Conformed Copy - C3588 - Energy for Rural Transformation Project - BOU Project Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 3588 UG BOU Project Agreement (Energy for Rural Transformation Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and BANK OF UGANDA Dated December 20, 2001 CREDIT NUMBER 3588 UG BOU PROJECT AGREEMENT AGREEMENT, dated December 20, 2001, between INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and BANK OF UGANDA (BOU). WHEREAS (A) by the Development Credit Agreement of even date herewith between the Republic of Uganda (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to thirty-eight million three hundred thousand Special Drawing Rights (SDR 38,300,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that BOU agrees to undertake such obligations toward the Association as are set forth in this Agreement; (B) by a subsidiary financing agreement to be entered into between the Borrower and BOU (the BOU Subsidiary Financing Agreement), a portion of the proceeds of the credit provided for under the Development Credit Agreement will be made available to BOU on the terms and conditions set forth in the BOU Subsidiary Financing Agreement; and WHEREAS BOU, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Unless the context otherwise requires, the several terms defined in the Development Credit Agreement, the Preamble to this Agreement and in the General Page 2 Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of Part G.2 (a) of the Project; Management and Operations of BOU Section 2.01. (a) BOU declares its commitment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement and, to this end, shall carry out, or cause to be carried out, Part G.2 (a) of the Project and conduct its operations and affairs, in accordance with sound financial standards and practices, with qualified and experienced management and in accordance with BOU