Conformed Copy - C2755 - Social Recovery II Project - Development Credit Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2755 ZA Development Credit Agreement (Second Social Recovery Project) between REPUBLIC OF ZAMBIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated July 18, 1995 CREDIT NUMBER 2755 ZA DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated July 18, 1995, between the REPUBLIC OF ZAMBIA (the Borrower) and the INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) . WHEREAS (A) the Borrower, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Association to assist in the financing of the Project; (B) the Borrower intends to contract from the Kingdom of Sweden (Sweden) a grant (the Swedish Grant) in an aggregate principal amount equivalent to $700,000 to assist in financing Parts B and C of the Project on the terms and conditions set forth in an agreement (the Swedish Grant Agreement) to be entered into between the Borrower and Sweden; (C) the Borrower intends to contract from the Kingdom of Norway (Norway) a grant (the Norwegian Grant) in an aggregate principal amount equivalent to $2,000,000 to assist in financing Parts B and C of the Project on the terms and conditions set forth in an agreement (the Norwegian Grant Agreement) to be entered into between the Borrower and Norway; and WHEREAS the Association has agreed, on the basis, inter alia, of the foregoing, to extend the Credit to the Borrower upon the terms and conditions set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: Page 2 ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Development Credit Agreements" of the Association, dated January 1, 1985, with the modifications thereto set forth below (the General Conditions) constitute an integral part of this Agreement: (a) The last sentence of Section 3.02 is deleted. (b) The second sentence of Section 5.01 is modified to read: "Except as the Association and the Borrower shall otherwise agree, no withdrawals shall be made: (a) on account of expenditures in the territories of any country which is not a member of the Association or for goods produced in, or services supplied from, such territories; or (b) for the purpose of any payment to persons or entities, or for any import of goods, if such payment or import, to the knowledge of the Association, is prohibited by a decision of the United Nations Security Council taken under Chapter VII of the Charter of the United Nations." Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Beneficiary Community" means a community that will be served by a Micro-Project; (b) "Financing Agreement" means an agreement to be entered into between the Borrower and a Project Committee for financing of a Micro-Project through the provision of a grant; (c) "Implementation Manual" means the documents prepared by the Borrower and furnished to the Association under cover of a letter dated May 15, 1995 setting out the procedures and guidelines for carrying our Part A of the Project as such documents may be amended or modified from time to time by agreement between the Borrower and the Association; (d) "Kwacha" means the currency of the Borrower; (e) "Micro-Project" means an activity financed or to be financed in whole or in part out of the proceeds of the Credit under Part A.1 of the Project; (f) "MPU" means the Micro-Projects Unit established in the Borrower's National Commission for Development Planning for the purpose of appraising and financing Micro-Projects; (g) "NGO" means a non-governmental organization operating in the territory of the Borrower; (h) "Participatory Assessment Group" means the NGO registered on February 27, 1995 under the Borrower