Madagascar - Irrigation Rehabilitation Project : Credit 1589 - Project Agreement - Conformed

REDIT NUMBER 1589 MAG D0CU ME Project Agreement (Irrigation Rehabilitation Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and SOCIETE POUR L'AMENAGEMENT ET LA MISE EN VALEUR DE LA VALLEE DU BAS-MANGOKY Dated , 1985 CREDIT NUMBER 1589 HAG P CT AGREEMENT AGREEMENT, dated / 12- 1985, between INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and SOCIETE POUR L'AMENAGEMENT ET LA MISE EN VALEUR DE LA VALLEE DU BAS-MANGOKY (SAMANGOKY). WHEREAS (A) by the Development Credit Agreement of even date herewith between Democratic Republic of Madagascar (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to twelve million six hundred thousand Special Drawing Rights (SDR 12,600,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that SAMANGOKY agree to undertake such obligations toward the Associa- tion as are set forth in this Agreement; (B) by a subsidiary agreement to be entered into between the Borrower and SAMANGOKY part of the proceeds of the credit provided for under the Development Credit Agreement will be made available to SAMANGOKY on the terms and conditions set forth in said Subsidiary Agreement; and WHEREAS SAMANGOKY, in consideration of the Associatior.'s entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations set forth in this Agree- ment; 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, and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE I Execution of Part C of the Project Section 2.01. (a) SAMANGOKY declares its commitment to the objectives of the Project as set forth in Schedule 2 to the -2- Development Credit Agreement, and, to this end, shall carry out Part C of the Project with due diligence and efficiency and in conformity with appropriate administrative, financial, engineer- ing and agricultural practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for Part C of the Project. Section 2.02. Except as the Association shall otherwise agree, procurement of the goods, works and consultants' services required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to the Development Credit Agreement. Section 2.03. SAMANGOKY shall carry out the obligations set forth in Sections 9.03, 9.04, 9.05, 9.06, 9.07 and 9.08 of the General Conditions (relating to insurance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition, respectively) in respect of Part C of the Project. Section 2.04. SAMANGOKY shall duly perform all its obliga- tions under the Subsidiary Agreement. Except as the Association shall otherwise agree, SAMANGOKY shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the Subsidiary Agreement or any provision thereof. Section 2.05. (a) SAMANGOKY shall, at the request of the Association, exchange views with the Association with regard to the progress of Part C of the Project, the performance of its obligations under this Agreement, and other matters relating to the purposes of the Credit. (b) SAMANGOKY shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Credit, or the performance by SAMANGOKY of its obligations under this Agreement. Section 2.06. By June 30 of each year of execution of the Project, SAMANGOKY shall prepare and furnish to the Association for approval an annual work program (SAMANGOKY Annual Work Program) for the following year specifying all activities to be undertaken in carrying out part C of the Project; each SAMANGOKY Annual Work Program to include a budget, a financing plan, all -3- items to be financed under the Credit during the following year, and to specify the amount of the contribution needed from the Borrower during the following year. ARTICLE III Management and Operations of SAMANGOKY Section 3.01. SAMANGOKY shall carry on its operations and conduct its affairs in accordance with sound administrative, financial, engineering and agricultural practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. Section 3.02. SAMANGOKY shall at all times operate and maintain its machinery, equipment and other prope,cy, and from time to time, promptly as needed, make all necessary repairs and renewals thereof, all in accordance with sound engineering, financial and agricultural practices. Section 3.03. SAMANGOKY 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. (a) SAMANGOKY shall maintain records and accounts adequate to reflect in accordance with sound accounting practices its operations and financial condition. (b) SAMANGOKY shall: (i) have its accounts and financial statements (ba- lance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable 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, (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; and (iii) furnish to the Association such other information concerning said accounts and financial statements as well as the audit thereof and said records, as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals are requested from the Credit Account on the basis of statements of expenditure, SAMANGOKY shall: (i) maintain, in accordance with paragraph (a) of this Section, separate records and accounts reflecting such expenditures; (ii) retain, until one year after the Closing Date, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association's representatives to exa- mine such records; and (iv) ensure that such separate accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report thereof contains, in respect of such separate accounts, a separate opinion by the said auditors as to whether the proceeds of the Credit withdrawn in respect of such expenditures have been used for the purpose for which they were provided. 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 Agreement becomes effective. -5- Section 5.02. (a) This Agreement and all obligations of the Association and of SAMANGOKY 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) the date 20 years after the date of this Agree- ment. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify SAMANGOKY 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 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 Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) -6- For SAMANGOKY: Boite Postale 1299 Antananarivo Madagascar 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 SAMANGOKY, may be taken or executed by its Director General or such other person or persons as the Director General shall designate in writing, and SAMANGOKY shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 6.03. This Agreement ma-y 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 duly authorized representatives, 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 By Regional Vice President E tern and Southern Africa SOCIETE POUR L'AMENAGEMENT ET LA MIqE EN VALEUR DE LA VALLEE DU BAS-MANGOKY By Authorized Representative 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 (lay of 198 FOR SECRETARY