WICIAX 1 OAN NUMBER 2130 IVCI)CUTS

Loan Agreement

(Second Water Supply Project)

between

REPUBLIC OF THE IVORY COAST

and

INTERNATIONAL BANK FOR RECONSTRUCTIONAND DEVELOPMENT

Dated 844At , 1982

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LOAN NUMBER 2130 IVC

LOAN AGREEMENT

AGREEMENT, dated Lowe, ( , 1982, betweenREPUBLIC OF THE IVORY COAST (hereinafter called the Borrower)and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (here-inafter called the Bank).

WHEREAS (A) the Borrower has requested the Bank to assistin the financing of the Project described in Schedule 2 to thisAgreement by making the Loan as hereinafter provided;

(B) the Borrower intends to contract from the CaisseCentrale de Cooperation Economique (hereinafter called theCaisse) a loan in an amount equivalent to two and one-half billionCFAF to assist in financing a related water supply project on theterms and conditions set forth in an agreement (hereinafter calledthe Caisse Loan Agreement) to be entered into between the Borrowerand the Caisse;

(C) the Project will be carried out by the Borrower'sDirection Centrale de l'Hydraulique (hereinafter called DCH) withthe cooperation of the Societe de Distribution d'Eau de la C8ted'Ivoire (hereinafter called SODECI) within the framework of theConventions as hereinafter defined;

(D) the Borrower will use the proceeds of' the Loan tofinance the execution of the Project by DCH through the inter-mediary of the Borrower's Fonds National de l'Hydraulique(hereinafter called FNH) as hereinafter provided, which proceedsFNH will repay to the Borrower in accordance with the FNH Sub-sidiary Loan Agreement (as defined hereinafter);

(E) upon completion of the Project, SODECI will manage andmaintain the Project facilities; and

WHEREAS the Bank has agreed, on the basis, inter alia, ofthe foregoing, to make the Loan to the Borrower upon the termsand conditions hereinafter set forth;

NOW THEREFORE the parties hereto hereby agree as follows:

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ARTICLE I

General Conditions; Definitions

Section 1.01. The parties to this Agreement accept all

the provisions of the General Conditions Applicable to Loan

and Guarantee Agreements of the Bank, dated October 27, 1980,with the same force and effect as if they were fully set forth

herein (said General Conditions Applicable to Loan and Guarantee

Agreements of the Bank, as so modified, being hereinafter called

the General Conditions).

Section 1.02. Wherever used in this Agreement, unless the

context otherwise requires, the several terms defined in the

General Conditions and in the Preamble to this Agreement have

the respective meanings therein set forth and the following

additional terms have the following meanings:

(a) "FNA" means the Borrower's Fonds National de l'Assainis-

sement;

(b) "FNH Subsidiary Loan Agreement" means the subsidiary

loan agreement to be entered into between the Borrower and FNH

pursuant to Section 3.01 (b) of this Agreement, as the same may be

amended from time to time, and such term includes any schedule tothe FNH Subsidiary Loan Agreement;

(c) "FNH Law" and "FNH Decree" means the Borrower's Law

No. 76-02 of January 2, 1976 and the Borrower's Decree No. 76-64of even date, as amended from time to time, pursuant to which FNH

has been established and organized; and

(d) "Conventions" means the Contrat de Concession and the

Contrat d'Affermage dated July 20, 1959 and June 25, 1974, respec-

tively, between the Borrower and SODECI, as amended from time to

time.

ARTICLE II

The Loan

Section 2.01. The Bank agrees to lend to the Borrower, onthe terms and conditions in the Loan Agreement set forth or

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referred to, an amount in various currencies equivalent toforty-three million dollars ($43,000,000).

Section 2.02. The amount of the Loan may be withdrawnfrom the Loan Account in accordance with the provisions ofSchedule 1 to this Agreement, as such Schedule may be amended fromtime to time by agreement between the Borrower and the Bank, forexpenditures made (or, if the Bank shall so agree, to be made) inrespect of the reasonable cost of goods and services required forthe Project and to be financed out of the proceeds of the Loan.

Section 2.03. Except as the Ba'nk shall otherwise agree,procurement of the goods and civil works to be financed out of theproceeds of the Loan shall be governed by the provisions ofSchedule 4 to this Agreement.

Section 2.04. The Closing Date shall be March 31, 1988or such later date as the Bank shall establish. The Bank shallpromptly notify the Borrower of such later date.

Section 2.05. The Borrower shall pay to the Bank a commitmentcharge at the rate of three-fourths of one per cent (3/4 of 1%)per annum on the principal amount of the Loan not withdrawn fromtime to time.

Section 2.06. The Borrower shall pay interest at the rate ofeleven and three-fifths per cent (11-3/5%) per annum on the prin-cipal amount of the Loan withdrawn and outstanding from time totime.

Section 2.07. Interest and other charges shall be payablesemiannually on March 15 and September 15 in each year.

Section 2.08. The Borrower shall repay the principal amountof the Loan in accordance with the amortization schedule set forthin Schedule 3 to this Agreement.

ARTICLE III

Execution of the Project

Section 3.0i. (a) The Borrower shall carry out Parts E and Fof the Project and shall carry out Parts A through D of theProject through DCH and with the cooperation of SODECI with due

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diligence and efficiency and in conformity with appropriate

administrative, financial, engineering and public utilities

practices, and shall provide or cause to be provided, promptly as

needed, the funds (including funds to cover cost overruns, if

any), facilities, services and other resources required for the

purpose.

(b) The Borrower shall: (i) relend to FNH the proceeds of

the Loan under a subsidiary loan agreement to be entered into

between the Borrower and FNH on condition that FNH shall finance

the execution of the Project by DCH, and upon such other terms and

conditions as shall have been approved by the Bank; and (ii)

exercise its rights under the FNH Subsidiary Loan Agreement

in such manner as to protect the interests of the Borrower and the

Bank and to accomplish the purposes of the Loan.

(c) The Borrower shall duly perform all its obligations

under the FNH Subsidiary Loan Agreement and the Conventions and

except as the Bank shall otherwise agree, the Borrower shall not

take or concur in any action which would have the effect of

assigning, amending, abrogating or waiving the FNH Subsidiary Loan

Agreemett or the Conventions or any provision thereof.

(d) Without limitation upon paragraph (a) of this Section

the Borrower shall make available to FNH funds in an amount

equivalent to not less than US$13,000,000 and to make that money

available to DCH in addition to the proceeds of the Loan as

follows: an amount equivalent to US$8,50C,000 before the start of

the Project and the balance when necessary to enable the latter

to carry out the Project as scheduled.

Section 3.02. (a) The Borrower shall employ consultants whose

qualifications, experience and terms and conditions of employment

shall be satisfactory to the Borrower and the Bank, in order to

assist DCH, in consultation with SODECI in the preparation of

detailed engineering and the supervision of construction works

for the Project, and to carry out sector studies and surveys.

(b) The Borrower shall continue to employ one financial

expert within DCH and one in FNH to assist DCH and FNH in tariff

reviews, financial administration of contracts and financial

management.

(c) The employment of those consultants and the experts

mentioned in paragraphs (a) and (b) of this Section shall be made

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in accordance with principles and procedures satisfactory tothe Bank on the basis of the "Guidelines on the Use of Consultantsby World Bank Borrowers and the World Bank as Executing Agency"published by the Bank in August 1981.

Section 3.03. (a) The Borrower undertakes to insure, or makeadequate provision for the insurance of, the imported goods to befinanced out of the proceeds of the Loan against hazards incidentto the acquisition, transportation and delivery thereof to theplace of use or installation, and for such insurance any indemnityshall be payable in a currency freely usable by the Borrower toreplace or repair such goods.

(b) Except as the Bank shall otherwise agree, the Borrowershall cause all goods and services financed out of the proceedsof the Loan to be used exclusively for the Project.

Section 3.04. (a) The Borrower shall ensure that DCH furnishto the Bank, promptly upon their preparation, the plans, specifi-cations, reports, contract documents and construction and pro-curement schedules for the Project, and any material modificationsthereof or additions thereto, in such detail as the Bank shallreasonably request.

(b) The Borrower: (i) shall maintain records and proceduresadequate to record and monitor the progress of the Project (in-cluding its cost and the benefits to be derived from it), toidentify the goods and services financed out of the proceeds ofthe Loan, and to disclose their use in the Project; (ii) shallenable the Bank's accredited representatives to visit the facili-ties and construction sites included in the Project and to examinethe goods financed out of the proceeds of the Loan and any rele-vant records and documents; and (iii) shall furnish to the Bank atregular intervals all such information as the Bank shall reason-ably request concerning the Project, its cost and, where appro-priate, the benefits to be derived from it, the expenditureof the proceeds of the Loan and the goods and services financedout of such proceeds.

(c) Upon the award by the Borrower of any contract forgoods, works or services to be financed out of the proceeds of theLoan, the Bank may publish a description thereof, the name andnationality of the party to whom the contract was awarded and thecontract price.

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(d) Promptly after completion of the Project, but in any

event not later than six months after the Closing Date or such

later date as may be agreed for this purpose between the Borrower

and the Bank, the Borrower shall prepare and furnish to the Bank a

report, of such scope and in such detail as the Bank shall reason-

ably request, on the execution and initial operation of the

Project, its cost and the benefits derived and to be derived from

it, the performance by the Borrower and the Bank of their respec-

tive obligations under the Loan Agreement and the accomplishment

of the purposes of the Loan.

Section 3.05. The Borrower shall take or cause to be taken

all such action as shall be necessary to acquire as and when

needed all such land and rights in respect of land as shall be

required for the construction and SODECI's operation of the

facilities included in the Project and shall furuish to the Bank,

promptly when requested, evidence satisfactory tc the Bank that

such land and rights in respect of land are available for purposes

related to the Project.

Section 3.06. After completion of the water sector study

included in Part E of the Project, the Borrower shall, on or

before December 31, 1983 (or such later date as the Bank may

agree) review, in consultation with the Bank, the findings and

recommendations included therein.

ARTICLE IV

Other Covenants

Section 4.01. (a) It is the policy of the Bank, in making

loans to, or with the guarantee of, its members not to seek, in

normal circumstances, special security from the member concerned

but to ensure that no other external debt shall have priority over

its loans in the allocation, realization or distribution of

foreign exchange held under the control or for the benefit of

such member. To that end, if any lien shall be created on any

public assets (as hereinafter defined), as security for any

external debt, which will or might result in a priority for the

benefit of the creditor of such external debt in the allocation,

realization or distribution of foreign exchange, such lien shall,

unless the Bank shall otherwise agree, ipso facto and at no cost

to the Bank, equally and ratably secure the principal of, and

interest and other charges on, the Loan, and the Borrower, in

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creating or permitting the creation of such lien, shall makeexpress provision to that effect; provided, however, that, if forany constitutional or other legal reason such provision cannotbe made with respect to any lien created on assets of any ofits political or administrative subdivisions, the Borrower shallpromptly and at no cost to the Bank secure the principal of,and interest and other charges on, the Loan by an equivalentlien on other public assets satisfactory to the Bank.

(b) The foregoing undertaking shall not apply to: (i) anylien created on property, at the time of purchase thereof, solelyas security for payment of the purchase price of such property;and (ii) any lien arising in the ordinary course of bankingtransactions and securing a debt maturing not more than one yearafter its date.

(c) As used in this Section, the term "public assets"means assets of the Ivory Coast. of any political or administra-tive subdivision thereof and of any entity owned or controlled by,

or operating for the account or benefit of, the Ivory Coast or anysuch subdivision, including gold and foreign exchange assets heldby any institution performing the functions of a central bank orexchange stabilization fund, or similar functions, for the IvoryCoast provided, however, that for the purposes of this Section theterm "entity" shall not apply to Ivory Coast State Companies whichare organized as business corporations in accordance with laws and

regulations applicable to private companies and whose activitiesare not reflected in the Ivory Coast budget, except that theprovisions of this Section shall apply to any such entity to theextent that it would hold any foreign exchange assets on behalf ofIvory Coast.

Section 4.02. The Borrower shall use its best endeavorsto cause SODECI, within the framework of the Conventions tooperate and maintain the facilities included in the Project uponcompletion thereof in accordance with appropriate administrative,engineering and public utility practices and with due regard toeconomy.

Section 4.03. (a) The Borrower shall ensure that DCH and FNHmaintain, and shall use its best endeavors to cause SODECI tomaintain, within the framework of the Conventions, records ade-quate to reflect in accordance with consistently maintained

appropriate accounting practices (including, without limitation,appropriate depreciation accounting practices on fixed assets) the

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operations and the respective financial conditions of FNH and

SODECI.

(b) The Borrower shall cause FNH, and shall use its best

endeavors to cause SODECI, within the framework of the Conven-

tions, to have their respective accounts and financial statements

(balance sheets, statements of income and expenses and related

statements) for each fiscal year audited in accordance with

appropriate auditing principles consistently applied, by indepen-

dent auditors acceptable to the Bank; in the case of SODECI, such

audit shall include the auditor's review of and comment on the

accuracy of SODECI's costing system, the appropriateness of the

allocation of overhead charges to its different activities and the

auditor's opinion that the amounts billed and collected by SODECI

on behalf of FNH and FNA during each month of the fiscal year

(including levies on private groundwater extraction) accurately

reflect the meter-reading registered and the correct tariff

categories.

(c) The Borrower shall furnish and shall cause SODECI to

furnish to the Bank as soon as available, but in any case not

later than nine months after the end of each such year: (i)

certified copies of FNH and SODECI's respective financial

statements for such year as so audited; (ii) the reports and

comments by said auditors, of such scope and in such detail as

the Bank shall have reasonably requested; and (iii) such other

information concerning the accounts and financial statements of

FNH and SODECI and the audit thereof as the Bank shall from time

to time reasonably request.

Section 4.04. The Borrower shall establish during 1983 at

the latest a register of all water supply fixed assets owned or

operated by SODECI; these assets shall be revalued as of Janu-

ary 1, 1983 and the register shall be kept up to date. The

Borrower shall also establish global sector accounts for DCH,

reflecting the recommendations of the study to be carried out

under Part E (ii) of the Project.

Section 4.05. Except as the Bank shall otherwise agree, the

Borrower shall not permit FNH to incur any debt, unless a forecast

shows that the balance of FNH's revenues and expenditures for

each fiscal year during the term of the debt to be incurred will

be at least equal to the projected total debt service of FNH for

such year. For the purposes of this Section:

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(a) "debt" means any debt incurred by FNH maturing morethan one year after the date on which it is originally incurred.

(b) Debt shall be deemed to be incurred: (i) under a loancontract or agreement or other instrument providing for suchdebt or for the modification of its terms of payment, on thedate, and to the extent, the amount of such debt has becomeoutstanding pursuant to such contract, agreement or instrument;and (ii) under a guarantee agreement, on the date the agreementproviding for such guarantee has been entered into but only tothe extent that the guaranteed debt is outstanding.

(c) "balance" means gross income of FMR from all sources(excluding capital grants for works), less al. operating costsof FNH.

(d) "debt service" means the aggregate amount of amortiza-tion of, and interest and other charges on debt, excluding anydebt for which reimbursements are made by the Borrower to FNH.

Section 4.06. (a) Subject to paragraph (b) of this Section,by October of each year, the Borrower shall adjust water sur-charges to assure that the estimated proceeds of such surcharges,to be collected by SODECI in the calendar yr Ar following thatOctober and transferred to FNH, together with other funds avail-able to FNH shall be sufficient:

(i) to cover the debt service of FNH inthat following calendar year; and

(ii) to build up a surplus fund.

This surplus fund shall be in the books of FNH by making annualfund allocations equal to 3% of FNH's debt service duringeach particular calendar year to a surplus account in FNH'sbooks, until the aggregate allocations so made equal not lessthan 10% of FNH's debt service.

(b) If during any review, as provided in paragraph (a) ofthis Section, it appears that the existing surcharge for thefollowing year will be sufficient to meet the requirements setforth in paragraph (a) (i) and (ii) above without adjustment, theBorrower shall consult with the Bank on the possible introduc-tion of a general water tariff policy which would be based eitheron a rate of return on net fixed assets in service for which

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SODECI is responsible pursuant to the Conventions or on a certain

net cash generation objective, in accordance with the recommenda-

tions of the water sector study, to be carried out under Part E(ii) of the Project.

(c) The Borrower shall continue to review and, if necessary,

adjust each year by October the basic water rate component of

the water tariff to assure that it will cover the cost of oper-ation and maintenance of the water systems for which SODECI is

responsible in accordance with sound public utility practices.

Section 4.07. In the event that the Conventions, or any

provision thereof, are not renewed as and when they terminate in

accordance with their terms, the Borrower shall make arrangements

for the carrying on, under terms and conditions satisfactory to

the Bank, of the operations theretofore carried out by SODECI

pursuant to the provisions of the Conventions.

Section 4.08. The Borrower shall maintain the exemption of

water supply facilities and operations of value added tax, taxe

de la prestation de service, or, for the purposes of the Project,

provide FNH each fiscal quarter with budgetary grants equivalent

to the value added tax and the taxe de la prestation de servicecollected on water supply facilities and operations.

ARTICLE V

Remedies of the Bank

Section 5.01. For the purposes of Section 6.02 of the General

Conditions, the following additional events are specified pursaant

to paragraph (k) thereof:

(a) The Borrower or FNH, as the case may be, shall have

failed to perform any of their tespective covenants, agreementsor obligations under the FNH Subsidiary Loan Agreement.

(b) An extraordinary situation shall have arisen which shall

make it improbable that FNH shall be able to perform its obliga-tions under the FNH Subsidiary Loan Agreement.

(c) The FNH Law or the FNH Decree or the FNH Subsidiary Loan

Agreement shall have been amended materially, suspended, abro-

gated, rescinded, repealed or waived, without the Bank's prior

approval.

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(d) The Borrower or any other authority having jurisdictionshall have taken any action for the dissolution or disestablish-ment of FNH, or for the suspension of its operations.

(e) The Conventions between the Borrower and SODECI shallhave been amended, suspended, abrogated, rescinded or waived insuch a way as to materially and adversely affect SODECI's capacityto operate and maintain the facilities constructed under theProject or the ability of the Borrower to fulfill its obligationshereunder, as the case may be.

Section 5.02. For the purposes of Section 7.01 of the GeneralConditions, the following events are specified pursuant to para-graph (h) thereof:

(a) the event specified in paragraph (a) of Section 5.01of this Agreement shall occur and shall continue for a period ofsixty days after notice thereof shall have been given by the Bankto the Borrower and FNH; and

(b) any event specified in paragraph (c), (d) or (e) ofSection 5.01 of this Agreement shall occur.

ARTICLE VI

Effective Date; Termination

Section 6.01. The following events are specified as addi-tional conditions to the effectiveness of the Loan Agreementwithin the meaning of Section 12.01 (c) of the General Conditions:

(a) the FNH Subsidiary Loan Agreement shall have beenduly signed by all parties concerned and authorized or ratified byall necessary corporate and governmental action and all condi-tions, if any, precedent to disbursement thereunder shall havebeen fulfilled; and

(b) funds to an amount of at least US$8,500,000 equivalentare available to FNH pursuant to the provisions of Section 3.01(b) of this Agreement.

Section 6.02. The following is specified as an additionalmatter, within the meaning of Section 12.02 (c) of the GeneralConditions, to be included in the opinion to be furnished to the

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Bank, namely, that the FNH Subsidiary Loan Agreement has been

duly authorized or ratified by the Borrower and FNH, and is

legally binding upon the Borrower and FNH in accordance with itsterms.

Section 6.03. The date, g4ePAW 21' "OZ, is hereby speci-

fied for the purposes of Secti 12.04 of the General Conditions.

ARTICLE VII

Representative of the Borrower; Addresses

Section 7.01. The Minister of Economy and Finance of the

Borrower is designated as representative of the Borrower for thepurposes of Section 11.03 of the General Conditions.

Section 7.02. The following addresses are specified for the

purposes of Section 11.01 of the General Conditions:

For the Borrower:

Ministere de 1'Economie etdes Finances

AbidjanIvory Coast

Cable address: Telex:

MINIFIN MINIFIN 747Abidjan Abidjan

For the Bank:

International Bank forReconstruction and Development

1818 H Street, N.W.Washington, D.C. 20433United States of America

Cable address: Telex:

INTBAFRAD 440098 (ITT)Washington, D.C. 248423 (RCA) or

64145 (WUI)

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IN WITNESS WHEREOF, the parties- hereto, actir through their

representatives thereunto duly authorized, ha\ caused this

Agreement to be signed in their respective names 'in the Districtof Columbia, United States of America, as of the day and year

first above written.

REPUBLIC OF THE IVORY. COAST

By ( ect- ~~&AutHorized Representative

INTERNATIONAL BANK FOR

RECONSTRUCTION AND DEVELOPMENT

Regional Vice PresidentWestern Africa

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SCHEDULE 1

Withdrawal of the Proceeds of the Loan

1. The table below sets forth the Categories of items to be

financed out of the proceeds of the Loan, the allocation of the

amounts of the Loan to each Category and the percentage of

expenditures for items so to be financed in each Category:

Amount of the

Loan Allocated % of

(Expressed in Expenditures

Category Dollar Equivalent) to be Financed

(1) Equipment

(a) for DCH 9,600,000 ) 100% of foreign) expenditures) and 80% of) local expendi-) tures

(b) for land 700,000 )register )

(2) Civil works 17,400,000 70%

including house

connections

(3) Consultants'services,technical assis-

tance and training

(a) for DCH 6,100,000 ) 90%

(b) for land register 1,900,000 )

(4) Unallocated 7,300,000

TOTAL 43,000,000

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2. For the purposes of this Schedule:

(a) the term "foreign expenditures" means expenditures inthe currency of any country other than the Borrower and for goodsor services supplied frpm the territory of any country other thanthe Borrower; provided, however, that if the currency of theBorrower is also that of another country from the territory ofwhich goods or servic.es are supplied, expenditures in suchcurrency for such goods or services shall be deemed to be"foreign expenditures"; and

(b) the term "local expenditures" means expenditures inthe currency of the Borrower or for goods or services suppliedfrom the territory of the Borrower.

3. The disbursement percentages have been calculated incompliance with the policy of the Bank that no proceeds of theLoan shall be disbursed on account of payments for taxes leviedby, or in the territory of, the Borrower on goods or services,or on the importation, manufacture, procurement or supplythereof; to that end, if the amount of any such taxes leviedon or in respect of any item to be financed out of the proceedsof the Loan decreases or increases, the Bank may, by notice tothe Borrower, increase or decrease the disbursement percentagethen applicable to such item as required to be consistent withthe aforementioned policy of the Bank.

4. Notwithstanding the provisions of paragraph 1 above, no with-drawals shall be made in respect of payments made for expendituresprior to the date of this Agreement.

5. Notwithstanding the allocation of an amount of the Loan orthe disbursement percentages set forth in the table in paragraph 1above, if the Bank has reasonably estimated that the amount ofthe Loan then allocated to any Category will be insufficient tofinance the agreed percentage of all expenditures in thatCategory, the Bank may, by notice to the Borrower: (i) reallocateto such Category, to the extent required to meet the estimatedshortfall, proceeds of the Loan which are then allocated toanother Category and which in the opinion of the Bank are notneeded to meet other expenditures; and (ii) if such reallocationcannot fully meet the estimated shortfall, reduce the disbursementpercentage then applicable to such expenditures in order thatfurther withdrawals under such Category may continue until allexpenditures thereunder shall have been made.

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6. If the Bank shall have reasonably determined that the

procurement of nay item in any Category is inconsistent with the

procedures set forth or referred to in this Agreement, no

expenditures for such item shall be financed out of the proceeds

of the Loan and the Bank may, without in any way restricting or

limiting any other right, power or remedy of the Bank under the

Loan Agreement, by notice to the Borrower, cancel such amount of

the Loan as, in the Bank's reasonable opinion, represents the

amount of such expenditures which would otherwise have been

eligible for financing out of the proceeds of the Loan.

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SCHEDULE 2

Description of the Project

The Project will comprise the major part of the Ivory Coastwater supply investment program for improvement and expansion ofthe existing systems, for the period 1982 through 1985.

The Project consists of the following Parts:

Part A: Abidjan

(i) Supply and installation of 24 well pumps, pipe layingand construction of four Ph adjustment plants to increase thewater production facilities of the North, West, North-East,Anonkoua-Koute, Abobo-Baoule and Niangon-2 Zones;

(ii) construction of five ground level storage tanks of about5 000 m3 each and one elevated storage tank of about 1000m to provide additional reservoir capacity for the North,North-East, Anonkoua-Koute, Abobo-Baoule, and Niangon-2 Zones;

(iii) supply and laying of a transmission main pipe of about7 km length and with a diameter of 600 mm, from Niangon to Adjame;

(iv) laying of about 90 km pipes of 200 mm diameter and about125 km pipes of less than 200 mm diameter to expand the waterdistribution system of Abidjan; and

(v) installation of central production and pressure controlsystems.

Part B: Other Cities

Supply and laying of about 300 km distribution extensionpipes, construction of about 17 production wells and additions toexisting production and storage facilities in approximately 50cities other than Abidjan.

Part C: House Connections Program

Installation of about 10,000 house connections and approxi-mately 100 standpipes in Abidjan.

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Part D: Village Wells

Drilling and equipping of approximately 300 wells in the

other region and provision of vehicles to supervise execution of

these works.

Part E: Studies and Technical Assistance

(i) A study of ground water resources in the Abidjan

area to determine how best to meet long-term-water demands;

(ii) a study of the Borrower's water sector to assess long-

term development needs and the appropriate institutional arrange-ments to meet them;

(iii) a study of a central water production and pressure

control system in Abidjan;

(iv) training for DCH's and FNH's staff; and

(v) strengthening of DCH's and FNH's management by theprovision of the services of experts.

Part F: Establishing and Updating of a Land Register by:

(a) Supply and installation of a computer and related

equipment; and

(b) carrying out of land surveys for a government land

register.

The Project is expected to be completed by March 31, 1987.

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SCHEDULE 3

Amortization Schedule

Payment of PrincipalDate Payment Due (expressed in dollars)*

On each March 15 and September 15

beginning September 15, 1986through September 15, 1998 1,655,000

On March 15, 1999 1,625,000

* The figures in this column represent dollar equivalentsdetermined as of the respective dates of withdrawal; seeGeneral Conditions, Section 3.04.

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Premiums on Prepayment

The following percentages are specified as the premiums

payable on repayment in advance of maturity of any portion of

the principal amount of the Loan pursuant to Section 3.04 (b)

of the General Conditions:

Time of Prepayment Premium

Not more than three years

before maturity 2.05%

More than three years but not

more than six yearsbefore maturity 4.10%

More than six years but not

more than eleven yearsbefore maturity 7.50%

More than eleven years but not

more than fifteen years

before maturity 10.25%

More than fifteen years

before maturity 11.60%

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SCHEDULE 4

Procurement

A. International Competitive Bidding

1. Except as provided in Part C hereof, goods and civil worksshall be procured under contracts awarded in accordance withprocedures consistent with those set forth in the current editionof the "Guidelines for Procurement under World Bank Loans and IDACredits" published by the Bank in March 1977 (hereinafter calledthe Guidelines), on the basis of international competitive biddingas described in Part A of the Guidelines.

2. For goods and works to be procured on the basis of inter-national competitive bidding, in addition to the requirementsof paragraph 1.2 of the Guidelines, the Borrower shall prepareand forward to the Bank as soon as possible, and in any eventnot later than 60 days prior to the date of availability to the-ublic of the first tender or prequalification documents relatingthereto, as the case may be, a general procurement notice, in suchform and detail and containing such information as the Bank shallreasonably request; the Bank will arrange for the publication ofsuch notice in order to provide timely notification to prospectivebidders of the opportunity to bid for the goods and works inquestion. The 'Borrower shall provide the necessary information toupdate such notice annually so long as any goods or works remainto be procured on the basis of international competitive bidding.

3. (i) Bidders for the civil works included in Parts A andB of the Project shall be prequalified as describedin paragraph 1.3 of Part A of the Guidelines;and

(ii) contracts for civil works, laying of pipes and thesupply of equipment and pipes will be grouped intolots of sufficient size to attract both local andforeign suppliers and contractors.

4. For the purpose of evaluation and comparison of bids for thesupply of goods to be procured on the basis of internationalcompetitive bidding: (i) bidders shall be required to statein their bid the c.i.f. (port of entry) price for the importedgoods, or the ex-factory price or off-the-shelf price of othergoods, offered in such bid; and (ii) customs duties and other

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import taxes levied in connection with the importation, or the

sales and similar taxes levied in connection with the sale or

delivery, pursuant to the bid, of 'the goods shall not be taken

into account in the evaluation of the bids.

B. Preference for Domestic Manufacturers

In the procurement of goods in accordance with the procedures

described in Part A of this Schedule, goods manufactured in the

Ivory Coast may be granted a margin of preference in accordance

with, and subject to, the following provisions:

1. All bidding documents for the procurement of goods shall

clearly indicate any preference which will be granted, the

information required to establish the eligibility of a bid for

such preference and, the following methods and stages that will be

followed in the evaluation and comparison of bids.

2. After evaluation, responsive bids will be classified in

one of the following three groupst

(1) Group A: bids offering goods manufactured in

Ivory Coast if the bidder shall have established to

the satisfaction of the Borrower and the Bank thatthe manufacturing cost of such goods includes a

value added in the Ivory Coast equal to at least

20% of the ex-factory bid price of such goods.

(2) Group B: all other domestic bids.

(3) Group C: bids offering any other goods.

3. In order to determine the lowest evaluated bid of each

group, all evaluated bids in each group shall first be compared

among themselves, without taking into account customs duties and

other import taxes levied in connection with the importation, and

sales and similar taxes levied in connection with the sale or

delivery, pursuant to the bids, of the goods. Such lowest evalu-

ated bids shall then be compared with each other, and if, as a

result of this comparison, a bid from group A or group B is the

lowest, it shall be selected for the award.

4. If, as a result of the comparison under paragraph 3

above, the lowest bid is a bid from group C, all group C bids

shall be further compared with the lowest evaluated bid from

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group A after adding to the evaluated bid price of the importedgoods offered in each group C bid, for the purpose of this furthercomparison only, an amount equal to: (i) the amount. of customsduties and other import taxes which a non-exempt importer wouldhave to pay for the importation of the goods offered in suchgroup C bid; or (ii) 15% of the c.i.f. bid price of such goodsif said customs duties and taxes exceed 15% of such price. Ifthe group A bid in such further comparison is the lowest, itshall be selected for the award; if not, the bid from group Cwhich, as a result of the comparison under paragraph.3, is thelowest evaluated bid shall be selected.

C. Other Procurement Procedures

1. Contracts for equipment and contracts for civil worksestimated to cost less than the equivalent of $100,000 and$200,000 each, respectively, may be procured in accordance withlocal procedures acceptable to the Bank; provided that the aggre-gate amount of contracts, so procured shall not exceed the equiva-,lent of $2,000,000.

2. Installation of house connections will be undertakenby SODECI under annual contracts to be negotiated with- thatcompany in an aggregate amount not. exceeding the equivalent of$4,000,000.

D. Review of Procurement Decisions by the Bank

1. Review of invitations to bid and of proposed awards and finalcontracts:.

With respect to all contracts .procured on the basis ofinternational competitive bidding:

(a) Before bids are invited, the. Borrower shall furnish tothe Bank, for its comments, the text of the invitations to bidand the specifications and other bidding documents, together witha description of the advertising procedures to be followed forthe bidding, and shall make such modifications in the saiddocuments or procedures as the Bank shall reasonably request. Anyfurther modification to the bidding documents shall require theBank's concurrence before it is issued to the prospective bidders.

(b) After bids have been received and evaluated, the Bor-rower shall, before a final decision on the award is made, inform

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the Bank of the name of the bidder to which it intends to award

the contract and shall furnish to the Bank, in sufficient time for

its review, a detailed report on the evaluation and comparison

of the bids received, and such other information as the Bank

shall reasonably request. The Bank shall, if it determines that

the intended award would be inconsistent with the Guidelines

or this Schedule, promptly inform the Borrower and state the

reasons for such determination.

(c) The terms and conditions of the contract shall not,

without the Bank's concurrence, materially differ from those

on which bids were asked or prequalification invited.

(d) Two conformed copies of the contract shall be furnished

to the Bank promptly after its execution and prior to the

submission to the Bank of the first application for withdrawal of

funds from the Loan Account in respect of such contract.

2. With respect to each contract not governed by the preceding

paragraph, the Borrower shall furnish to the Bank, promptly after

its execution and prior to the submission to the Bank of the

first application for withdrawal of funds from the Loan Account

in respect of such contract, two conformed copies of such con-

tract, together with the analysis of the respective bids or price

quotations, as the case may be, recommendations for award and such

other information as the Bank shall reasonably request. The Bank

shall, if it determines that the award of the contract was not

consistent with the Guidelines or this Schedule, promptly inform

the Borrower and state the reasons for such determination.

3. Before agreeing to any material modification or waiver

of the terms and conditions of a contract, or granting an exten-

sion of the stipulated time for performance of such contract, or

issuing any change order under such contract (except in cases of

extreme urgency) which would increase the cost of the contract by

more than 15% of the original price, the Borrower shall inform

the Bank of the proposed modification, waiver, extension or

change order and the reasons therefor. The Bank, if it determines

that the proposal would be inconsistent with the provisions of

this Agreement, shall promptly inform the Borrower and state

the reasons for its determination.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

CERTIFICATE

I hereby certify that the foregoing is a true

copy of the original in the arch, es of the Interna-

tional Bank for Reconstruction and Develop-

ment.

In witness whereof I have signed this Certifi-

cate and affixed the Seal of the Bank thereunto

this / 2 day of , 198) 198

FOR SECRETARY