Conformed Copy - C3766 - Power Development Project - Project Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 3766 - NEP GRANT NUMBER H039 - NEP Project Agreement (Power Development Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and NEPAL ELECTRICITY AUTHORITY Dated July 9, 2003 Page 2 CREDIT NUMBER 3766 - NEP GRANT NUMBER H039 - NEP PROJECT AGREEMENT AGREEMENT, dated July 9, 2003, between INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and NEPAL ELECTRICITY AUTHORITY (NEA). WHEREAS (A) by the Development Financing Agreement of even date herewith between Kingdom of Nepal (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to fifty five million two hundred thousand Special Drawing Rights (SDR 55,200,000), on the terms and conditions set forth in the Development Financing Agreement, but only on condition that NEA 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 NEA, part of the proceeds of the Financing provided for under the Development Financing Agreement will be made available to NEA on the terms and conditions set forth in the Subsidiary Financing Agreement; and WHEREAS NEA, in consideration of the Association