Conformed Copy - C2374 - Roads and Coastal Shipping Project - Amendment

Page 1 November 22, 1995 His Excellency Adriano Afonso Maleiane Governor Banco de Mocambique Avenida 25 de Setembro 1695 P.O.Box 423 Maputo, Mozambique Re: Credit No. 2374 MOZ (Roads and Coastal Shipping Project) Amendment to Development Credit Agreement Dear Sir: We refer to the Development Credit Agreement, (the Agreement), dated June 19, 1992, between Republic of Mozambique (the Borrower) and International Development Association (the Association). Further to discussions held between representatives of the Borrower and the Association, we are pleased to inform you that the Association agrees to amend the Agreement as follows: Article II: Section 2.02 (b) of the Agreement shall be amended to read as follows: "(b) The Borrower shall, for the purposes of the Project, open and maintain in dollars, four special deposit accounts in commercial bank, on terms and conditions satisfactory to the Association, including appropriate protection against set-off, seizure or attachment: (i) Special Account A shall be opened for the purposes of Parts A and D (c) of the Project (MCA Account); (ii) Special Account B shall be opened for the purposes of Parts B, B.1, B.2, B.3, B.4 (a) and B.4 (c) of the Project (MTC Account); (iii) Special Account C shall be opened for the purposes of Part C of the Project (BM Account); and (iv) Special Account D shall be opened for the purposes of Part B.4 (b) of the Project (MOF Account). Deposits into, and payments out of, the Special Accounts shall be made in accordance with the provisions of Schedule 5, 6, 7 and 9 to this Agreement." Schedule 1: 1. The table in paragraph 1 of Schedule 1 to the Agreement shall be amended to read as follows: "Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be financed (1) Goods and Services under Part A of the Project (a) Consultants 19,865,000 100% services (b) Training 2,240,000 100% of foreign expenditures and 60% of local expenditures Page 2 (c) Civil works under 2,910,000 90% Parts A.1, A.2, A.3 and A.4 of the Project (d) Goods, works and 5,100,000 90% services under Part A.7 of the Project (e) Data communication, 1,100,000 100% computer equipment and software for DNEP (f) Vehicles under Part A.1 250,000 100% of the Project (2) Goods and services under Parts B.1, B.2, B.3, B.4 (a) B.4 (c) and F of the Project: (a) Consultants services 4,550,000 100% (b) Training 1,470,000 100% of foreign expenditures and 60% of local expenditures (c) Equipment, vehicles 1,690,000 100% and spare parts (d) Civil works under 2,590,000 90% Parts B.3 (a) and B.4 (b) of the Project (3) Goods and services under Part B.4 (b) of the Project (a) Consultants services 2,100,000 100% (b) Equipment and 350,000 100% spare parts (4) Goods and services 4,220,000 90% under the line of credit (5) Consultants services 895,000 100% under Part D of the Project and audits (6) Consultants services 400,000 100% under Part E of the Project (7) Refunding of Project 665,463 Amount due Preparation Advance pursuant to Section 2.02 (c) of the Agreement (8) Unallocated 3,704,437 TOTAL 54,100,000" 2. Schedule 4: Part A.1 (c) shall be amended to read as follows: "'GAPROMAR' shall be responsible for the implementation of Page 3 Parts B.1, B.2, B.3, B.4 (a) and B.4 (c) of the Project." Part A.1 (d) shall be amended to read as follows: "The Ministry of Plan and Finance of the Borrower shall be responsible for the implementation of Part B.4 (d) of the Project." 3. Schedule 6: Paragraph 1 (a) shall be amended to read as follows: "the term 'eligible categories' means Category (2) set forth in the table in paragraph 1 of Schedule 1 to this Agreement." Paragraph 1 (b) shall be amended to read as follows: "The term 'eligible expenditures' means expenditures in respect of reasonable cost of goods and services required for Parts B.1, B.2, B.3, B.4 (a) and B.4 (c) of the Project and to be financed out of the proceeds of the Credit allocated from time to time to the eligible categories in accordance with the provisions of Schedule 1 to this Agreement." 4. Schedule 9: A new Schedule 9 shall be added to the Agreement to read as follows: "SCHEDULE 9 Special Account D (MOF Account) 1. For the purposes of this Schedule: (a) the term "eligible Category" means Category 3 set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (b) the term "eligible expenditures" means expenditures in respect of the reasonable cost of goods and services required for Part B. 4 (b) of the Project and to be financed out of the proceeds of the Credit allocated from time to time to the eligible Category in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount equivalent to $200,000 to be withdrawn from the Credit Account and deposited into the Special Account D pursuant to paragraph 3 (a) of this Schedule. 2. Payments out of the Special Account D shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Association has received evidence satisfactory to it that the Special Account D has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Special Account D shall be made as follows: (a) For withdrawals of the Authorized Allocation, the Borrower shall furnish to the Association a request or requests for deposit into the Special Account D of an amount or amounts which do not exceed the aggregate amount of the Authorized Allocation. On the basis of such request or requests, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account D such amount or amounts as the Borrower shall have requested. (b) (i) For replenishment of the Special Account D, the Page 4 Borrower shall furnish to the Association requests for deposits into the Special Account D at such intervals as the Association shall specify. (ii) Prior to or at the time of each such request, the Borrower shall furnish to the Association the documents and other evidence required pursuant to paragraph 4 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account D such amount as the Borrower shall have requested and as shall have been shown by said documents and other evidence to have been paid out of the Special Account for eligible expenditures. All such deposits shall be withdrawn by the Association from the Credit Account under the respective eligible Category, and in the respective equivalent amounts, as shall have been justified by said documents and other evidence. 4. For each payment made by the Borrower out of the Special Account D, the Borrower shall, at such time as the Association shall reasonably request, furnish to the Association such documents and other evidence showing that such payment was made exclusively for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Schedule, the Association shall not be required to make further deposits into the Special Account D: (a) if, at any time, the Association shall have determined that all further withdrawals should be made by the Borrower directly from the Credit Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; (b) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) (ii) of this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of the records and accounts for the Special Account D; (c) if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to the provisions of Section 6.02 of the General Conditions; or (d) once the total unwithdrawn amount of the Credit allocated to the eligible Category for Part B.4 (b) of the Project, minus the total amount of all outstanding special commitments entered into by the Association pursuant to Section 5.02 of the General Conditions with respect to Part B.4 (b) of the Project, shall equal the equivalent of twice the amount of the Authorized Allocation. Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to the eligible Category for Part B.4 (b) of the Project shall follow such procedures as the Association shall specify by notice to the Borrower. Such further withdrawals shall be made only after and to the extent that the Association shall have been satisfied that all such amounts remaining on deposit in the Special Account D as of the date of such notice will be utilized in making payments for eligible expenditures. 6. (a) If the Association shall have determined at any time that any payment out of the Special Account D: (i) was made for an expenditure or in an amount not eligible pursuant to Page 5 paragraph 2 of this Schedule; or (ii) was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association: (A) provide such additional evidence as the Association may request; or (B) deposit into the Special Account D (or, if the Association shall so request, refund to the Association) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account D shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association shall have determined at any time that any amount outstanding in the Special Account D will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account D. (d) Refunds to the Association made pursuant to paragraph 6 (a), (b) and (c) of this Schedule shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions." Please indicate your agreement with the foregoing by countersigning, dating and returning to us the enclosed copy of this letter. This Amendment shall become effective as of the date of countersignature. Sincerely, Katherine Marshall Director Southern Africa Department Africa Region REPUBLIC OF MOZAMBIQUE By: Adriano Maleiane, Authorized Representative Date: November 27, 1995