Benin - Power Engineering And Technical Assistance : Credit 1189 - Project Agreement - 2 - Conformed

IAL CREDIT NUMBER 1189 BEN DOCUMPTS CREDIT NUMBER 1190 TO Project Agreement (Power Engineering and Technical Assistance Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and COMMUNAUTE ELECTRIQUE DU BENIN Dated , 1982 CREDIT NUMBER 1189 BEN CkEDIT NUMBER 1190 TO PROJECT AGREEMENT AGREEMENT, dated PIAX , 1982, between INTERNATIONAL DEVELOPMENT ASSOCIATIO (herein ter called the Association) and COMMUNAUTE ELECTRIQUE DU BENIN (hereinafter called CEB). WHEREAS (A) by development credit agreements of even date herewith between the People's Republic of Benin and the Republic of Togo, respectively, and the Association (hereinafter called the Benin Development Credit Agreement and the Togo Development Credit Agreement, respectively), the Association has agreed to make available to the People's Republic of Benin an amount in various currencies equivalent to one million seven hundred thousand Special Drawing Rights (SDR 1,700,000), and to the Republic of Togo an amount in various currencies equivalent to one million eight hundred thousand Special Drawing Rights (SDR 1,800,000) on the terms and conditions set forth in the Development Credit Agreements (as such term is defined hereinafter), but only on condition that CEB agree to undertake such obligations toward the Association as are hereinafter set forth; (B) by subsidiary loan agreements to be entered into between the People's Republic of Benin and the Republic of Togo, respectively, and CEB (the "Benin Subsidiary Loan Agreement" and the "Togo Subsidiary Loan Agreement", respectively), the proceeds of the credits provided for under the Development Credit Agree- ments will be made available to CEB on the terms and conditions therein set forth; (C) Parts B.1 (b), B.2 (b), B.3 (b), and C.1 of the Project will be carried out by the Compagnie Energie Electrique du Togo ("CEET") with the assistance of the Republic of Togo and CEB and, as part of such assistance, CEB will make available part of the funds received by it under the Togo Subsidiary Loan Agreement to CEET as hereinafter provided; (D) Parts B.1 (c), B.3 (c), and C.2 of the Project will be carried out by the Socifte Beninoise d'Electricitg et d'Eau ("SBEE") with the assistance of the People's Republic of Benin and CEB and, as part of such assistance, CEB will make available part of the funds received by it under the Benin Subsidiary Loan Agreement to SBEE as hereinafter provided; and WHEREAS CEB, in consideration of the Association's entering into the Development Credit Agreements has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: -2- ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Preamble, in Section 1.02 of the Togo Development Credit Agreement and the Benin Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth, and the following additional terms have the following meanings: (a) the term "Development Credit Agreements" means the Togo Development Credit Agreement and the Benin Development Credit Agreement; (b) the term "Credits" means the credits provided for under the Development Credit Agreements; (c) the term "Borrowers" means the People's Republic of Benin and the Republic of Togo, individually and not jointly; (d) the term "Subsidiary Loan Agreements" means the Benin Subsidiary Loan Agreement and the Togo Subsidiary Loan Agreement; and (e) the term "Financing Agreements" means the CEET Financing Agreement and the SBEE Financing Agreement. ARTICLE II Execution of the Project Section 2.01. (a) CEB shall carry out Parts A, B.1 (a), B.2 (a), B.3 (a), C.3 and C.4 of the Project described in Schedule 2 to the Development Credit Agreements with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and power utility practices, and shall provide, promptly as needed, the facilities, services and other resources required for the purpose. (b) Without limitation upon its obligations under paragraph (a) of this Section, CEB shall provide as and when needed, out of its own resources, the amounts necessary to cover all local expenditures for the Parts of the Project referred to in paragraph -3- (a) of this Section; for the purposes of this paragraph, the term "local expenditures" means expenditures for goods or services supplied from the territory of either one of the Borrowers. Section 2.02. (a) In order to assist CEB in carrying out Parts A.1, A.2, A.3, B.1 (a), B.3 (a), C.3 and C.4 of the Project, CEB shall employ engineering and power utility consultants whose qualifications, experience, and terms and conditions of employment shall be satisfactory to the Association. For the purpose of carrying out Part A.4 of the Project, CEB shall employ a panel of experts whose qualifications, experience, and terms and conditions of employment shall be satisfactory to the Association. (b) In order to assist CEB in carrying out Part B.2 (a) of the Project, CEB shall employ independent auditors acceptable to the Association. (c) CEB shall cooperate fully with the consultants and experts referred to in paragraph (a) of this Section and with the auditors referred to in paragraph (b) of this Section in the performance of their services for the Project and shall make available to them all information relevant to the Project. (d) CEB shall promptly furnish to the Association copies of the documents prepared for the Project by the consultants and experts referred to in paragraph (a) of this Section, including reports and drafts thereof, plans, designs, specifications, work schedules and estimates of costs, in such number as the Association shall reasonably request. (e) For the purpose of carrying out Part B.3 (a) of the Project, CEB shall select the consultants referred to in paragraph (a) of this Section in agreement with CEET and SBEE and in consul- tation with the Association. Section 2.03. Except as the Association may otherwise agree, CEB shall cause all services (including any goods provided for in the contracts for such services) financed out of the proceeds of the Credits to be used exclusively for the Project. Section 2.04. (a) CEB: (i) shall maintain records and procedures adequate to record and monitor the progress of the Project (including its cost and the benefits to be derived from it), to identify the services and goods financed out of the proceeds of the Credits, and to disclose their use in the Project; -4- (ii) shall enable the Association's accredited representatives to visit any facilities and sites relevant to the Project and to examine any relevant records and documents; and (iii) shall furnish to the Association at regular intervals all such informa- tion as the Association shall reasonably request concerning the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditures of such proceeds and the services and goods financed out of such proceeds. (b) Upon the award by CEB of any contract for services to be financed out of the proceeds of the Credits,-the Association may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (c) Promptly after completion of the Project, but in any event not later than six months after the Closing Date or such later date as may be agreed for this purpose between CEB and the Association, CEB shall prepare and furnish to the Association a report, of such scope and in such detail as the Association shall reasonably request, on the execution of the Project, its cost and the benefits derived and to be derived from it, the performance by CEB, CEET, SBEE and the Association of their respective obligations under the Project Agreement, the Subsidiary Loan Agreements, and the Financing Agreements and the accomplishment of the purposes of the Credits. (d) CEB shall enable the Association's representatives to examine all plants, installations, sites, works, buildings, property and equipment of CEB and any relevant records and documents. Section 2.05. CEB shall duly perform all its obligations under the Subsidiary Loan Agreements. Except as the Association shall otherwise agree, CEB shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving either of the Subsidiary Loan Agreements or any provision thereof. Section 2.06. (a) By financing agreements to be entered into between CEB and CEET and SBEE, respectively, on terms and condi- tions which shall have been approved by the Association and which shall include, inter alia, those set forth in the Schedule to this Agreement, CEB shall make available to CEET $510,000 equivalent of the funds made available to it pursuant to the Togo Subsidiary Loan Agreement and to SBEE $340,000 equivalent of the funds made available to it purs-uant to the Benin Subsidiary Loan Agreement. - 5 - (b) CEB shall exercise its rights under the CEET Financing Agreement and the SBEE Financing Agreement in such manner as to protect the interests of the Republic of Togo and the People's Republic of Benin, respectively, the Association and CEB, and to accomplish the purposes of the Development Credit Agreements, and except as the Association shall otherwise agree, CEB shall not assign, amend, abrogate, or waive either of the Financing Agreements or any provision thereof. Section 2.07. (a) CEB shall, at the request of the Association, exchange views with the Association with regard to the progress of the Project, the performance of its obligations under this Agreement, the Subsidiary Loan Agreements and the Financing Agreements, and other matters relating to the purposes of the Credits. (b) CEB shall promptly inform the Association of any condi- tion which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Credits, or the performance by CEB of its obligations under this Agreement, the Subsidiary Loan Agreements, or the Financing Agreements. ARTICLE III Management and Operations of CEB Section 3.01. (a) CEB shall at all times manage its affairs in accordance with appropriate administrative, commercial, financial, engineering and power utility practices, with experienced and competent management and with competent staff in adequate numbers. (b) Without limitation to the generality of paragraph (a) of this Section, CEB shall operate and maintain its equipment, machinery and facilities, and shall make all necessary renewals and repairs thereof, in accordance with appropriate engineering and power utility practices. Section 3.02. (a) In accordance with the terms of the Accord referred to in Section 1.02 (a) of the Development Credit Agreements, CEB shall take all steps necessary to maintain its legal existence and right to carry on its operations and shall take all steps necessary to acquire, maintain and renew such licenses, consents, franchises or other rights as may be necessary or useful for its operations. -6- (b) Except as the Association shall otherwise agree, CEB shall not sell, lease, transfer or otherwise dispose of any of its property or assets which shall be required for the efficient conduct of its operations. Section 3.03. CEB shall take out and maintain with responsible insurers, or make other provision satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. ARTICLE IV Financial Covenants Section 4.01. CEB shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. Section 4.02. CEB shall: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each Fiscal Year starting with Fiscal Year 1980 audited, in accordance with appropriate auditing principles consistently applied, by independent auditors accept- able to the Association; (ii) furnish to the Association as soon as available, but in any case not later than six months after the end of each such year (except for Fiscal Year 1980, for which the documents specified hereafter shall be furnished by January 1, 1982), (A) certified copies of its financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; (iii) furnish to the Association such other information concerning the accounts and financial statements of CEB and the audit thereof as the Association shall from time to time reasonably request; and (iv) furnish to the Association such information and documentation as the Association may reasonably request with respect to the review of CEB's accounting system and procedures provided for under Part B.2 (a) of the Project. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreements become effective. -7- Section 5.02. (a) This Agreement and all obligations of the Association and of CEB thereunder shall terminate on the earlier of the following two dates: (i) the date on which either the Togo Development Credit Agreement or the Benin Development Credit Agreement shall terminate in accordance with its terms, provided that the other of the said Agreements shall have terminated theretofore or shall terminate on the same date; or (ii) a date ten years after the date of this Agreement. (b) If both the Togo Development Credit Agreement and the Benin Development Credit Agreement terminate in accordance with their terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify CEB of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. ARTICLE VI Miscellaneous Provisions Section 6.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified. or at such other address as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America -8- Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For CEB: Communaute Electrique du B&nin Direction G&nerale Rue de 1'Hopital B.P. 1368 Lome, Togo Cable address: BENELEC Lome, Togo Section 6.02. Any action required or permitted to be taken, and any document required or permitted to be executed under this Agreement on behalf of CEB, and any action required or permitted to be taken by CEB under the provisions of Section 2.08 of each of the Development Credit Agreements, may be taken or executed by the General Manager of CEB or such other person or persons as he shall designate in writing, and CEB shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 6.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District - 9 - of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL DEVELOPMENT ASSOCIATION By DCA A V3V, Regional Vice President Western Africa COMMUNAUTE ELECTRIQUE DU BENIN ByK Authorized Representative By Auth rized Representative - 10 - SCHEDULE Terms and Conditions of the Financing Agreements (Section 2.06 (a)) For the purposes of this Schedule, the expression "CEET and SBEE" means CEET and SBEE individually and not jointly, and the term "Grants" means the amounts to be made available to CEET and SBEE under their respective Financing Agreements. The Financing Agreements shall include, inter alia, the following terms: 1. CEET and SBEE may withdraw the proceeds of the Grants only for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of services (including any goods included in the contracts for such services) required for their respective Parts of the Project and which are eligible for financing under the Togo Development Credit Agreement and the Benin Development Credit Agreement, respectively. With- drawal requests shall be made in such form as shall be specified by CEB and CEET's and SBEE's right to withdraw the proceeds of the respective Grants shall be subject to CEB's own right to withdraw the funds to be made available to it under the Subsidiary Loan Agreements. 2. CEET shall carry out Parts B.1 (b), B.2 (b), B.3 (b) and C.1 of the Project and SBEE shall carry out Parts B.1 (c), B.3 (c) and C.2 of the Project, all with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and power utility practices. CEET and SBEE shall provide as and when needed, out of their own resources, the amounts necessary to cover all local expenditures for their respective Parts of the Project. 3. (a) In order to assist CEET and SBEE in carrying out their respective Parts of the Project (except for Part B.2 (b) for CEET), CEET and SBEE shall employ engineering and power utility consultants whose qualifications, experience and terms and condi- tions of employment shall be satisfactory to the Association. (b) In order to assist CEET in carrying out Part B.2 (b) of the Project, CEET shall employ independent auditors acceptable to the Association. - 11 - (c) CEET and SBEE shall cooperate fully with said consultants and auditors and shall make available to them all information relevant to their respective Parts of the Project. (d) CEET AND STIEE shall promptly furnish to the Association copies of the documents prepared for the Project by the consultants referred to in paragraph (a) of this Section, including reports and drafts thereof, plans, designs, specifications, work schedules and estimates of costs, in such number as the AssOciation shall reasonably request. (e) CEET shall cause the auditors referred to in paragraph (b) of this Section to furnish to the Association: (i) as soon as available (A) certified copies of its financial statements for Fiscal Year 1980 as audited in accordance with appropriate audit- ing principles consistently applied, and (B) the report of such audit, of such scope and in such detail as the Association shall have reasonably requested; (ii) such other information concerning the accounts and financial statements of CEET and the audit thereof as the Association shall reasonably request; and (iii) copies of the documents prepared by the auditors with respect to their review of CEET's accounting system and procedures, including reports and drafts thereof, in such number as the Association shall reasonably request. (f) For the purpose of carrying out Parts B.3 (b) and B.3 (c) of the Project, CEET and SBEE shall select the consultants referred to in paragraph (a) hereof in agreement with each other and CEB and in consultation with the Association. 4. (a) CEET and SBEE: (i) shall maintain records and procedures adequate to monitor the progress of their respective Parts of the Project (including their cost and the benefits to be derived from them), to identify the services and goods financed out of the proceeds of the Grants and to disclose their use in the Project; (ii) shall enable the Association's accredited representatives to visit the facilities included in their respective Parts of the Project and to examine any relevant records and documents; and (iii) shall furnish to the Association at regular intervals all such information as the Association shall reasonably request concerning their Parts of the Project, their cost and, where appropriate, the benefits to be derived from them, the expenditures of such proceeds and the services and goods financed out of such proceeds. - 12 - (b) Upon the award by CEET and SBEE of any contract for services to be financed out of the proceeds of the Grants, the Association may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (c) CEET and SBEE shall assist CEB in the preparation of the Project completion report referred to in Section 2.04 (c) of this Agreement with respect to their respective Parts of the Project. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the day of 198. FOR SECRETARY