Conformed Copy - C2326 - Lobito Benguela Urban Environment Rehabilitation Project - Swedish Grant Agreement

Page 1 CONFORMED COPY AGREEMENT RELATED TO CREDIT NUMBER 2326 ANG Swedish Grant Agreement (Lobito-Benguela Urban Environmental Rehabilitation Project) between REPUBLIC OF ANGOLA and INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of development aid funds provided by THE GOVERNMENT OF SWEDEN Dated June 17, 1994 AGREEMENT RELATED TO CREDIT NUMBER 2326 ANG SWEDISH GRANT AGREEMENT AGREEMENT, dated June 17, 1994, between REPUBLIC OF ANGOLA (the Grantee) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) acting as Administrator (the Administrator) of the Swedish Grant (as hereinafter defined) provided by the Government of Sweden (Sweden). WHEREAS: (A) Sweden has agreed to make available a grant (the Swedish Grant) through the Administrator to the Grantee to assist in the financing of Parts A and B of the Lobito-Benguela Urban Environment Rehabilitation Project (the Project), described in Schedule 2 to the Development Credit Agreement dated February 13, 1992, between the Grantee and the Association on the terms and conditions hereinafter set forth; (B) by an agreement between Sweden and the Association (the Administration Agreement), Sweden has requested the Association, and the Association has accepted, to administer the Swedish Grant in accordance with the provisions of the Administration Agreement; (C) the Grantee acknowledges that the financial assistance extended to the Grantee under this agreement (the Swedish Grant Agreement) shall be considered as part of the bilateral develop-ment aid extended by Sweden to the Grantee; and (D) the Administrator has agreed on the basis, inter alia, of the foregoing to extend the Swedish Grant to the Grantee in support of the Project, upon the terms and conditions set forth in this Agreement; Page 2 NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The General Conditions Applicable to Develop-ment Credit Agreements of the Association, dated January 1, 1985 (the General Conditions) constitute an integral part of this Agreement subject, however, to the following modifications thereof: (a) the term "Association", whenever used in the General Conditions, means the International Development Association acting as Administrator of the Swedish Grant pursuant to the Administration Agreement, except in the phrase "member of the Association" in Sections 2.01 (5), 4.02 (b) and 6.02 (e); (b) the term "Development Credit Agreement", whenever used in the General Conditions, means the Swedish Grant Agreement; (c) the term "Credit", whenever used in the General Conditions, means the Swedish Grant; (d) the term "Credit Account", whenever used in the General Conditions, means the account opened by the Administrator in its books in the name of the Grantee to which the amount of the Swedish Grant is credited; (e) in Section 6.02 the term "Association" shall also include the Association acting in its own capacity; (f) Section 9.06 (c) shall be modified to read: "(c) Not later than six months after the Closing Date, or such later date as may be agreed for this purpose between the Grantee and the Administrator, the Grantee shall prepare and furnish to the Administrator a report of such scope and in such detail as the Administrator shall reasonably request, on the execution of the activities referred to in the Preamble to the Swedish Grant Agreement, the performance by the Grantee and the Administrator of their respective obligations under the Swedish Grant Agreement and the accomplishment of the purposes of the Swedish Grant."; and (g) Sections 3.02, 3.03, 3.04, 3.05, 4.02, 4.03, 4.04, 4.06, 6.05, 7.01, 8.01 (a), and Article XII are deleted. Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions, in the Administration Agreement, and in the Preamble to this Agreement have the respective meanings therein set forth and the term "Swedish Kroner" or "SEK" means the currency of Sweden. ARTICLE II The Grant Section 2.01. The Administrator agrees to extend to the Grantee, on the terms and conditions herein set forth or referred to, a grant in an amount of thirty million Swedish Kroner (SEK 30,000,000) or such other amount as shall have been made available by Sweden to the Administrator for this purpose pursuant to the Administration Agreement. Section 2.02. (a) The amount of the Swedish Grant may be withdrawn from the Credit Account in accordance with the provisions of Schedule I to this Agreement, as such Schedule may be amended from time to time by agreement between the Grantee and the Administrator for expenditures made (or if the Administrator shall so agree, to be made) in respect of the reasonable cost of the goods and services required for the Project. (b) Notwithstanding the provisions of paragraph (a) above, no withdrawals shall be made in respect of payments for taxes levied by, or in the territory of, the Grantee on goods and services or in the importation, manufacture, procurement or supply thereof. Page 3 (c) The Grantee shall, for the purposes of the Project, open and maintain in dollars a special account in a commercial bank on terms and conditions satisfactory to the Administrator. Deposits into and payments out of the Swedish Special Account shall be made in accordance with Schedule II of this Agreement. Section 2.03. (a) Consultants and experts acceptable to the Administrator shall be employed by the Grantee on terms and conditions satisfactory to the Administrator for the provision of services to be financed out of the proceeds of the Swedish Grant. Such consultants and experts shall be selected in accor-dance with procedures satisfactory to the Administrator on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" (the Guide-lines), published by the Bank in August 1981. No substitution of such consultants and experts or modification of the terms and conditions of their employment shall be made except with the prior consent of the Administrator. (b) Except as the Administrator shall otherwise agree, the procurement of goods and works required for the Project and to be financed out of the proceeds of the Grant shall be governed by the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1992. (c) If the Administrator shall have reasonably determined that the procurement of any item is inconsistent with the proce-dures set forth or referred to in paragraphs (a) and (b) above, no expenditures for such item shall be financed out of the proceeds of the Swedish Grant, and the Administrator may, without in any way restricting or limiting any other right, power or remedy of the Administrator under this Agreement, by notice to the Grantee, cancel such amount of the Swedish Grant as, in the Ad-ministrator's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financ-ing out of the proceeds of the Swedish Grant. Section 2.04. The Closing Date shall be September 30, 1998 or such later date as the Administrator shall establish. The Administrator shall promptly notify the Grantee of such later date. ARTICLE III Execution of the Project Section 3.01. The Grantee declares its commitment to the objectives of the Project and, to this end, shall carry out the Project, with due diligence and efficiency, and in conformity with appropriate administrative and financial practices. ARTICLE IV Financial Covenants Section 4.01. (a) The Grantee shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project. (b) The Grantee shall: (i) have the records and accounts referred to in paragraph (a) of this Section for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Administrator; (ii) furnish to the Administrator, as soon as avail-able, but in any case not later than six months after the end of each such year, a certified copy of the report of such audit by said audi-tors, of such scope and in such detail as the Administrator shall have reasonably requested; and (iii) furnish to the Administrator such other informa-tion concerning said records, accounts and the audit thereof as the Administrator shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Grantee shall: (i) maintain or cause to be maintained, in accor-dance with paragraph (a) of this Section, records and accounts reflecting such Page 4 expenditures; (ii) retain, until at least one year after the Administrator has received the audit for the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Administrator's representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. ARTICLE V Effectiveness Section 5.01. This Agreement shall become effectiveness as of the date first above written or the date of the Administration Agreement, whichever is the later, and shall continue in effect until the Swedish Grant has been fully disbursed and the parties to this Agreement have fulfilled their obligations under this Agreement. Section 5.02. This Agreement and all obligations of the Recipient and the Administrator hereunder shall terminate on the date on which the Development Credit Agreement shall terminate in accordance with its terms. ARTICLE VI Representative; Transfer of Rights and Obligations Section 6.01. The Provincial Governor of Benguela shall be the representative of the Grantee for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Grantee: Provincial Government of Benguela Pal