Conformed Copy - C3317 - Enterprise Development Project - Project Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 3317-MOZ Project Agreement (Enterprise Development Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and BANCO DE MOCAMBIQUE Dated March 1, 2000 CREDIT NUMBER 3317-MOZ PROJECT AGREEMENT AGREEMENT, dated March 1, 2000, between INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and BANCO DE MOCAMBIQUE (BM). WHEREAS (A) by the Development Credit Agreement of even date herewith between Republic of Mozambique (the Borrower) and the Association, the Association has agreed to lend to the Borrower an amount in various currencies equivalent to nineteen million two hundred thousand Special Drawing Rights (SDR 19,200,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that BM agree to undertake such obligations toward the Association as are set forth in this Agreement; (B) by a subsidiary loan agreement to be entered into between the Borrower and BM the proceeds of the Credit provided for under the Development Credit Agreement will be made available to BM on terms and conditions set forth in said Subsidiary Loan Agreement; and WHEREAS BM, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Page 2 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 II Execution of the Project; Management and Operations of BM Section 2.01. (a) BM declares its commitment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement and, to this end, shall carry out Part B of the Project and conduct its operations and affairs in conformity with appropriate administrative, financial and banking practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for Part B of the Project. (b) Without limitation upon the provisions of paragraph (a) of this Section and except as the Association and BM shall otherwise agree, BM shall carry out the Project in accordance with the Implementation Program set forth in Schedule 4 to the Development Credit Agreement. Section 2.02. (a) BM undertakes that, unless the Association shall otherwise agree, Subloans and Investments will be made in accordance with the procedures and on the terms and conditions set forth or referred to in Schedule