CREDIT NUMBER 142 TA LOAN NUMBER 586 TA Agreement on Allocation and Disbursement of Proceeds of Financing (Second Highway Project) BETWEEN UNITED REPUBLIC OF TANZANIA AND KINGDOM OF SWEDEN AND INTERNATIONAL DEVELOPMENT ASSOCIATION AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED FEBRUARY 24, 1969 0 CREDIT NUMBER 142 TA LOAN NUMBER 586 TA Agreement on Allocation and Disbursement of Proceeds of Financing (Second Highway Project) BETWEEN UNITED REPUBLIC OF TANZANIA AND KINGDOM OF SWEDEN AND INTERNATIONAL DEVELOPMENT ASSOCIATION AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED FEBRUARY 24, 1969 AGREEMENT, dated February 24, 1969, between the UNITED REPUBLIC OF TANZANIA (hereinafter called the Bor- rower), the KINGDOM OF SWEDEN (hereinafter called Sweden), INTERNATIONAL DEVELOPMENT ASSOCIATION (here- inafter called the Association) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS by separate agreements with the Borrower each of even date herewith the Association and the Bank have severally agreed to provide financing to the Borrower in amounts equivalent, respectively, to US $8,000,000 and US $7,000,000 for the purpose of assisting the Borrower in financing the reconstruction of the Morogoro-lyayi sec- tion of the Tan-Zam Highway linking Dar es Salaam with Zambia; WHEREAs by an agreement of even date herewith between Sweden and the Borrower, Sweden has agreed to make available to the Borrower a credit in the principal amount of SKr 78,000,000, equivalent, at present parity rate, as near as possible to US $15,000,000, for the purpose afore- said; and WHEREAS the Parties hereto deem it to be in their mutual interest that the allocation and disbursement of the pro- ceeds of such financing be regulated as hereinafter pro- vided: Now THEREFORE the Parties hereto hereby agree as follows: ARTICLE I Definitions SECTION 1.01. Unless the context otherwise requires, the following terms wherever used in this Agreement shall have the following meanings: 4 (a) The terms "Bank Agreement" and "Association Agreement" mean the respective agreements between the Bank and the Borrower and the Association and the Bor- rower referred to in the first recital to this Agreement, as from time to time amended. (b) The term "Swedish Agreement" means the agree- ment referred to in the second recital to this Agreement, as from time to time amended. (c) The term "Bank Loan" means the loan provided for in the Bank Agreement. (d) The term "Association Credit" means the credit provided for in the Association Agreement. (e) The term "Swedish Credit" means the credit pro- vided for in the Swedish Agreement. (f) The terms "Loan Account", "Credit Account" and "Swedish Credit Account" mean the respective accounts established under the Bank, Association and Swedish Agreements. (g) The term "Project" means the project described in Schedule 2 to the Bank Agreement. (h) The term "goods" means equipment, materials, sup- plies and services required for the Project. ARTICLE II Authority of the Bank to Represent Sweden and the Association SECTION 2.01. Unless otherwise notified by Sweden and the Association, the Bank shall represent Sweden and the Association in all matters under this Agreement which re- quire the consent or the collective action of Sweden, the Association and the Bank. 5 ARTICLE III Allocation of Proceeds of Financing SECTION 3.01. Subject to the respective provisions of the Bank Agreement, the Association Agreement and the Swedish Agreement, the proceeds of the Bank Loan, the Association Credit and the Swedish Credit may be with- drawn from the Loan Account, the Credit Account and the Swedish Credit Account in accordance with the allo- cation of the said loan and credits set forth in Schedule 1 to this Agreement, as such allocation shall be modified from time to time pursuant to the provisions set forth herein or by further agreement between the Borrower, Sweden, the Bank and the Association. SECTION 3.02. If the estimated cost of the items included in either Category I or Category II of the said Schedule 1 shall decrease, the amount then allocated to, and no longer required for, such Category will be reallocated to Cate- gory III of the said Schedule 1. SECTION 3.03. If the estimated cost of the items included in said Category I or Category II shall increase, an amount equal to the portion of such increase to be financed out of the Bank Loan, the Association Credit and the Swedish Credit will be allocated, at the request of the Borrower, to the appropriate Category from said Category III, sub- ject, however, to the requirements for contingencies, as determined by the Bank in respect of the cost of the items in the other Category. ARTICLE IV Amounts and Proportions of Financing to be Disbursed SECTION 4.01. Subject to the provisions of Section 4.02 hereof, the Borrower shall be entitled to withdraw from the Loan Account, the Credit Account and the Swedish 6 Credit Account in respect of the reasonable cost of goods required for the Project and to be financed under the Bank Agreement, the Association Agreement, the Swedish Agree- ment and this Agreement: (i) such amounts as shall have been paid (or, if the Bank shall so agree, as shall be required to meet payments to be made) in currencies other than the currency of the Bor- rower for expenditures under Category I of Schedule 1 to this Agreement; and (ii) the equivalent of eighty per cent (80%) of such amounts as shall have been paid (or, if the Bank shall so agree, as shall be required to meet payments to be made) for expenditures under Category II of the said Schedule 1, provided, however, that if there shall be an increase in the estimate of such expenditures, the Bank may by notice to the Borrower adjust the above percentage as required in order that the withdrawals of the amount allocated to such Category and not withdrawn may continue pro rata with the expenditures remaining to be made under such Cate- gory. SECTION 4.02. Each application for withdrawal by the Borrower shall constitute an application to withdraw funds under the Bank Agreement, the Association Agreement and the Swedish Agreement and the amount so requested under each Agreement shall be reasonably determined by the Bank by apportioning, as nearly as is practicable in the circumstances, the amount requested in such application in the following respective proportions: (i) initially and until the respective amounts of the Association Credit and the Swedish Credit shall have been fully withdrawn or committed, Sweden 50% and the Asso- ciation 50%; and (ii) thereafter the Bank 100%; provided, however, that in the event that the amount of the Association Credit is exhausted before the amount of 7 the Swedish Credit shall have been fully withdrawn or com- mitted, the proportions specified in the foregoing suk- paragraph (i) shall be revised so that the proportion of Sweden is 100%; and provided further that the proportions specified in the said sub-paragraph (i) may in any case be adjusted by Sweden, the Association and the Bank as and when neces- sary. ARTICLE V Disbursement Procedure SECTION 5.01. When the Borrower shall desire to with- draw the proceeds of the Bank Loan, the Association Credit and the Swedish Credit, the Borrower shall deliver to the Bank a written application in such form, and containing such statements and evidence as the Bank shall reasonably request. SECTION 5.02. The following procedures shall apply to the disbursement of the Association Credit and the Swedish Credit: (i) If the Bank determines that the Borrower's appli- cation for withdrawal is satisfactory, there shall be dis- bursed from the Credit Account an amount duly appor- tioned to the Association in accordance with the provisions of Section 4.02. (ii) The Bank shall not approve such application unless the Bank is satisfied (a) that such application, the accom- panying documents and other evidence submitted by the Borrower conform to the standards prescribed by the Bank for withdrawal applications, and (b) that the amount ap- plied for is to be used only for the purposes specified in the Association and Swedish Agreements. (iii) When the Bank has approved disbursement of such amount under the Association Agreement in accordance with the foregoing, it shall promptly notify the Sveriges 0 8 Riksbank acting as agent for Sweden, that it has received from the Borrower a satisfactory application to withdraw funds (in an aggregate amount to be set forth in such notice, also the amount thereof apportioned to each of the Agreements pursuant to the provisions of Section 4.02 hereof), and that the Bank has approved the disbursement of a specified amount from the Credit Account. Such notice shall be in such form, and contain such other information including the currency or currencies in which disbursement is to be made, and to whom, or on whose order, payment is to be made, as Sweden, the Association and the Bank shall from time to time determine. (iv) Upon receipt of such notice, the Sveriges Riksbank, acting as agent for Sweden, shall, subject to the provisions of the Swedish Agreement (including any rights of sus- pension or termination of withdrawal thereunder), promptly disburse the amount specified in such notice as having been apportioned to Sweden pursuant to the pro- visions of the said Section 4.02 hereof. SECTION 5.03. (a) After the entire proceeds of the Asso- ciation Credit and the Swedish Credit shall have been fully withdrawn or committed, the Bank shall process further applications for withdrawals submitted by the Borrower as applications for withdrawal of the proceeds of the Bank Loan. (b) Upon approval of any such application, the Bank shall promptly disburse from the Loan Account such amounts as the Borrower is entitled to pursuant to the provisions of the Bank Agreement. ARTICLE VI Miscellaneous SECTION 6.01. Any notice or request required or per- mitted to be given or made under this Agreement and any agreement contemplated by this Agreement shall be in 9 writing. Such notice or request shall be deemed to have been duly given or made when it shall have been delivered by hand or by mail, telegram, cable or radiogram to the party to which it is required or permitted to be given or made at such party's address specified below or at such other address as such party shall have designated by notice to the party giving such notice or making such request. For the Borrower: The Principal Secretary The Treasury P.O. Box 9111 Dar es Salaam United Republic of Tanzania Cable address: Treasury Dar es Salaam For Sweden: Sveriges Riksbank Stockholm 2, Sweden Cable address: Riksbanken Stockholm 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. 10 For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Intbafrad Washington, D.C. SECTION 6.02. The Borrower shall furnish to the Bank sufficient evidence of the authority of the person or per- sons who will sign the applications provided for under Articles IV and V of this Agreement or who will, on behalf of the Borrower, take any other action or execute any other documents required or permitted to be taken or executed by the Borrower under this Agreement, and the authenti- cated specimen signature of each such person. SECTION 6.03. This Agreement may be executed in sev- eral counterparts, each of which shall be an original. All such counterparts shall collectively be but one instrument. SECTION 6.04. Except as shall otherwise be agreed by the Parties hereto, this Agreement shall become effective on the earliest date upon which the Swedish Agreement, the Association Agreement and the Bank Agreement shall all be in effect. 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. UNITED REPUBLIC OF TANZANIA By /s/ G. M. RUTABANZIBWA Authorized Representative KINGDOM OF SWEDEN By /s/ HUBERT DE BESCHE Authorized Representative INTERNATIONAL DEVELOPMENT AssocrATioN By /s/ SimoN ALDEWERELD Vice President INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ SimoN ALDEWERELD Vice President 12 SCHEDULE 1 Allocation of Proceeds of Bank Loan, Association Credit and Swedish Credit Allocation (Expressed in US Dollar Equivalent) Category I Consultant's Services for en- gineering and supervision of construction 1,000,000 Category II Road construction contracts 26,000,000 Category III Unallocated 3,000,000 Total $30,000,000 Out of which: Bank Loan 7,000,000 Association Credit 8,000,000 *Swedish Credit 15,000,000 * The above figure has been calculated on the basis of the present parity rate between the Swedish Krona and the US dollar. It is therefore clearly understood that should a change in the foregoing parity occur the dollar equivalent of the Swedish Credit would be affected thereby. It is further noted that the Borrower and Sweden are providing in a separate exchange of letters for the possible partial replacement of the financial facilities under the Swedish Credit.