Djibouti - Geothermal Exploration Project : Credit 1488 - Project Agreement - Conformed

CREDIT NUMBER 1488 DJI SOFFI CIAL DOCUNIENTS Project Agreement (Geothermal Exploration Project) among INTERNATIONAL DEVELOPMENT ASSOCIATION and INSTITUT SUPERIEUR D'ETUDES ET DE RECHERCHES SCIENTIFIQUES ET TECHNIQUES and ELECTRICITE DE DJIBOUTI Dated , 1984 CREDIT NUMBER 1488 DJI PROJECT AGREEMENT AGREEMENT, dated , 1984, among INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Asscciation), INSTITUT SUPERIEUR D'ETUDES ET DE RECHERCHES SCIENTIFIQUES ET TECHNIQUES (hereinafter called ISERST), and ELECTRICITE DE DJIBOUTI (hereinafter called EDD). WHEREAS by the Development Credit Agreement of even date herewith between Republic of Djibouti (hereinafter called the Borrower or Djibouti) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to five million seven hundred thousand Special Drawing Rights (SDR 5,700,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that ISERST and EDD agree to undertake such obligations toward the Association as are hereinafter set forth; WHEREAS ISERST and EDD, in consideration of the foregoing, have agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II kxecution of the Project Section 2.01. (a) Each of ISERST and EDD declares its com- mitment to the objectives of the Project as set forth in Sched- ule 2 to the Development Credit Agreement, and, to this end, ISERST shall carry out Parts A, B and C of the Project and EDD Part D of the Project described in said Schedule with due dili- gence and efficiency and in conformity with appropriate admini- strative, financial and engineering practices. -2- (b) (i) ISERST shall spud each of the exploratory wells under Part A of the Project only as and when the Association shall have reviewed and approved both the site selection of, and the drilling program for, such well. (ii) It is further specified that the Association's approval of the site selection of the second of such wells shall be required before ISERST may spud the first of such wells. (c) ISERST shall, until completion of the Project, continue to employ a Geothermal Project Manager whose qualifications, experience and terms and conditions of employment shall be satis- factory to the Association. (d) EDD shall initiate Part D of the Project, as and when at least two wells under Part A of the Project shall, after appropriate testing, have shown productive results. (e) (i) As and when a discovery of geothermal sources shall have been made in the Hanle-Gaggade area, ISERST shall seek the views of the Association as to the commerciality of such discovery and ISERST's proposals to eventually develop such a field. (ii) As and when such a discovery shall have been determined to be commercial, taking into account the A,ociation's views and the results of the studies included in Part D of the Project, ISERST and EDD shall each take all appropriate steps, in cooperation with the Borrower, to ensure that the actions referred to in Section 3.02 of the Development Credit Agreement may be promptly completed in a manner satisfactory to the Association. Section 2.02. (a) In order to assist ISERST in carrying out Part C (f) of the Project, ISERST shall, by June 30, 1984, employ consultants whose qualifications, experience and terms and condi- tions of employment shall be satisfactory to the Association, such consultants to be selected in accordance with principles and procedures satisfactory to the Association on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers -3- and by the World Bank as Executing Agency" published by the Bank in August 1981. (b) In order to assist ISERST in carrying out Part C (b) of the Project, ISERST shall employ consultants whose qualifica- tions, experience and terms and conditions of employment shall be satisfactory to the Association. (c) In order to assist ISERST in carrying out the Project (with the exception of Part C (b) and (f) thereof), ISERST shall, as and when needed, employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and works required for the Proj- ect and to be financed out of the proceeds of the Credit shall be governed by the provisions of the Schedule to this Agreement. Section 2.04. (a) ISERST undertakes to insure, or make ade- quate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit made available to it by the Borrower against hazards incident to the acquisition, transportation and delivery thereof to the place of use or in- stallation, and for such insurance any indemnity shall be payable in a currency freely usable by ISERST to replace or repair such goods. (b) ISERST shall cause all goods and services financed out of the proceeds of the Credit made available to it by the Borrower to be used exclusively for the purposes of the Project. Section 2.05. (a) ISERST shall furnish to the Association, promptly upon their preparation, the plans, specifications, reports, contract documents and work and procurement schedules of the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) (i) ISERST shall: (A) maintain records and procedures adequate to record and monitor the progress of the Project (including its cost and the benefits to be derived therefrom), to identify the goods and services financed out of the proceeds of the Credit, and to disclose their use in the Project; -4- (B) enable the Association's representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; and (C) furnish to the Association at regular intervals all such information (including quarterly and annual reports prepared according to a format acceptable to the Association) as the Association shall reasonably request concerning the Project, its cost and, where appropriate, the benefits to be derived therefrom, the expenditures of such proceeds and the goods and services financed out of such proceeds. (ii) EDD shall provide ISERST with all necessary assistance in the preparation of the quarterly and annual reports referred to in sub-paragraph (b) (i) (C) above. (c) Upon the award by ISERST of any contract for goods, works or services to be financed out of the proceeds of the Credit, the Association may publish & description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (d) (i) Promptly after completion of the Project, but in in any event not later than six months after the Closing Date or such later date as may be agreed for this purpose between ISERST and the Association, ISERST 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 and initial operation of the Project, its cost and the benefits derived and to be derived from it, the performance by ISERST, EDD and the Association of their respective obligations under the Project Agreement and the accomplishment of the purposes of the Credit. (ii) EDD shall provide ISERST with all necessary assistance in the preparation of the completion report referred to in sub-paragraph (d) (i) above. (e) ISERST shall enable the Association's representatives to examine all its installations, sites, works, buildings, property and equipment and any relevant records and documents. -5- Section 2.06. (a) ISERST and EDD shall each, at the request of the Association, exchange views with the Association with regard to the progress of Parts A, B and C of the Project (as regards ISERST) and Part D of the Project (as regards EDD), the performance of their respective obligations under this Agreement and other matters relating to the purposes of the Credit. (b) ISERST and EDD shall each promptly inform the Association of any condition which interferes or threatens to interfere with the progress of Parts A, B and C of the Project (as regards ISERST) and Part D of the Project (as regards EDD), the accomplishment of the purposes of the Credit, or the performance by ISERST and EDD of their respective obligations under this Agreement. ARTICLE III Management and Operations of ISERST and EDD Section 3.01. ISERST and EDD shall each carry on its opera- tions and conduct its affairs in accordance with sound adminis- trative, financial and engineering practices under the supervi- sion of qualified and experienced management (including the Geo- thermal Project Manager, as regards ISERST) assisted by competent staff in adequate numbers. Section 3.02. ISERST shall at all times operate and maintain its machinery, equipment and other property, and from time to time, promptly as needed, make all necessary repairs and renewals thereof, all in accordance with sound engineering and financial practices. Section 3.03. ISERST shall take out and maintain with responsible insurers, or make other provisions 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. ISERST shall maintain records adequate to reflect, in accordance with consistently maintained appropriate accounting practices, its operations and financial condition, C -6- including, without limitation to the foregoing, separate accounts reflecting all expenditures of the Project. Section 4.02. ISERST shall: (a) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) and the separate accounts of the Project for each fiscal year audited, in accordance with appropriate auditing principles con- sistently applied, by independent auditors acceptable to the Association; (b) furnish to the Association as soon as available, but in any case not later than four months after the end of each such year, (i) certified copies of its financial statements for such year as so audited, and (ii) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (c) furnish to the Association such other information con- cerning said accounts, financial statements, records and expendi- tures, as well as the audit thereof, as the Association shall from time to time reasonably request. ARTICLE V Effective Date; Termination; Cancellation and Suspension Sieoction 5.01. This Agreement shall come into force and effect 'n the date upon which the Development Credit Agreement becomes seffective. Section 5.02. (a) This Agreement and all obligations of the Association, ISERST and EDD thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) a date twenty (20) years after the date of this Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph -7- (a) (ii) of this Section, the Association shall promptly notify ISERST and EDD of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancella- tion 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 against a receipt 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 or America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For ISERST: Institut Supfrieur d'Etudes et de Recherches Scientifiques et Techniques B.P. 486 Djibouti Republic of Djibouti Telex: 5811 DJ -8- For EDD: Electricite de Djibouti B.P. 175 Djibouti Republic of Djibouti Telex: 5842 DJIBELEC Section 6.02. Any action required or permitted to be taken, and any document required or permitted to be executed, (i) under this Agreement, or under Section 2.10 of the Development Credit Agreement, on behalf of ISERST may be taken or executed by its Directeur or such other person or persons as ISERST shall desig- nate in writing, and (ii) under this Agreement on behalf of EDD may be taken or executed by its Directeur General or such other person or persons as EDD shall designate in writing, and ISERST and EDD shall each 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 collec- tively but one instrument. -9- 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 of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL DEVELOPMENT ASSOCIATION Regional Vce President Eastern Africa INSTITUT SUPERIEUR D'ETUDES ET DE RECHERCHES SCIENTIFIQUES ET TECHNIQUES By Authorized Representative ELECTRICITE DE DJIBOUTI By Authorized Representative - 10 - SCHEDULE Procurement A. International Competitive Bidding 1. Except as provided in Part B hereof, goods and works shall be procured under contracts awarded in accordance with procedures consistent with those set forth in the current edition of the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in March 1977 (hereinafter called the Guidelines), on the basis of international competitive bid- ding as described in Part A of the Guidelines. 2. For goods and works to be procured on the basis of inter- national competitive bidding, in addition to the requirements of paragraph 1.2 of the Guidelines, ISERST shall prepare and forward to the Association as soon as possible, and in any event not later than 60 days prior to the date of availability to the public of the first tender a general procurement notice, in such form and detail and containing such information as the Associa- tion shall reasonably request; the Association will arrange for the publication of such notice in order to provide timely notifi- cation to prospective bidders of the opportunity to bid for the goods and works in question. ISERST shall provide the necessary information to update such notice annually so long as any goods or works remain to be procured on the basis of international competitive bidding. 3. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of international com- petitive bidding: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for the imported goods, or the ex-factory price or off-the-shelf price of other goods, of- fered in such bid; (ii) customs duties and other import taxes levied in connection with the importation, or the sales and simi- lar taxes levied in connection with the sale or delivery, pur- suant to the bid, of the goods shall not be taken into account in the evaluation of the bids; and (iii) the cost of inland freight and other expenditures incidental to the delivery of the goods to the place of their use or installation shall be included. B. Other Procurement Procedures Contracts for goods included in Part A of the Project may be awarded through limited international procedures in accordance - 11 - with the procedures set forth in Part A.3 of this Schedule and Part A of the Guidelines (excluding paragraphs 1.2 and 3.9 there- of). C. Review of Procurement Decisions by the Association 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts: (a) Before bids are invited, ISERST shall furnish to the Association, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said docu- ments or procedures as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospec- tive bidders. (b) After bids have been received and evaluated, ISERST shall, before a final decision on the award is made, inform the Association of the name of the bidder to which it intends to award the contract and shall furnish to the Association, in suf- ficient time for its review, a detailed report on the evaluation and comparison of the bids received, and such other information as the Association shall reasonably request. The Association shall, if it determines that the intended award would be incon- sistent with the Guidelines or this Schedule, promptly inform ISERST and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked or prequalification was invited. (d) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the submission to the Association of the first application for with- drawal of funds from the Credit Account in respect of such con- tract. 2. Before agreeing to any material modification or waiver of the terms and conditions of a contract, or granting an extension - 12 - of the stipulated time for performance of such contract, or issu- ing any change order under such contract (except in cases of ex- treme urgency) which would increase the cost of the contract by more than 15% of the original price, ISERST shall inform the Association of the proposed modification, waiver, extension or change order and the reasons therefor. The Association, if it determines that the proposal would be inconsistent with the pro- visions of this Agreement, shall promptly inform ISERST and state the reasons for its determination. 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