Mozambique - Coastal Shipping Project : Credit 2599 - Agreement - Conformed

AGREEMENT RELATED TO CREDIT NUMBER 2599 MOZ Agreement between GOVERNMENT OF SWEDEN (Technical Assistance to Direcqao Nacional de Estradas e Pontes (DNEP)) and INTERNATIONAL DEVELOPMENT ASSOCIATION for the Administration of Certain Funds to be made available by the SWEDISH INTERNATIONAL DEVELOPMENT COOPERATION AGENCY Dated (r t q , 1996 AGREEMENT RELATED TO CREDIT NUMBER 2599 MOZ AGREEMENT AGREEMENT, dated A 6 1996, between the GOVERNMENT OF SWEDEN (Sweden) represented by the SWEDISH INTERNATIONAL DEVELOPMENT COOPERATION AGENCY (Sida) and the INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) to provide for the administration, by the Association, of certain funds to be made available by Sweden to the Republic of Mozambique (Mozambique). WHEREAS (A) the agreement, dated May 18, 1989, between Sweden and the Association provides the framework for cofinancing of development projects by the parties thereto; (B) Sweden wishes to make available to Mozambique a grant not exceeding an amount equivalent to six million Swedish Kronor (SEK 6,000,000) (the Sida Grant) to assist Mozambique in the financing of the Technical Assistance to Direc9ao Nacional de Estradas e Pontes (DNEP) described in Part B.1 of Schedule 2 to the Development Credit Agreement for the Second Roads and Coastal Shipping Project (Credit Number 2599 MOZ), dated April 15, 1994, between the Grantee and the Association (the Development Credit Agreement) between Mozambique and the Association (the Project); and (C) Sweden wishes that the proceeds of the Grant should be incremental to the proceeds of the Development Credit Agreement and extended for the same purposes by the Association pursuant to the Development Credit Agreement. WHEREAS the Association has agreed on the basis, inter alia, of the foregoing, to administer the Grant upon the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Section 1.01. The Association, as Administrator on behalf of Sweden, shall review and approve requests submitted by Mozambique to finance the reasonable costs of goods and services required during the execution of the Project in accordance with the relevant provisions of Schedule 1 to the Development Credit Agreement, except that the amounts to be withdrawn shall not be repaid and shall bear no interest or other charges. Section 1.02. The Association, as Administrator on behalf of Sweden, shall have the sole responsibility for the supervision of the Project. -2- Section 1.03. The Association shall exercise the same care in the discharge of its functions under this Agreement as it exercises with respect to the administration and management of its own affairs and shall have no further responsibility to Sweden in respect thereof. ARTICLE II Section 2.01. (a) For the purpose of this Agreement, Sweden shall, upon request from the Association, deposit the Grant amount equivalent to six million Swedish Kroner (SEK 6,000,000) into the IBRD's Account "T" IBRDSEK 2 which is maintained with Sveriges Riksbank (the T-Account). (b) When making deposits, Sweden shall: (i) instruct Sveriges Riksbank to: (A) advise the Association's Cash Management Department as to the amount received; (B) specify it is for Project No. 27856; and (C) specify the date of the deposit; and (ii) Fax a copy of any payments instructions to Sveriges Riksbank to the Office of the Trust Funds Administrator in the Association utilizing Fax No. 202-522-3397. (c) The funds in the T-Account shall be freely exchangeable by the Association with other currencies as may facilitate their administration. Section 2.02. The Association shall disburse from the T-Account such amounts as, from time to time, shall be needed to meet the reasonable costs of goods and services financed, or to be financed, pursuant to Section 1.01 of this Agreement. Such disbursement shall be effected on the basis of withdrawal applications for eligible expenditures submitted by Mozambique to the Association, in accordance with the Association's normal procedures for withdrawal of proceeds of credits made by the Association. Section 2.03. In order to assist the defrayal of the costs of administration and other expenses incurred by the Association under this Agreement, the Association may invest and reinvest the Grant funds pending their disbursement and retain for its own account an amount equal to two percent of the Grant. The Association shall credit all income from such investment on a monthly basis to a separate Swedish investment income trust fund, which the Association may also invest. Except as Sida and the Association may otherwise -3- agree, the Association may deduct from such investment income trust fund and retain for its own account an amount equivalent to: (i) two percent (2%) of the amount of the Grant; and (ii) such amounts as are required to reimburse the Association for the cost of any audits requested by Sida. Except as Sida and the Association may otherwise agree, the Association shall pay to Sida the balance of the funds in such investment income trust fund on an annual basis no later than September 1 of each year. If the amount in such investment income trust fund in any year is less than the amount the Association is entitled to retain under this agreement, Sida will, upon request from the Association, pay such remaining amount to the Association. Section 2.04. The Closing Date shall be December 31, 1997, or such later date as the Association shall establish. The Association shall promptly notify Sweden of such later date. ARTICLE III Section 3.01. (a) The Association shall maintain separate records and accounts in respect of the funds in the T-Account disbursed by the Association pursuant to the provisions of this Agreement. Within 30 days of each March 31, June 30, September 30 and December 31, the Association shall prepare a financial statement with respect to the funds deposited by Sweden with the Association pursuant to this Agreement and forward a copy to Sida. Each such financial statement shall be expressed in the currency in which the funds are maintained by the Bank. The funds deposited may be commingled with other Trust Fund assets, but shall be kept separate and apart from the funds of the Association. (b) The Association will provide Sida annually with a management assertion together with an attestation from the Association's external auditors on the satisfactory performance of the procedures and controls used by the Association in administering trust funds. The costs of such attestations shall be borne by the Association. In addition, upon the request of Sida, the Association shall cause the financial statement for the Project to be audited by the Association's external auditors and shall forward a copy of the auditors' report to Sida. The cost of such audit shall be deducted from the Swedish investment income trust fund in accordance with Section 2.03 of this Agreement. The financial reporting and auditing under this Agreement shall be carried out in accordance with the Association's normal practices. ARTICLE IV Section 4.01. Sida and the Association shall consult from time to time at the request of each other on all matters arising out of this Agreement. -4- Section 4.02. The Association shall keep Sida informed of the progress of the Project. To that end, the Association shall furnish to Sida all relevant progress, performance and assessment reports related to the Project. Section 4.03. The Association shall inform Sida of any forthcoming major missions and meetings in connection with the Project and shall afford representatives of Sida the opportunity to participate in such missions and meetings. Section 4.04. The Association shall inform Sida of any proposed significant modification to the Development Credit Agreement and shall afford Sida a reasonable opportunity to exchange views with the Association before effecting any such modification. ARTICLE V Section 5.01. This Agreement shall become effective upon signature and, subject to the provisions of this Article, shall continue in effect until December 31, 1997 or until all funds made available under this Agreement have been disbursed from the T-Account to Mozambique and all other formalities incidental thereto have been completed. Section 5.02. If at any time it appears to either party that the purposes of this Agreement can no longer effectively or appropriately be carried out, this Agreement may be terminated at the initiative of such party on ninety (90) days notice in writing. Section 5.03. Upon termination of this Agreement, unless the parties agree on another course of action, any funds of Sida held hereunder by the Association including all investment income thereon, shall be returned to SIDA, and the Association's administration shall be considered terminated. Subject to the foregoing, promptly after termination of this Agreement, the Association shall furnish Sida with a final report and a final statement with respect to the funds. ARTICLE VI Section 6.01. The Swedish International Development Cooperation Agency, shall be competent to represent Sweden for the application of this Agreement. Section 6.02. This Agreement may be amended only by written agreement of the parties hereto. Section 6.03. 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, mail, fax, cable or telex to the party to -5- which it is required or permitted to be given or made at such party's address hereinafter specified or at such other addresses as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: For Sweden: Swedish International Development Cooperation Agency S-105 25 Stockholm Sweden Telephone: (46) 8-698 5000 Telex: 11450 SIDA S For the Association: Energy and Infrastructure Operations Division Southern Africa Deparment Africa Region International Development Association 1818 H Street, N.W. Washington, D.C. 20433 USA Fax: Telex: (202) 473-8301 197688 (TRT) 248423 (RCA) 64145 (WUI) or 82987 (FTCC) -6- IN WITNESS WHEREOF, the undersigned duly authorized hereto, have signed this Agreement. GOVERNMENT OF SWEDEN By /f5/ tijIc Date 'A * 2 cc INTERNATIONAL DEVELOPMENT ASSOCIATION By/ Date/ INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the orieinal in the archives of the International - Development Association. FOR SECRETARY