CONFORMED COPY CREDIT NUMBER 385 JO Development Credit Agreement (Amman Water Supply and Sewerage Project II) BETWEEN 0 THE HASHEMITE KINGDOM OF JORDAN AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED MAY 24, 1973 CONFORMED COPY CREDIT NUMBER 385 JO Development Credit Agreement (Amman Water Supply and Sewerage Project II) BETWEEN THE HASHEMITE KINGDOM OF JORDAN AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED MAY 24, 1973 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated May 24, 1973, between the HASHEMITE KINGDOM OF JORDAN (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) The Borrower has requested the Association to assist in the financing of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) Part I of the Project will be carried out by Amman Municipal Area Water and Sewerage Authority a corporate body as established by Law No. 19 of 1973 (hereinafter referred to as AWSA) with the Borrower's assistance and, as part of such assistance, the Porrower will make available to AWSA the proceeds of the Credit for Part 1 of the Project as hereinafter provided; (C) The Borrower shall carry out Part 2 of the Project; and (D) The Association is willing to make the Credit available upon the terms and conditions set forth hereinafter and in a project agreement of even date herewith between the Association and AWSA; NOW THEREFORE the p%rties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated January 31, 1969, with the same force and effect as if they were fully set forth herein, subject, however, to the following modifications thereof (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions): (a) Jection 5.01 is deleted; (b) Section 6.02(h) is deleted and Section 6.02(i) becomes 6.02(h). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective 4 meanings therein set forth and the following additional terms have the following meanings: (a) "Project Agreement" means the agreement between the Association and AWSA of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement; (b) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and AWSA pursuant to Section 3.01(b) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreement; (c) "NRA" means the National Resources Authority of the Borrower established by Law No. 12 of 1968 as may be amended from time to time. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equivalent to eight million seven hundred thousand dollars ($8,700,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agr e.nent, as such Schedule shall be amended from time to time, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement and to be financed under the Development Credit Agreement; provided, however, that, except as the Association shall otherwise agree, no withdrawal shall be made on account of expenditures in the territories of any country which is not a member of the Bank (other than Switzerland) or for goods produced in, or services supplied from, such territories. Section 2.03. Except as the Association shall otherwise agree, the goods and services required for the Project and to be financed out of the proceeds of the Credit shall be procured pursuant to the provisions set forth or referred to in Section 2.04 of the Project Agreement. Section 2.04. The Closing Date shall be December 31, 1977 or such other date as shall be agreed between the Borrower and the Association. 5 Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Service charges shall be payable semi-annually on April 15 and October 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each April 15 and October 15 commencing October 15, 1983 and ending April 15, 2023, each installment to and including the installment payable on April 15, 1993 to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.09. For the purposes of Part 1 of the Project the Chairman of the Board of Directors of AWSA or such other person as he may appoint in writing is designated as representative of the Borrower for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) Without any limitation or restriction upon any of its other obligations under the Development Credit Agreement, the Borrower shall cause AWSA to perform in accordance with the provisions of the Project Agreement and the Subsidiary Loan Agreement all the obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable AWSA to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall relend the proceeds of the Credit for Part I of the Project to AWSA for a term of twenty-nine years including four year's grace period on the principal and to bear an interest of 6% per annum under a subsidiary loan agreement to be entered into between the Borrower and AWSA under terms and conditions which shall have been approved by the Association. 6 (c) The Borrower shall convert any existing loans from the Borrower to the Amman Municipality for sewerage and storm-drainage into equity of the said Municipality in AWSA. (d) The Borrower shall exercise its rights under the Subsidiary Loan Agreement in such manner as to protect the interests of the Borrower and the Association and to accomplish the purposes of the Credit, and except as the Association shall otherwise agree, the Borrower shall not assign, nor amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. Section 3.02. The Borrower shall furnish to the Association the proposed legislation for establishing a National Water and Sewerage Board sufficiently in advance for the Association to comment on any matter that may affect AWSA. Section 3.03. The Borrower shall assist AWSA and Wadi Sir Municipality in establishing equitable allocations of Wadi Sir spring water between each other by not later than June 30, 1974 or such other date as shall be agreed upon between the Borrower and the Association. Section 3.04. The Borrower shall cause NRA to properly install and maintain the hydrological equipment under the Project. Section 3.05. The Borrower shall employ engineering consultants acceptable to the Association to carry out Part 2 of the Project under terms and conditions acceptable to the Borrower and the Association. Section 3.06. The Borrower shall furnish or cause to be furnished to the Association for its approval, promptly upon their preparation, such studies, plans, designs, specifications and supporting documents relating to Part 2 of the Project in such detail as the Association shall reasonably request. ARTICLE IV Consultation, Information and Inspection Section 4.01. The Borrower and the Association shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, the Borrower and the Association shall from time to time, at the request of either party: (a) exchange views through their re. -esentatives with regard to the performance of their respective obligations ,tnder the Development Credit 7 Agreement, the performance by AWSA of its obligations under the Project Agreement, the administration, operations and financial condition, of AWSA and, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out any part of the Project, and other matters relating to the purposes of the Credit; and (b) furnish to the other all such information as it shall reasonably request with regard to the general status of the Credit. On the part of the Borrower, such information shall include information with respect to financial and economic conditions in the territories of the Borrower, including its balance of payments, and the external debt of the Borrower, of any of its political subdivisions and of any agency of the Borrower or of any such political subdivision. Section 4.02. (a) The Borrower shall furnish or cause to be furnished to the Association all such information as the Association shall reasonably request concerning the administration, operations and financial condition, of AWSA and, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out any part of the Project. (b) The Borrower and the Association shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Credit, the maintenance of the service thereof, the performance by either of them of its obligations under the Development Credit Agreement or the performance by AWSA of its obligations under the Project Agreement and the Subsidiary Loan Agreement. Section 4.03. The Borrower shall afford all reasonable opportunity for accredited representatives of the Association to visit any part of the territories of the Borrower for purposes related to the Credit. ARTICLE V Taxes and Restrictions Section 5.01. The principal of, and service charges on, the Credit shall be paid without deduction for, and free from, any taxes imposed under the laws of the Borrower or laws in effect in its territories. Section 5.02. The Development Credit Agreement and the Project Agreement shall be free from any taxes on or in connection with the execution, delivery or registration thereof, imposed under the laws of the Borrower or laws in effect in its territories. 8 Section 5.03. The payment of the principal of, and service charges on, the Credit shall be free from all restrictions, regulations, controls and moratoria of any nature imposed under the laws of the Borrower or laws in effect in its territories. ARTICLE VI Remedies of the Association Section 6.01. If any event specified in Section 7.01 of the General Conditions or in Section 6.03 of this Agreement shall occur and shall continue for the period, if any, therein set forth, then at any subsequent time during the continuance thereof, the Association, at its option, may by notice to the Borrower declare the principal of the Credit then outstanding to be due and payable immediately together with the service charges thereon and upon any such declaration such principal and service charges shall become due and payable immediately, anything to the contrary in the Development Credit Agreement notwithstanding. Section 6.02. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified: (a) AWSA shall have failed to carry out any of its obligations under the Project Agreement or the Subsidiary Loan Agreement. (b) The Amman Municipal Area Water and Sewerage Authority Law 19 of 1973 shall have been amended so as to impair the ability of the Borrower or AWSA to carry out its obligation under the Development Credit Agreement, the Project Agreement or the Subsidiary Loan Agreement. Section 6.03. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified: (a) the event specified in Section 6.02(a) of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower; and (b) the event specified in Section 6.02(b) of this Agreement shall occur. ARTICLE VII Effective Date; Termination Section 7.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 10.01(b) of the General Conditions: 9 (a) The execution and delivery of the Project Agreement on behalf of AWSA hav-- been duly authorized or ratified by all necessary corporate. and governmental action. (b) The execution and delivery of the Subsidiary Loan Agreement on behalf of the Borrower and AWSA, respectively, have been duly authorized or ratified by all necessary corporate and governmental action. Section 7.02. The following are specified as additional matters, within the meaning of Section 10.02(b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association: (a) That the Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, AWSA, and constitutes a valid and binding obligation of AWSA in accordance with its terms. (b) That the Subsidiary Loan Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, the Borrower and AWSA, respectively, and constitutes a valid and binding obligation of the Borrower and AWSA in accordance with its terms. Section 7.03. The date August 22, 1973 is hereby specified for the purposes of Section 10.04 of the General Conditions. ARTICLE VIII Representative of the Borrower; Addresses Section 8.01. The President of the National Planning Council of the Borrower is designated as representative of the Borrower for the purposes of Section 9.03 of the General Conditions. Section 8.02. The following addresses are specified for the purposes of Section 9.01 of the General Conditions: For the Borrower: National Planning Council P.O. Box 555 Amman, Jordan 10 Cable address: NPC Amman For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names and to be delivered in the District of Columbia, United States of America, as of the day and year first above written. THE HASHEMITE KINGDOM OF JORDAN By /s/ Z. Mufti Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s / M.P. Benjenk Regional Vice President, Europe, Middle East and North Africa SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of amounts of the Credit to each Category and the percentage of eligible expenditures so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Categori Dollar Equivalent) to be Financed I. Equipment and 3,540,000 spare parts (a) Directly 100% of foreign Imported expenditures (b) Manufactured 100% of total Locally expenditures (ex-factory) 11. Civil Works 3,110,000 60% of total expenditures III. Consultants' 900,000 100% of foreign services and expenditures Training IV. Studies 370,000 100% of foreign expenditures V. Unallocated 780,000 TOTAL 8,700,000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures for goods produced in, or services supplied from, the territories, and in the currency, of any country other than the Borrower. 12 (b) the term "total expenditures" means the aggregate of foreign expenditures and of expenditures for goods produced in, or services supplied from, the territories of the Borrower. 3. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of: (a) expenditures prior to the date of this Agreement except that withdrawals may be made in respect of Category III on account of expenditures incurred after December 1971 in an aggregate amount not exceeding the equivalent of two hundred and fifty thousand dollars ($250,000); and (b) payments for taxes imposed under the laws of the Borrower or laws in effect in its territories on goods or services, or on the importation, manufacture, procurement or supply thereof. To the extent that the amount represented by the percentage set forth in the third column of the table in paragraph I above in respect of any Category would exceed the amount payable net of all such taxes, such percentage shall be reduced to ensure that no proceeds of the Credit will be withdrawn on account of payments for such taxes. 4. Notwithstanding the allocation of an amount of the Credit set forth in the second column of the table in paragraph 1 above: (a) if the estimate of the expenditures under any Category shall decrease, the amount of the Credit then allocated to such Category and no longer required therefor will be reallocated by the Association by increasing correspondingly the unallocated amount of the Credit; and (b) if the estimate of the expenditures under any Category other than Category IV shall increase, the percentage set forth in the third column of the table in paragraph I above in respect of such expenditures shall be applied to the amount of such increase, and a corresponding amount will be allocated by the Association, at the request of the Borrower, to such Category from the unallocated amount of the Credit, subject, however, to the requirements for contingencies, as determined by the Association, in respect of any other expenditures; and (c) if the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in Section 2.04 of the Project Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restricting or limiting any other right, power or remedy 13 of the Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. 5. Notwithstanding the percentages set forth in the third column of the table in paragraph I above, if the estimate total expenditures under Category II shall increase and no proceeds of the Credit are available for reallocation to such Category, the Association may, by notice to the Borrower, adjust the percentage then applicable to such expenditures in order that further withdrawals under such Category may conti' Lle until all expenditures thereunder shall have been made. 14 SCHEDULE 2 Description of the Project The Project consists of two components. Part 1 of the Project is part of the Borrower's updated master plan for water supply and sewerage in Amman and consists of the following items: Part 1 A Water Supply (i) Construction of a new pumping station at Tadj (capacity of about 360 lit/sec) including aeration and chlorination facilities, a new booster station and installation of additional pumps at Ras el Ain pumping station. (ii) Expansion and replacement of the water distribution network, including the installation of about 20 km of large diameter pipes (trunk mains), 80 km of medium and small diameter pipes (distribution network including house connections), one service reservoir with a capacity of 4,000 m3, and an improved communications system between key reservoirs and pumping stations. Also included are about 12,000 water meters some of which will be used for replacement. (iii) Drilling of two new boreholes and improvement of the existing installations, including new submersible pumps, water production meters, chlorination facilities and pumphouses. (iv) Provision for employing a specialized firm to undertake a leak detection survey, the mapping of leaks in the network and preparation of a repair/replacement program. (v) Construction of office building, garage, store and meter repair shop for AWSA and supply of hydrological equipment. B Sewerage (i) Construction of a 2 km sewer main (500 mm) in Amman center and about 100 km of sewer laterals and house connections. Also, 15 about 8 km of sewer laterals to complete the ongoing program of laterals construction. (ii) Minor improvements to the sewerage treatment plant. C Consulting Services (i) Consulting services for management studies, master plan and preliminary engineering and for detailed design and supervision of construction of the project. (ii) Assistance for training of AWSA's administrative, operation and maintenance staff. Part 2 of the Project consists of studies by consultants to: (a) review existing studies, surveys, plans, etc. for basic infrastructure development for the town of Aqaba and for the surrounding region, taking into account the likely development of industry, including a proposed free industrial and commercial zone, transport and tourism in the area; and to propose recommendations for the development of roads, water, sewerage, and electric power; and (b) elaborate on the existing Aqaba Tourism Development Plan by (i) reintegrating into said plan some essential works including recreational facilities, (ii) adding a hotel training center; and (iii) undertaking new studies to revise, up-date and complement the existing plan and studies. The Project is expected to be completed in June 1977.