. The Minister of International Cooperation and Foreign Investment of the Recipient is designated as representative of the Recipient for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Recipient: Ministry of International Cooperation and Foreign Investment 149, Avenue de la Libert