Conformed Copy - C2777 - Environmental Management Capacity Building Project - Project Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2777 UG Project Agreement (Environmental Management Capacity Building Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and NATIONAL ENVIRONMENT MANAGEMENT AUTHORITY Dated November 10, 1995 CREDIT NUMBER 2777 UG PROJECT AGREEMENT AGREEMENT, dated November 10, 1995, between INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and NATIONAL ENVIRONMENT MANAGEMENT AUTHORITY (the Authority). WHEREAS by the Development Credit Agreement of even date herewith between the Republic of Uganda (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to seven million five hundred thousand Special Drawing Rights (SDR 7,500,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that the Authority agree to undertake such obligations toward the Association as are set forth in this Agreement; WHEREAS the Authority, 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 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 Page 2 Execution of the Project Section 2.01. (a) The Authority 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 the Project with due diligence and efficiency and in conformity with appropriate administrative, financial, and environmental management practices consistent with the NEAP, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) Without limitation upon the provisions of paragraph (a) of this Section and except as the Association and the Authority shall otherwise agree, the Authority shall carry out the Project in accordance with the Implementation Program set forth in Schedule 2 to this Agreement. Section 2.02. Except as the Association shall otherwise agree, procurement of the goods, works and consultants' services required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 1 to this Agreement. Section 2.03. (a) The Authority shall carry out the obligations set forth in Sections 9.03, 9.04, 9.05, 9.06, 9.07 and 9.08 of the General Conditions (relating to insurance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition, respectively) in respect of the Project Agreement. (b) Without limitation upon the provisions of Article IX of the General Conditions, the Authority shall: (i) prepare and furnish to the Borrower and the Association, not later than six (6) months after the Closing Date or such later date as may be agreed for this purpose between the Borrower, the Authority and the Association, a plan, of such scope and in such detail as the Association shall reasonably request, for the future operation of the Project; (ii) afford the Association a reasonable opportunity to exchange views with the Borrower and the Authority on the said plan; and (iii) thereafter, carry out the said plan with due diligence and efficiency and in accordance with appropriate practices, taking into account the Association's comments thereon. Section 2.04. (a) The Authority shall, at the request of the Association, exchange views with the Association with regard to the progress of the Project, the performance of its obligations under this Agreement and other matters relating to the purposes of the Credit. (b) The Authority shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Credit, or the performance by the Authority of its obligations under this Agreement. ARTICLE III Management and Operations of the Authority Section 3.01. (a) The Authority shall carry on its operations and conduct its affairs in accordance with sound administrative, financial and environmental practices under the Page 3 supervision of qualified and experienced management assisted by competent staff in adequate numbers. (b) To this end, the Authority shall, at all times during the execution of the Project, appoint and maintain a management team comprising experts, whose qualifications shall be acceptable to the Association, in the positions of Executive Director, Deputy Executive Director, and Directors of the following four Divisions: (i) Policy, Planning and Legal; (ii) Information and Monitoring; (iii) Education, Awareness and Training; and (iv) Administration and Finance. Section 3.02. The Authority shall take out and maintain with responsible insurers, or make other provision satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. ARTICLE IV Financial Covenants Section 4.01. (a) The Authority shall maintain records and accounts adequate to reflect in accordance with sound accounting practices its operations and financial condition. (b) The Authority shall: (i) have its records, accounts and financial statements (balance sheets, statements of income and expenses and related statements) including the Special Account, the Project Account and expenditures incurred for the carrying out of the Project for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of its financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested including a statement on the adequacy of the Authority