DOCUMENTS CREDIT NUMBER 2004 PAK WAPDA Project Agreement (Private Tubewell Development Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and WATER AND POWER DEVELOPMENT AUTHORITY OF PAKISTAN Dated ,1989 CREDIT NUMBER 2004 PAK WAPDA PROJECT AGREEMENT AGREEMENT, dated 0fj, 1989, between INTERNATIONAL DEVELOPMENT ASSOVATION (the Association) and WATER AND POWER DEVELOPMENT AUTHORITY OF PAKISTAN (WAPDA). WHEREAS (A) by the Development Credit Agreement of even date herewith between the Islamic Republic of Pakistan (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to twenty-six million three hundred thousand Special Drawing Rights (SDR 26,300,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that WAPDA agree to undertake such obligations toward the Association as are set forth in this Agreement; (B) a portion of the proceeds of the credit provided for under the Development Credit Agreement will be made available to WAPDA; and WHEREAS WAPDA, 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. ARTICLE II Execution of the Project Section 2.01. (a) WAPDA 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 A, C.1 and C.2(a) of the Project with due diligence and efficiency and in conformity with appropriate administrative, -2- financial, engineering and public utility practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for Parts A, C.l and C.2 (a) of the Project. (b) Without limitation upon the provisions of paragraph (a) of this Section and except as the Association and WAPDA shall otherwise agree, WAPDA shall carry out Parts A, C.1 and C.2(a) of the Project in accordance with the Implementation Program set forth in Schedule 4 to the Development Credit Agreement. (c) WAPDA shall, for the purposes of Parts A, C.1 and C.2 (a) of the Project, open and maintain in dollars a special account in the National Bank of Pakistan on terms and conditions satisfactory to the Association. Deposits into, and payments out of, such Special Account shall be made in accordance with the provisions of Schedule 5 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 Parts A, C.1 and C.2(a) of 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. WAPDA 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 WAPDA Project Agreement and Parts A, C.1 and C.2(a) of the Project. Section 2.04. (a) WAPDA shall, at the request of the Association, exchange views with the Association with regard to the progress of Parts A, C.1 and C.2 (a) of the Project, the performance of its obligations under this Agreement and other matters relating to the purposes of the Credit. (b) WAPDA shall promptly inform the Association of any co-rAition which interferes or threatens to interfere with the progress of Parts A, C.1 and C.2(a) of the Project, the accomplishment of the purposes of the Credit, or the performance by WAPDA of its obligations under this Agreement. -3- Section 2.05. Except as the Association shall otherwise agree, WAPDA shall, not later than June 30, 1989, review with the Association, the findings and recommendations of the studies on the least cost power network configuration and the pilot load management scheme can led out under Part C.1 of the Project, and shall thereafter implement such recommendations. ARTICLE III Financial and Other Covenants Section 3.01. (a) WAPDA shall maintain records and accounts adequate to reflect in accordance with sound accounting practices its operations and financial condition in respect of Parts A, C.1 and C.2(a) of the Project. (b) WAPDA shall: (i) have such records and accounts and the records and accounts for the WAPDA Special Account 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 enO of each such year, 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 and accounts as well as the audit thereof, as the Association shall from time to time reasonably request. Section 3.02. Except as the Association shall otherwise agree, WAPDA shall charge the beneficiaries for electrical connections provided under Part A of the Project at cost. -4- ARTICLE IV Effective Date; Termination; Cancellation and Suspension Section 4.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 4.02. (a) This Agreement and all obligations of the Association and of WAPDA 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 (ii) the date 30 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 WAPDA of this event. Section 4.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. ARTICLE V Miscellaneous Provisions Section 5.01. 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 -5- specified or at such other address as such.party shall have designated by notice to the party giving puch 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 440098 (ITT), Washington, D.C. 248423 (RCA) or 64145 (WUI) For WAPDA: Water and Power Development Authority WAPDA House Lahore, Pakistan Cable address: Telex: WAPDA 44869 WAPDA PK Lahore, Pakistan Section 5.02. Any action required or permitted to be taken, and any document required or permitted to be executed, tinder this Agreement on behalf of WAPDA, or by WAPDA on behalf of qhe Borrower under the Development Credit Agreement, may be taken pt executed by the Chairman, WAPDA, or such other person or persons as he shall designate in writing, and he shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 5.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. -6- 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/l 6 Regional Vice President Europe, ddle East and North Africa WATER AND POWER DEVELOPMENT AUTHORITY OF PAKISTAN By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Development Association. FOR SECRETARY