GRANT NUMBER D985-TD Project Agreement (Chad Energy Access Scale-Up Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and SOCITA NATIONALE D'ELECTRICITA PROJECT AGREEMENT AGREEMENT between the INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association") and SOCIATt NA TIONALE D'ELECTRICITA ("SNE" or "Project Implementing Entity") ("Project Agreement") in connection with the Financing Agreement ("Financing Agreement") of the Signature Date between the REPUBLIC OF CHAD ("Recipient) and the Association, concerning GrantNo. D985-TD. The Association and the Project Implementing Entity 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 Project Implementing Entity declares its commitment to the objectives of the Project. To this end, the Project Implementing Entity shall carry out Parts 1.1, 1.2 and 4.1(b) 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 Parts 1.1, 1.2 and 4.1(b) 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 years after the Signature Date. ARTICLE IV - REPRESENTATIVE; ADDRESSES 4.01. The Project Implementing Entity's Representative is its Director General. 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 -3- (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: the Project Implementing Entity's address is: Socit6 Nationale d'Electricit6 11, rue du Colonel Largeau N'Djamena Republic of Chad AGREED as of the later of the two dates written below. INTERNATIONAL DEVELOPMENT ASSOCIATION By Autforized Representative Name: Title: Date: SOCI&T6 NATIONALE D'ELECTRICITt By Authorized Representative / Name: 4-1-/\ P---;I'q ~STitle: Date: S- -4- SCHEDULE Execution of the Project Implementing Entity's Respective Parts of the Project Section I. Implementation Arrangements A. Institutional Arrangements 1. The Recipient shall: (a) have overall responsibility for the Project; (b) carry out Parts 1.3, 2, 3, 4.1(a), 4.2, 4.3 and 5 of the Project through its Ministry of Petroleum and Energy; and (c) cause the Project Implementing Entity ("SNE") to carry out Parts 1.1, 1.2 and 4.1(b) of the Project. 2. For purposes of Project implementation, the Project Implementing Entity shall maintain the SNE-PIU throughout Project implementation, with mandate, compositions, terms of reference, resources and staffing satisfactory to the Association and further set out in the Project Implementation Manuals, as said SNE-PIU shall be responsible for day-to-day implementation on technical, fiduciary, environmental and social, and monitoring and evaluation aspects of Parts 1.1, 1.2 and 4.1(b) of the Project. 3. Without prejudice to paragraph 2 immediately above, the Project Implementing Entity shall ensure that the SNE-PIU is at all times during Project implementation: (a) supported by the Owner's Engineer, for purposes of supervision of construction works under Part 1.1. of the Project; and (b) staffed with personnel in adequate numbers, including at least: (i) a procurement specialist; (ii) a financial management specialist; (iii) an environmental specialist; (iv) a social specialist; (v) an organizational health and safety specialist; and (vi) a sexual exploitation and abuse and sexual harassment specialist; all with terms of reference, qualifications, integrity and experience satisfactory to the Association. B. Subsidiary Agreement 1 . To facilitate the carrying out of the Project Implementing Entity's Respective Parts of the Project, the Project Implementing Entity shall enter into a subsidiary agreement with the Recipient, under terms and conditions approved by the Association ("Subsidiary Agreement"), which shall make part of the proceeds of the Financing allocated from time to time to Categories (1) or (3) of the table set forth in Section III.A. of this Schedule, available to the Project Implementing Entity ("On-Granting"). 2. The Subsidiary Agreement shall provide inter alia the following: (a) the On-Granting shall: (i) be denominated in Euro; and (ii) be the equivalent in Euro (determined as of the date or respective dates of withdrawal from the Grant Account) of the value of the currency or currencies withdrawn from the Grant Account or paid out of the Designated Account for the Project on account of the cost of works, goods, services, training and Operational Costs and to be financed under the Subsidiary Agreement out of the proceeds of the Financing allocated from time-to-time to Categories (1) or (3); -5- (b) the Recipient shall: (i) require SNE to: (A) carry out its Respective Parts of the Project with due diligence and efficiency and in accordance with sound technical, economic, energy, financial, managerial, environmental, and social standards and practices satisfactory to the Association, including in accordance with the provisions of the Financing Agreement, this Agreement the ESCP, the Project Implementation Manuals and the Anti-Corruption Guidelines applicable to recipients of loan proceeds other than the Recipient; and (B) provide, promptly as needed, the resources required for the purpose; and (ii) without limitation upon the provisions of Section 5.03 of the General Conditions, provide, or cause to be provided, adequate security to SNE, the contractors, sub-contractors and other parties involved in the implementation of the Project Implementing Entity's Respective Parts of the Project; and (c) the Recipient shall obtain rights and specify SNE's obligations adequate to protect the interests of the Recipient and those of the Association, including: (i) the right to suspend or terminate the right of SNE to use the proceeds of the Financing or to obtain a refund of all or any part of the amount of the On-Granting then withdrawn, upon SNE's failure to perform any of its obligations under the Subsidiary Agreement; (ii) SNE's obligation to maintain policies and procedures adequate to enable it to monitor and evaluate, in accordance with the monitoring and evaluation indicators, the progress of its Respective Parts of the Project and the achievement of its objectives; (iii) SNE's obligation: (A) to maintain a financial management system and prepare financial statements in accordance with consistently applied accounting standards acceptable to the Association, both in a manner adequate to reflect the operations, resources and expenditures related to the Project; and (B) at the Association's or the Recipient's request, to have such financial statements audited by independent auditors acceptable to the Association, in accordance with consistently applied auditing standards acceptable to the Association, and promptly furnish the statements as so audited to the Recipient and the Association; (iv) SNE's obligation to enable the Recipient and the Association to inspect the Project, its operation and any relevant records and documents; (v) SNE's obligation to comply with the ESCP; and (vi) SNE's obligation to prepare and furnish to the Recipient and the Association all such information as the Recipient or the Association shall reasonably request relating to the foregoing. 3. Unless agreed otherwise in writing with the Association, the Subsidiary Agreement shall set out modalities and procedures acceptable to the Association pursuant to which the Project Implementing Entity shall carry out on an interim basis, until December 31, 2022 or until the establishment of the MPE-PIU, whichever date falls the earliest, or any other later date agreed upon in writing with the Association, selected activities under Parts 1.3(a), 2.2(a), 4.1(a)(ii) and (iii), and 4.2, as allocated under Category (3). 4. The Project Implementing Entity shall exercise its rights under the Subsidiary Agreement in such manner as to protect the interests of the Recipient and the Association and to accomplish the purposes of the Financing. Except as the Association shall otherwise agree, the Project Implementing Entity shall not assign, amend, abrogate or waive the Subsidiary Agreement or any of its provisions. Notwithstanding the foregoing, if any of the provisions of the Subsidiary Agreement is inconsistent with the provisions of the Financing -6- Agreement, this Agreement or the Project Implementation Manuals, as the case may be, the provisions of the Financing Agreement shall prevail and govern. C. Project Implementation Manuals 1. The Project Implementing Entity shall prepare and maintain, in accordance with terms of reference acceptable to the Association, a Project Implementation Manual, containing detailed arrangements and procedures for: (a) institutional coordination and day-to-day execution of the Project; (b) monitoring, evaluation, reporting and communication; (c) administration, financial management, procurement and accounting, as financial management and procurement procedures may be further defined in separate financial management and procurement sections to be adopted within six (6) months after the Effective Date; (d) environmental and social aspects; and (e) such other administrative, technical and organizational arrangements, and procedures as shall be required for purposes of implementation of the Project ("SNE Project Implementation Manual"). 2. Unless agreed otherwise in writing with the Association, the SNE Project Implementation Manual shall set out additional detailed arrangements and procedures acceptable to the Association for the implementation of selected activities under Parts 1.3(a), 2.2(a), 4.1 (a)(ii) and (iii), and 4.2, as allocated under Category (3) in Section III.A. of Schedule to the Financing Agreement, on an interim basis, until December 31, 2022 or until the establishment of the MPE-PIU, whichever date falls the earliest, or until any other later date agreed upon in writing with the Association, as said arrangements and procedures shall comply with the requirements under paragraph 1 immediately above. 3. The Project Implementing Entity shall implement its Respective Part of the Project in accordance with the SNE Project Implementation Manual, provided, however, that, in the event of any conflict between the provisions of the Project Implementation Manuals and those of the Financing Agreement or this Agreement, those in the Financing Agreement shall prevail. 4. Except as the Association shall otherwise agree, the Project Implementing Entity shall not amend, waive or otherwise modify the Project Implementation Manuals, or any provision thereof if, in the opinion of the Association, such amendment, waiver or other modification may materially and adversely affect the implementation of the Project. D. Environmental and Social Standards 1 . The Project Implementing Entity shall ensure that 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 Project Implementing Entity shall ensure that 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 Project Implementing Entity shall ensure that: (a) the measures and actions specified in the ESCP are implemented with due diligence and efficiency, and provided in the ESCP; -7- (b) sufficient funds are available to cover the costs of implementing the ESCP; (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. Without limitation upon the provisions of paragraph 2 above, if sixty (60) days prior to the Closing Date, the Association determines that there are measures and actions specified in the ESCP which will not be completed by the Closing Date, the Project Implementing Entity shall: (a) not later than thirty (30) days before the Closing Date, prepare and present to the Association, an action plan satisfactory to the Association on the outstanding measures and actions, including a timetable and budget allocation for such measures and actions (which action plan shall deemed to be considered an amendment of the ESCP); and (b) thereafter, carry out said action plan in accordance with its terms and in a manner acceptable to the Association. 4. In case of any inconsistencies between the ESCP and the provisions of the Financing Agreement or this Agreement, the provisions of this Agreement shall prevail. 5. The Project Implementing Entity 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 the Project which has, or is likely to have, a significant adverse effect on the environment, the affected communities, the public or workers, any workplace accidents that result in death, serious or multiple injury, pollution, or any violent labor unrest or dispute between the Recipient or the Project Implementing Entity 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. 6. The Project Implementing Entity shall establish, publicize, maintain and operate an accessible grievance mechanism, to receive and facilitate resolution of concerns and -8- 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. The Project Implementing Entity shall ensure that all bidding documents and contracts for civil works under the Project include the obligation of contractors, subcontractors, supervising entities and Owner's Engineer 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. E. Annual Work Plans and Budget 1 . The Project Implementing Entity shall, in consultation with the Recipient, not later than November 30 of each calendar year during the implementation of the Project (or one (1) month after the Effective Date for the first year of Project implementation), prepare and furnish to the Association for its approval: (a) a draft annual work plan and budget containing all proposed activities for inclusion in the Project during the following calendar year of Project implementation (including Training and Operating Costs); and (b) any instruments required by the Environmental and Social Commitment Plan ("ESCP") for the implementation of the activities included in the draft annual work plan and budget. 2. The Project Implementing Entity shall afford the Association a reasonable opportunity to exchange views with the Recipient on such proposed annual work plan and budget, and after approval by the Association, shall carry out such Annual Work Plan and Budget ("AWPB") during the period covered by the AWPB. Only those activities that are included in an Annual Work Plan and Budget shall be eligible for financing out of the proceeds of the Financing. 3. The Project Implementing Entity shall ensure that the Project is implemented in accordance with the AWPB (provided, however, that in the event of any conflict between the AWPB and the provisions of the Financing Agreement or this Agreement, the provisions of the Financing Agreement shall prevail). 4. Except with the prior and written concurrence of the Association, the AWPB shall not be waived, amended or otherwise revised to include new activities. Section II. Project Monitoring, Reporting and Evaluation A. Project Reports 1 . The Project Implementing Entity shall monitor and evaluate the progress of Part 1.1, 1.2 and 4.1(b) of the Project and prepare Project Reports for Parts 1.1, 1.2 and 4.1(b) 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 -9- than one (1) month 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 Project Implementing Entity shall provide to the Recipient not later than six (6) 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. Section III. Other Undertakings 1. The Project Implementing Entity shall ensure that the SNE-PIU has: (a) recruited: (i) an additional accountant within three (3) months after the Effective Date, and (ii) a procurement specialist within two (2) months after the Effective Date; both with terms of reference, qualifications, integrity and experience satisfactory to the Association; (b) opened a designated account for the Project Implementing Entity's Respective Parts of the Project no later than one (1) month after the Effective Date, under terms and conditions satisfactory to the Association; (c) acquired, installed and customized an accounting software for the Project, with terms and specifications acceptable to the Association, with terms and specifications acceptable to the Association, not later than three (3) months after the Effective Date; and (d) put in place: (i) adequate mechanisms satisfactory to the Association to incorporate technical inputs in procurement-related documents; (ii) adequate contract management plans for key procurement contracts under the Project; and (iii) related Training; in form and substance satisfactory to the Association, within two (2) months after the Effective Date.