Loan Agreement

Public Disclosure Authorized

LOAN NUMBER 2176 EGT

Public Disclosure Authorized Loan Agreement

(Greater Cairo Urban Development Project)

between

ARAB REPUBLIC OF EGYPT

Public Disclosure Authorized and

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

Dated , 1982 Public Disclosure Authorized LOAN NUMBER 2176 EGT

LOAN AGREEMENT

AGREEMENT, dated G? 2 - eRJl> , 1982, between ARAB REPUBLIC OF EGYPT (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank).

WHEREAS (A) the Borrower has requested the Bank to assist in the financing of the P-oject described in Schedule 2 to this Agreement by making the Loan as hereinafter provided;

(B) the Project will be carried out by the Governorate of Cairo and the Governorate of Giza and the Cairo Transport Author- ity of the Borrower with the Borrower's assistance and, as part of such assistance, the Borrower will make available to said Gov- ernorates and the Cairo Transport Authority the proceeds of the Loan as hereinafter provided; and

WHEREAS the Bank has agreed, on the basis inter alia of the foregoing, to make the Loan available to the Borrower upon the terms and conditions set forth hereinafter and in the Project Agreements of even date herewith, naTmely, the Project Agreement between the Bank and the Governorate of Cairo, the Project Agree- ment between the Bank and the Governorate of Giza, and the Project Agreement between the Bank and the Cairo Transport Authority;

NOW THFREFORE the parties 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 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 Agree- ments of the Bank being hereinafter called the General Condi- tions).

Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: -2-

(a) "Prcject Agreements" means the Project Agreement between the Bank and the Governorate of Cairo, the Project Agreement between the Bank and the Governorate of Giza, and the Project Agreement between the Bank and the Cairo Transport Authority, all of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agree- ments and all agreements supplemental !o the Project Agreements;

(b) "CTA" means the Cairo Transport Authority of the Bor- rower;

(c) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and CTA pursuant to Section 3.01 (b) of this Agreement, as the same may be amended from time to time;

(d) "Cairo" means the Governorate of Cairo, a local government entity operating under the Borrower's Local Government Law No. 43 of 1979, as amended;

(e) "Giza" means the Governorate of Giza, a local government entity operating under the Borrower's Local Government Law No. 43 of 1979, as amended; and

(f) "Greater Cairo" means the urban area composed of the city of Cairo, the city of Giza and the city of Shubra El-Kheima of the Governorate of Kalubiya of the Borrower.

ARTICLE II

The Loan

Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to fifty-nine million dollars ($59,000,000).

Section 2.02. The amount of the Loan may be withdrawn from the Loan Account in -ordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Bank, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Loan. -3-

Section 2.03. Except as the Bank shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Loan, shall be governed by the provisions of Schedule 2 to each of the Project Agreements.

Section 2.04. The Closing Date shall be December 31, 1987 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date.

Section 2.05. The Borrower shall pay to the Bank a commit- ment charge 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 from time to time.

Section 2.06. The Borrower shall pay interest at the rate of .leven and three-fifths per cent (11-3/5%) per annum on the principal amount of the Loan withdrawn and outsta-ding from time to time.

Section 2.07. Interest and other charges shall be payable semiannually on March 1 and September in each year.

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

ARTICLE III

Execution of the Project

Section 3.01 (a) Without any limitation or restriction upon any of its other obligations under the Loan Agreement, the Borrower shall cause Cairo, Giza and CTA each to perform in accordance with the provisions of its respective Project Agreement all the obligations therein set forth, shall take or cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable Cairo, Giza and CTA 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 to CTA the equivalent of $20,500,000 out of the proceeds of the Loan, or such other amount as shall be allocated from time to time to Parts C.2 and E of the -4-

Project, under a subsidiary loan agreement to be entered into between the Borrower and CTA under terms and conditions which shall have been approved by the Bank, and which shall include, inter alia, the obligation of CTA to repay to the Borrower the principal amount so relent over a period of 20 years with interest at the rate of 11.60% per annum.

(c) The Borrower shall exercise its rights under the 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, and except as the Bank shall otherwise agree, the Borrower shall not assign, nor amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof.

(d) The Borrower shall make available to each of Cairo and Giza such amounts of the proceeds of the Loan as shall be allocated to its activities under the Project.

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 creating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on assets of any of its political or administrative subdivisions, the Borrower shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, the Loan by an equivalent lien on other public assets satisfactory to the Bank. -5-

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

(c) As used in this Section, the term "public assets" means assets of the Borrower, of any political or administrative subdivision thereof and of any entity owned or controlled by, or operating for the account or ben'.fit of, the Borrower or any such subdivision, including gold and foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Borrower.

Section 4.02. The Borrower shall take all action required on its part to ensure compliance by CTA with its obligations under Section 4.03 of the Project Agreement between the Bank and CTA.

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 pursuant to paragraph (k) thereof:

(a) any of Cairo, Giza or CTA shall have failed to perform any of its obligations under its respective Project Agreement;

(b) CTA shall have failed to perform any of its obligations under the Subsidiary Loan Agreement;

(c) an extraordinary situation shall have arisen which shall make it improbable that any of Cairo, Giza or CTA will be able to perform its obligations under its respective Project Agreement; and

(d) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of CTA or for the suspension of its operations.

Section 5.02. For the purposes of Secticn 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: - 6-

(a) either of the events specified in paragraphs (a) and (b) of Section 5.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower and to Cairo or Giza or CTA, as the case may be; and

(b) the event specified in paragraph (d) of Section 5.01 of this Agreement shall occur.

ARTICLE VI

Effective Date; Termination

Section 6.01. The following event is specified as an additional condition to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions, namely, that the Subsidiary Loan Agreement has been executed on behalf of the Borrower and CTA.

Section 6.02. The following are specified as additional matters, within the meaning of Section 12.02 (c) of the General Conditions, to be included in the opinion or opirions to be furnished to the Bank:

(a) that the Project Agreement between the Bank and Cairo has been duly authorized or ratified by Cairo and is legally binding upon Cairo in accordance with its terms;

(b) that the Project Agreement between the Bank and Giza has been duly authorized or ratified by Giza and is legally binding upon Giza in accordance with its terms;

(c) that the Project Agreement between the Bank and CTA has been duly authorized or ratified by CTA and is legally binding upon CTA in accordance with its terms; and

(d) that the Subsidiary Loan Agreement has been duly authorized or ratified by the Borrower and CTA and is legally binding upon the Borrower and CTA in accordance with its terms.

Section 6.03. The date 02A0A1,g3, is hereby specified for the purposes of Section 12oQ of the General Conditions. -7-

ARTICLE VII

Representatives of the Borrower; Addresses

Section 7.01. The Minister of Investment and International Cooperation or the Under Secretary for International Finance of the Borrower is designated as representative of the Borrower for the purposes 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:

Ministry of Investment and International Cooperation (International Finance Department) 8 Adly Street Cairo, Egypt

Cable address: Telex:

Ministry of Investment and GAFEC UN 348 International Cooperation Cairo

For the Bank:

International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America

Cable address: Telex:

INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) -8-

IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, 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.

ARAB REPUBLIC OF EGYPT

By Author!zed Representative

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

By Regional Vice President Europe, Middle East and North Africa -9-

SCHEDULE 1

Withdrawal c' 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) Civil works 37%

(a) Cairo 12,300,000

(b) Giza 2,500,000

(2) Materials and 100% of for- equipment eign expenditures, 100% of local expenditures ex-factory, and 75% of other local expenditures

(a) Cairo 4,400,000

(b) Giza 1,600,000

(3) Consultants' ser- 100% vices and training

(a) Cairo 10,400,000

(b) Giza 800,000 - 10 -

Amount of the Loan Allocate4 % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (c) CTA 3,600,000

(4) Unallocated 10,500,000

TOTAL 59,000,000

2. For the purposes of this Schedule:

(a) the term "foreign expenditures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower; and

(b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower.

3. Disbursement under Categories (1) (c), (2) (c) and (3) (c) shall be made only after CTA shall have provided the Bank with a plan, satisfactory to the Bank, regarding the measures to be taken by CTA pursuant to the provisions o' Section 4.03 of the Project Agreement between the Bank and CTA.

4. The disbursement percentages have been calculated in compliance with the policy of the Bank that no proceeds of the Loan shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Loan decreases or increases, the Bank may, by notice to the Borrower, increa- or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Bank.

5. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of - 11 -

$400,000, may be made in respect of Category (3) on account of payments made for such expenditures before that date but after June 30, 1982.

6. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph 1 above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Bank may, by notice to the Borrower: (1) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the eisbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made.

7. If the Bank shall have reasonably determined that the procurement of any 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. - i2 -

SCHEDULE 2

Description of the Project

The major objectives of the Project are: (a) to initiate a revised approach to urban transport based on low cost traffic engineering and management measures; (b) to strengthen the capacity of Cairo and Giza in the planning and management of urban development projects; (c) to improve the efficiency of public transport in Greater Cairo; and (d) to improve the living conditions of urban poor in Greater Cairo.

The Project consists of:

Part A: Traffic Engineering and Road Maintenance

1. Improvement of Salah Salem Route through: (a) channelization of six junctions and installation of automated traffic signals; (b) installation of advance warning and other route signs; (c) partial road resurfacing and footpath reconstruction and repair; (d) construction of two lanes for slow-moving vehicles to improve operating conditions on the steep gradients on both sides of the Citadel (Kalaa); and (e) construction of a pedestrian foot bridge.

2. Construction of a three-lane overpass at the junction of Ramses Street and Misr-Sudan Street.

3. (a) Improvement of junctions on the streets connecting the Giza, Galaa and Dokki Squares through installation of automated signals and improvement of lane markings; and (b) implementation of a traffic management scheme in Giza Square.

4. Improvement of Port Said, El-Geish, El Qalaa and El-Azhar Streets, through (a) partial resurfacing of roads and footpaths; and (b) improvement of junctions on said streets.

5. (a) Improvement of Corniche El-Nile Street through road paving, channelization of junctions and installation of automated traffic signals; and (b) carrying out of a feasibility study for additional junctions and road widening schemes on said street.

6. Improvement of Shubra Street through: (a) partial resurfacing of roads and footpaths; (b) improvement of junction and access roads; and (c) relocation of tram lines. - 13 -

7. Construction of access roads and paving of strects in the areas of Manshiet Nasr and El-Shurabeyia.

8. Improvement of Sharikat Street through partial resurfacing of roads, construction of footpaths and channelization of junctions.

9. Paving of selected bus routes, including basic drainage works, in Cairo and Giza.

10. Improvement of the Ghamra depot of Cairo through: (a) provision of rolling stock and related equipment; and (b) construction of a workshop and provision of concrete precasting equipment.

11. Improvement of the Central BLsiness District of Cairo through: (a) implementation of traffic engineering and management measures along selected circulation corridors and access loops and improvement of junctions; and (b) construction of two parking garages.

Part B: Enforcement of Traffic Rules; Training

1. Provision of vehicles, motorcycles, tow trucks and licensing and communications equipment.

2. Improvement of an existing traffic police training center, including the provision of materials and teaching aides.

3. Construction and equipping of vehicle inspection centers and a drivers' training track.

4. Training for selected traffic police officers on various aspects of traffic management and control.

Part C: Institutional Development

1. Cairo:

(a) Preparation of a strategic action plan for Greater Cairo with a view to: (i) identifying priority areas; (ii) recommending specific sectoral priority projects and programs within such areas; and (iii) recommending the institutional and financial arrangements for the implementation of such projects and programs.

(b) Review of urban services in Cairo, including: (i) preparation of an inventory of existing manpower and equipment - 14 -

resources; (ii) preparation of an estimate of the manpower, equipment and material requirements of such services; (iii) recommenda- tions as to the appropriate service levels and the development of suitable operational manuals and procedures; and (iv) a review of staff training needs.

(d) The preparation of a detailed solid waste management program for Cairo City.

2. CTA:

(a) Assistance in the formulation of plans and programs designed to improve the financial situation, organization, management and operating practices and procedures of CTA.

(b) Provision of on-the-job and overseas training.

Part D: Area Upgrading

A pilot program, based on an area development plan, for upgrading works in the Districts of Rod El-Farag and Abdine of Cairo and old Giza and Monira of Giza, including: (a) installation of street lighting; (b) partial levelling and paving of secondary roads and footpaths; and (c) arrangements for removal of refuse, collection of solid waste and cleaning of streets.

Part E: Public Transport

1. Construction of an overhaul center at Gisr El-Suez and provision of related equipment, spare parts and other inventory items.

2. Provision of equipment and training materials for the Monib training center.

Part F: Study

A study to identify a high capacity east-west road.

The Project is expected to be completed by December 31, 1986. - 15 -

SCHEDULE 3

Amortization Schedule

Payment of Principal Date Payment Due (expressed in dollars)*

On each March 1 and September 1

beginning March 1, 1988 through March 1, 2002 1,965,000

On September 1, 2002 2,015,000

* The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal; see General Conditions, Section 3.04. - 16 -

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 1.75%

More than three years but not more than six years before maturity 3.50%

More than six years but not more than eleven years before maturity 6.40%

More than eleven years but not more than sixteen years before maturity 9.30%

More than sixteen years but not more than eighteen years before maturity 10.45%

More than eighteen years before maturity 11.60% UYTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

(RTIFICATE

l hereby certify that the foregoing is a true copy of the original in the archives of the Interna-

tional Bank for Reconstruction and Develop- ment

In witness whercof l have signed this Certifi-

cate and affixed the Seal of the Bank thereunto this 2 day otf 19

VOR SECRETARY