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CONFORMED COPY
CREDIT NUMBER 3234 BEN
Project Agreement
(Decentralized City Management Project)
between
INTERNATIONAL DEVELOPMENT ASSOCIATION
and
AGENCE D’EXECUTION DES TRAVAUX URBAINS
Dated July 1, 1999
CREDIT NUMBER  3234 BEN
PROJECT AGREEMENT
AGREEMENT, dated July 1, 1999, between INTERNATIONAL DEVELOPMENT ASSOCIATION 
(the Association) and AGENCE D’EXECUTION DES TRAVAUX URBAINS (AGETUR).
WHEREAS (A)
by the Development Credit Agreement of even date herewith between 
Republic of Benin (the Borrower) and the Association, the Association has agreed to 
make available to the Borrower an amount in various currencies equivalent to eighteen 
million nine hundred thousand Special Drawing Rights (SDR 18,900,000), on the terms 
and conditions set forth in the Development Credit Agreement, but only on conditions 
that AGETUR agree to undertake such obligations toward the Association as are set 
forth in this Agreement;
(B)
by a subsidiary agreement to be entered into between the Borrower and 
AGETUR, part of the proceeds of the credit provided for under the Development Credit 
Agreement will be made available to AGETUR on the terms and conditions set forth in 
said AGETUR Subsidiary Agreement; and
WHEREAS AGETUR, 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, the Preamble to this Agreement and in the General 
Conditions (as so defined) have the respective meanings therein set forth.
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ARTICLE II
Execution of the Project
Section 2.01. (a) AGETUR 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 Parts B, C.1 and C.2* of the Project with due diligence and 
efficiency and in conformity with appropriate administrative, financial, engineering 
and technical practices, and shall provide, or cause to be provided, promptly as 
needed, the funds, facilities, services and other resources required for Parts B, C.1 
and C.2* of the Project.
(b)
Without limitation upon the provisions of paragraph (a) of this Section 
and except as the Association and AGETUR shall otherwise agree, AGETUR shall carry out 
Parts B, C.1 and C.2* of the Project in accordance with the Implementation Program set 
forth in Schedule 4 to the Development Credit 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 3 to 
the Development Credit Agreement.
Section 2.03. (a) AGETUR shall carry out the obligations set forth in Sections 
9.03, 9.04, 9.05, 9.06 and 9.07 of the General Conditions (relating to insurance, use 
of goods and services, plans and schedules, records and reports, and maintenance, 
respectively) in respect of the Project Agreement.
(b)
For the purposes of Section 9.07 of the General Conditions and without 
limitation thereto, AGETUR shall: 
(i)
prepare jointly with the CUs, on the basis of guidelines 
acceptable to the Association and furnish to 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 Association and 
AGETUR, a plan for the future operation of Parts B, C.1 and C.2* 
of the Project; and
(ii)
afford the Association a reasonable opportunity to exchange views 
with AGETUR on said plan.
Section 2.04. AGETUR shall duly perform all its obligations under the AGETUR 
Subsidiary Agreement.  Except as the Association shall otherwise agree, AGETUR shall 
not take or concur in any action which would have the effect of amending, abrogating, 
assigning or waiving the AGETUR Subsidiary Agreement or any provision thereof.
Section 2.05. (a) AGETUR 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 under the AGETUR Subsidiary Agreement, and 
other matters relating to the purposes of the Credit.
(b) 
AGETUR 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 AGETUR of its 
obligations under this Agreement and under the AGETUR Subsidiary Agreement.
ARTICLE III
Management and Operations of AGETUR
Section 3.01 AGETUR shall carry on its operations and conduct its affairs in 
accordance with sound administrative, financial, technical and environmental practices 
under the supervision of qualified and experienced management assisted by competent 
staff in adequate numbers.
Section 3.02. AGETUR shall at all times operate and maintain its assets, 
equipment and other property and, from time to time, promptly as needed, make all 
necessary repairs and renewals thereof, all in accordance with sound engineering, 
financial, technical and environmental practices.
Section 3.03. AGETUR shall take out and maintain with responsible insurers , or 
make other provision satisfactory to the Association for, insurance against such risks 
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and in such amounts as shall be consistent with appropriate practice.
ARTICLE IV
Financial Covenants
Section 4.01. (a) AGETUR shall maintain records and accounts adequate to reflect 
in accordance with sound accounting practices its operations and financial condition.
(b) AGETUR 
shall:
(i)
have its records, accounts and financial statements (balance 
sheets, statements of income and expenses and related statements) 
for each fiscal year, including Special Account A and the AGETUR 
Project Account, 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; and
(iii)
furnish to the Association such other information concerning said 
records, accounts and financial statements as well as the audit 
thereof, as the Association shall from time to time reasonably 
request. 
Section 4.02. (a) Without limitations upon the provisions of Section 4.01 of 
this Agreement, AGETUR shall carry out a time-bound action plan acceptable to the 
Association for the strengthening of its financial system for the Project in order to 
enable the Borrower, not later than June 30, 2001, or such later date as the 
Association shall agree, to prepare quarterly Project management reports, acceptable 
to the Association. Each such report shall:
(i)
set forth actual sources and application of funds for the Project, 
both cumulatively and for the period covered by said report, and 
projected sources and application of funds for the Project for the 
six-month period following the period covered by said report, and 
show separately expenditures financed out of the proceeds of the 
Credit during the six-month period following the period covered by 
said report;
(ii)
describe physical progress in Project implementation, both 
cumulatively and for the period covered by said report, and 
explain variances between the actual and previously forecast 
implementation targets; and
(iii)
set forth the status of procurement under the Project and 
expenditures under contracts financed out of the proceeds of the 
Credit, as at the end of the period covered by said report. 
(b)
Upon completion of the action plan referred to in paragraph (a) of this 
Section, AGETUR shall prepare, in accordance with guidelines acceptable to the 
Association, and furnish to the Association not later than 45 days after the end of 
each calendar quarter a Project Management Report for such period.
ARTICLE V
Effective Date; Termination;
Cancellation and Suspension
Section 5.01. This Agreement shall come into force and effect on the date upon 
which the Development Credit Agreement becomes effective.
Section 5.02. (a) This Agreement and all obligations of the Association and of 
AGETUR thereunder shall terminate on the earlier of the following two dates:
(i)
the date on which the Development Credit Agreement shall terminate 
in accordance with its terms; or
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(ii)
the date  fifteen  years after the date of this Agreement.
(b)
If the Development Credit Agreement terminates in accordance with its 
terms before the date specified in paragraph (a) (ii) of this Section, the Association 
shall promptly notify  AGETUR of this event.
Section 5.03. All the provisions of this Agreement shall continue in full force 
and effect notwithstanding any cancellation or suspension under the General 
Conditions.
ARTICLE VI
Miscellaneous Provisions
Section 6.01. Any notice or request required or permitted to be given or made 
under this Agreement and any agreement between the parties contemplated by this 
Agreement shall be in writing.  Such notice or request shall be deemed to have been 
duly given or made when it shall be delivered by hand or by mail, telegram, cable, 
telex or radiogram to the party to which it is required or permitted to be given or 
made at such party’s address hereinafter specified or at such other address as such 
party shall have designated by notice to the party giving such notice or making such 
request.  The addresses so specified are:
For the Association:
International Development Association
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address: 
Telex:
INDEVAS
248423 (MCI) or
Washington, D.C.
 64145 (MCI)
For  AGETUR:
Agence d’ Exécution des Travaux Urbains
01 BP 2780 R.P.
Cotonou, 
République du Bénin
Section 6.02. Any action required or permitted to be taken, and any document 
required or permitted to be executed, under this Agreement on behalf of AGETUR may be 
taken or executed by the Director General of AGETUR or such other person or persons as 
the Director General shall designate in writing, and AGETUR shall furnish to the 
Association sufficient evidence of the authority and the authenticated specimen 
signature of each such person.
Section 6.03. This Agreement may be executed in several counterparts, each of 
which shall be an original, and all collectively but one instrument.
IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized 
representatives, have caused this Agreement to be signed in their respective names in 
the District of Columbia, United States of America, as of the day and year first above 
written.
INTERNATIONAL DEVELOPMENT ASSOCIATION
By /s/ Theodore Ahlers
Regional Vice President
Africa
AGENCE D’EXECUTION DES TRAVAUX URBAINS
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By /s/ Lucien Tonoukouin
Authorized Representative