CREDIT NUMBER 7520-ET Project Agreement (Power Sector Reform, Investment and Modernization in Ethiopia Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and ETHIOPIAN ELECTRIC UTILITY PROJECT AGREEMENT AGREEMENT between INTERNATIONAL DEVELOPMENT ASSOCIATION (“Association”) and ETHIOPIAN ELECTRIC UTILITY (“Project Implementing Entity” or “PIE” or “EEU”) (“Project Agreement”) in connection with the Financing Agreement (“Financing Agreement”) of the Signature Date between the FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA (“Recipient”) and the Association, concerning Credit No. 7520-ET. WHEREAS: (A) by an agreement of the same date as the Signature Date between the Recipient and the Association (“Financing Agreement”), the Association is agreeing to provide an amount equivalent to SDR 393,000,000 (“Credit”) to assist in the financing of Part 1 of the Project on the terms and conditions of said agreement (“Credit No. 7520-ET”); and (B) Part 1 of the Project will be carried out by the PIE with the Recipient’s assistance and Recipient shall enter into a Subsidiary Agreement with the PIE and the Association shall enter into a Project Agreement with the PIE. The Association and the PIE hereby agree as follows: ARTICLE I — GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to the Financing Agreement) apply to and form part of this Agreement. 1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the Financing Agreement or the General Conditions. ARTICLE II — PROJECT 2.01. The PIE declares its commitment to the objectives of the Project and the MPA Program. To this end, the PIE shall carry out Part 1 of the Project in accordance with the provisions of Article V of the General Conditions and the Schedule to this Agreement, and shall provide promptly as needed, the funds, facilities, services and other resources required for its Respective Part of the Project. ARTICLE III — TERMINATION 3.01. For purposes of Section 10.05 (c) of the General Conditions, the date on which the provisions of this Agreement shall terminate is twenty (20) years after the Signature Date. -2- ARTICLE IV — REPRESENTATIVE; ADDRESSES 4.01. The PIE’s Representative is its Chief Executive Officer. 4.02. For purposes of Section 11.01 of the General Conditions: (a) the Association’s address is: International Development Association 1818 H Street, NW Washington, DC 20433 United States of America; and (b) the Association’s Electronic Address is: Telex: Facsimile: 248423(MCI) or 1-202-477-6391 4.03. For purposes of Section 11.01 of the General Conditions: (a) the PIE’s address is: Piasa, de Gaulle Square Addis Ababa Ethiopia P O Box 1233; and (b) the PIE’s Electronic Address is: Facsimile: +251 11560028 -3- AGREED as of the later of the two dates written below. INTERNATIONAL DEVELOPMENT ASSOCIATION By _____________________________________ Authorized Representative Ousmane Dione Name:_______________________________ Country Director Title:_______________________________ 05-Apr-2024 Date:_______________________________ ETHIOPIAN ELECTRIC UTILITY By ____________________________________ Authorized Representative Shiferaw Telila Name: ___________________________ Chief executive officer Title: ____________________________ 23-Apr-2024 Date:____________________________ -4- SCHEDULE Execution of the PIE’s Respective Part of the Project Section I. Implementation Arrangements A. Institutional Arrangements 1. EEU shall maintain its Project implementation unit (“EEU PIU”) at all times during the implementation of the Project with mandate, composition, staffing in adequate numbers and with qualifications, experience, and terms of reference acceptable to the Association, which PIU shall be responsible for the day-to-day implementation of Part 1 of the Project. 2. Without limitation on the provisions of Article V of the General Conditions, EEU shall carry out its Respective Part of the Project in accordance with financial management, procurement and environmental and social management systems acceptable to the Association, which are designed to ensure that: (a) the Financing proceeds for its Respective Part of the Project are used for their intended purposes, with due attention to the principles of economy, efficiency, effectiveness, transparency, and accountability; and (b) the actual and potential adverse environmental and social impacts of its Respective Part of the Project are identified, avoided, minimized, or mitigated, as the case may be, all through an informed decision-making process. 3. EEU shall establish, at the national and regional levels, and thereafter maintain, a system for environmental and social management of activities related to its Respective of Part of the Project, including: (a) policy and procedural guidelines, prepared in accordance with terms of reference acceptable to the Association, and finalized taking into account the Associations comments thereon; and (b) having in place staff, and other resources, satisfactory to the Association for implementation of said system. B. EEU Subsidiary Agreement 1. To facilitate the carrying out of the PIE’s Respective Part of the Project, the Recipient shall make part of the proceeds of the Credit allocated from time to time to Categories (1) and (3) of the table set forth in Section III.1 of Schedule 2 to the Financing Agreement available to the PIE under a subsidiary agreement between the Recipient and the PIE (“EEU Subsidiary Agreement”). -5- 2. Except as the Association shall otherwise agree, the PIE shall not assign, amend, abrogate or waive the Subsidiary Agreement or any of its provisions. C. Annual Work Plan and Budget (a) The EEU shall, not later than sixty (60) days after the Effective Date, (and thereafter by May 31 of each subsequent EFY) prepare and furnish to the Association, a work plan and budget for its Respective Part of the Project containing all activities proposed for implementation in the following calendar year including: (i) a detailed timetable for the sequencing and implementation of said activities; (ii) the types of expenditures required for such activities, including a proposed financing plan; and (iii) a budget establishing the proposed amounts and sources of financing. (b) The proposed work plan and budget shall specify any Training activities that may be required under the Project, including: (i) the type of Training; (ii) the purpose of the Training; (iii) the personnel to be trained; (iv) the institution or individual who will conduct the Training; (v) the location and duration of the Training; and (vi) the cost of the Training. (c) The PIE shall afford the Association a reasonable opportunity to exchange views with the PIE on such proposed work plan and budget and thereafter ensure that its Respective Part of the Project is implemented with due diligence in accordance with such work plan and budget as shall have been approved by the Association (“Annual Work Plan and Budget”). (d) The PIE shall not make or allow to be made any change to the approved Work Plan and Budget without prior approval in writing by the Association. D. Environmental and Social Standards 1. The PIE shall ensure that its Respective Part of the Project is carried out in accordance with the Environmental and Social Standards, in a manner acceptable to the Association. 2. Without limitation upon paragraph 1 above, the PIE shall ensure that its Respective Part of the Project is implemented in accordance with the Environmental and Social Commitment Plan (“ESCP”), in a manner acceptable to the Association. To this end, the PIE shall ensure that: (a) the measures and actions specified in the ESCP are implemented with due diligence and efficiency, and provided in the ESCP; (b) sufficient funds are available to cover the costs of implementing the ESCP; -6- (c) policies and procedures are maintained, and qualified and experienced staff in adequate numbers are retained to implement the ESCP, as provided in the ESCP; and (d) the ESCP, or any provision thereof, is not amended, repealed, suspended or waived, except as the Association shall otherwise agree in writing, as specified in the ESCP, and ensure that the revised ESCP is disclosed promptly thereafter. 3. In case of any inconsistencies between the ESCP and the provisions of this Agreement, the provisions of this Agreement shall prevail. 4. The PIE shall ensure that: (a) all measures necessary are taken to collect, compile, and furnish to the Association through regular reports, with the frequency specified in the ESCP, and promptly in a separate report or reports, if so requested by the Association, information on the status of compliance with the ESCP and the environmental and social instruments referred to therein, all such reports in form and substance acceptable to the Association, setting out, inter alia: (i) the status of implementation of the ESCP; (ii) conditions, if any, which interfere or threaten to interfere with the implementation of the ESCP; and (iii) corrective and preventive measures taken or required to be taken to address such conditions; and (b) the Association is promptly notified of any incident or accident related to or having an impact on its Respective Part of the Project which has, or is likely to have, a significant adverse effect on the environment, the affected communities, the public or workers, including, explosions, spills, and any workplace accidents that result in death, serious or multiple injury, pollution, or any violent labor unrest or dispute between the Recipient or the PIE or security forces (assigned to protect the Project) and local communities, any case of sexual exploitation and abuse, sexual harassment and violence against minors, or any incidents in or related to international waterways or disputed areas, in accordance with the ESCP, the environmental and social instruments referenced therein and the Environmental and Social Standards. 5. The PIE shall establish, publicize, maintain and operate an accessible grievance mechanism, to receive and facilitate resolution of concerns and grievances of Project-affected people, and take all measures necessary and appropriate to resolve, or facilitate the resolution of, such concerns and grievances, in a manner acceptable to the Association. -7- 6. The PIE shall ensure that all bidding documents and contracts for civil works under its Respective Part of the Project include the obligation of contractors, and subcontractors and supervising entities to: (a) comply with the relevant aspects of ESCP and the environmental and social instruments referred to therein; and (b) adopt and enforce codes of conduct that should be provided to and signed by all workers, detailing measures to address environmental, social, health and safety risks, and the risks of sexual exploitation and abuse, sexual harassment and violence against children, all as applicable to such civil works commissioned or carried out pursuant to said contracts. Section II. Project Monitoring, Reporting and Evaluation A. Project Reports 1. The PIE shall monitor and evaluate the progress of its Respective Part of the Project and prepare Project Reports for its Respective Part of the Project in accordance with the provisions of Section 5.08 (b) of the General Conditions and on the basis of the indicators acceptable to the Association. Each such Project Report shall cover the period of one calendar semester, and shall be furnished to the Recipient not later than thirty (30) days after the end of the period covered by such report for incorporation and forwarding by the Recipient to the Association of the overall Project Report. 2. The PIE shall provide to the Recipient not later than four months after the Closing Date, for incorporation in the report referred to in Section 5.08 (c) of the General Conditions all such information as the Recipient or the Association shall reasonably request for the purposes of such Section.