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GRANT AGREEMENT

RURAL ELECTRIFICATION PROJECT

BETWEEN

INDONESIA AND CANADA

AGREEMENT BETWEEN
THE GOVERNMENT OF CANADA
AND
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
ON
RURAL ELECTRIFICATION
The Government of Canada and the Government of the Republic of Indonesia,
wishing to cooperate in the development of rural electrification in
Indonesia, have agreed to the following:
ARTICLE I
Responsible Authorities
1.


The Government of Canada designates the Canadian International
Development Agency (hereinafter ref erred to as "CIDA") as the Agency
responsible for the implementation of its obligations under this
Agreement.

2.

The Government of the Republic of Indonesia designates the Directorate
General of Cooperatives (hereinafter referred to as "DGC") of the
Department of Trade and Cooperatives as the Agency responsible for the
implementation of its obligations under this Agreement.
ARTICLE II
The Project

1.

The two parties to this Agreement shall participate in Rural Electrification, hereinafter called "the Project".

2.


Objective of the Project
The objective of the Project is to establish non-profit single purpose
rural electric cooperatives at sites in Lampung, Sumatra;
Tenggara Barat;

3.

Lombok, Nusa

and Luwu, Sulawesi.

Description of the Project
The Project shall cons i st of the provision of qualified Canadian

- 2 engineering consultant services by CIDA and the provision of supporting
services and facilities by the DGC to undertake the Project as set out
in Annex A of this Agreement.
ARTICLE III
Workplan
1.


The Government of Canada and the Government of the Republic of
Indonesia agree to complete this Agreement within approximately five
years of the commencement of the work by undertaking the Project as
set out in Annex A which constitutes an integral part of this Agreement .
Annex A shall:
a)

provide a detailed description of the work;

and

b)

state the obligations and r esponsibilities of the Government of
Canada and the Government of the Republic of Indonesia.
ARTICLE IV
Financial Contribution of the Government of Canada

The Government of Canada through CIDA will contribute an amount not exceeding

$1,500,000.00 (Canadian) to pay the cost of Canadian engineering services
and will provide such services as detailed in Annex A.
Financial Contribution of the Government of the
Republic of Indonesia
The Government of the Republic of Indonesia will bear the cost of providing
qualified counterpart personnel and the cost of the necessary administrative
assistance and local support as detailed in Annex A.
ARTICLE V
Implementation
The two governments and their designated agents shall ensure that this
Agreement is carried out with due diligence and efficiency and each shall
furnish the other all such information as shall be reasonably requested.

- 3 -

ARTICLE VI
Connnunications
1.

Any communications or documents given, made or sent by either government

or their designated agents pursuant to this Agreement or Annex hereto
shall be in writing and shall be deemed to have been duly given, made or
sent to the party to which it is addressed at the time of its delivery by
hand, mail, telex, cable or radiogram at its respective address, namely:
For Indonesia:

For Canada:

Mailing Address:

Direktur Jendral Koperasi
Departemen Perdangan dan
Koperasi
Jl. Letjen Haryono M.T.
P.O. Box 384
Jakarta, Selatan
Indonesia

Cable Address:


DITJENKOP Telex JKT 44183

Mailing Address:

The President
Canadian International
Development Agency
200 rue Principale
Hull, Quebec
KIA OG4
Canada

Cable Address:

CIDAHULL

ARTICLE VII
Evaluation
Periodic evaluations of the Project will be carried out as agreed upon by
the Government of Canada and the Government of Indonesia.

ARTICLE VIII
General Provisions
1.

This agreement shall become effective on the date of signature and shall
expire upon completion of the project or on any date mutually agreed upon
by the Parties.

It supercedes any previous arrangements concerning this

Project made between the Government of Canada and the Government of the
Republic of Indonesia.

- 4 2.

This Agreement does not constitute an international treaty.

It is

intended only to set out the administrative responsibilities of the

two Governments in relation to Canadian technical and economic assistance
made available to the Government of the Republic of Indonesia within
the framework of technical cooperation between the two countries.
3.

This Agreement may be amended at any time with the mutual consent of
the two Parties by an Exchange of Letters.

IN WITNESS WHEREOF, the undersigned, on behalf of their respective
Governments have signed this Agreement.

Signed at Jakarta on

FOR THE
CANADA

OF
セvernmt@

Signed

Terrence lッョ・イセ。ヲ@
Charge d'Affaires

November 16, 1978

in duplicate.

FOR THE GOVERNMENT OF THE
REPUBLIC OF INDONESIA

セᄋ@

Signed

i ter of the Department of
e and Cooperatives

I.

ANNEX "A"

1.0

DESCRIPTION OF PROJECT
1.1

The Canadian International Development Agency (CIDA) and the
United States Agency for International Development (USAID)
have agreed to assist the Government of Indonesia in establishing
rural electrification cooperatives similar to the USAID program
in the Philippines.

The report of the National Rural

Electrification Cooperative Association (NRECA) Study team,
published in May 1976, concluded that there were many densely
populated rural areas which could support non-profit, consumerowned electric utilities but were beyond the reach of the
national power grid system of the Indonesian Electricity
Authority, Perusahaan Umum Listrik Negara (PLN) .

The Government


of Indonesia selected three sites at Lampung in Sumatra; Lombok
in

Nusa Tenggara Barat, and Luwu in Sulawesi for the development

of non-profit member-owned electrical cooperatives.

CIDA has

agreed to provide loan funds for the purchase of equipment for
the three diesel generating stations required of these sites
and grant aid funds to cover the cost of a Canadian consulting
firm which will coordinate its work, described below, with a
USAID consultant responsible for the electricity distribution
systems.
2.0

DESCRIPTION OF THE WORK
2.1

The work, under grant aid funding consists of consulting
engineering services for engineering design and supervision
of construction for three diesel generating stations at Central
Lampung, Lombok and Luwu required to meet the load demand of
the electric cooperatives being established by the Directorate
General of Cooperatives (DGC).

- 2 -

3.0

RESPONSIBILITIES AND OBLIGATIONS OF THE GOVERNMENT
OF CANADA
3.1

The Government of Canada shall, through CIDA:
3.1.1

Provide the services of an engineering Consulting firm
to carry out the description of work described in
paragraph 2.0 above.

3.1.2

Provide funds that will be used to pay the costs
incurred in providing such services including fees,
salaries and other emoluments, travel costs between
Canada and Jakarta, Indonesia and other appropriate
expenses of the Canadian Consultant and his personnel
not provided for by the Government of Indonesia.

3.1.3

Provide miscellaneous expenses incurred in relation to
the Project outside Indonesia.

3.1.4

Provide supplies, equipment (excluding vehicles) and
materials which are required to implement the Project
which will need to be imported into Indonesia.

3.1.5

Review monthly progress reports from the Canadian Consultant
and take such action as may be required to ensure the
successful completion of the Project.

3.1.6

Require the Canadian Consultant to prepare and maintain
in both narrative and diagrammatic form a Plan of Work
which will clearly show the scheduling and achieved
progress for each activity of the Project under his
jurisdiction.

3.1.7

Require the Canadian Consultant to submit directly to
both the DGC and CIDA its monthly progress reports.

- 3 -

4.0

RESPONSIBILITIES AND OBLIGATIONS OF THE GOVERNMENT
OF THE REPUBLIC OF INDONESIA
4.1

The Government of Indonesia shall, through the designated
authority:
4.1.1

Provide all equipment, materials and supplies not
provided under 3.1 above together with services and
labour required to complete the Project.

4.1.2

Provide qualified Indonesian counterpart staff as
required to successfully implement the Project and
ensure its continual operation after handover to the DGC.

4.1.3

Provide, free of charge, all temporary and permanent
accommodation (together with basic furnishings to
acceptable standards), as required in Indonesia for
all Canadian personnel assigned to the Project.

4.1.4

Provide out-of-station allowances in accordance with
Indonesian regulations while travelling on projectrelated duties away from permanent accommodation in
Indonesia.

4.1.5

Provide, free of charge, transportation and drivers
while on official project business, such facilities
being provided for personal use as appropriate.

4.1.6

Provide and bear the cost of transporting consultants'
professional and personal effects between their point
of entry into Indonesia and their duty station in
Indonesia.

4.1 .7

Provide without charge, appropriate air-conditioned
office accommodation (in remote sites, as soon as
adequate electrical supply is available ) for the
engineering consultant staff together with necessary
furnishings (including typewriters), clerical staff,

- 4 typists, domestic telephone and postal services and any
other office facilities required to implement the Project.
4.1.8

Ensure that a counterpart fund or a project budget is in
place to cover local costs, as described in the above
articles of this section, incurred in the execution of the
Project.

Payments from this fund will be made subject to

approval of the Government of the Republic of Indonesia.
4.1.9

Provide exemption from Import, Customs and other duties
and taxes in accordance with the existing laws and regulations of the Government of the Republic of Indonesia on:
a)

all professional and technical equipment required
for the use of Canadian personnel for their assignments throughout the period of the Project;

b)

and

personal and household effects of the Canadian
personnel.

Import, Customs and other duties and taxes shall be paid
by the Canadian personnel in accordance with the existing
laws and regulations of the Government of the Republic of

J.

Indonesia, if the effects mentioned in a) and b) above
are sold.
4.1.10

Release Canadian personnel who do not have permanent
residence in Indonesia from payment of resident and
local taxes for the duration of this Project.

4.1.11

Inform the Canadian personnel of all local regulations
which may affect their work.

4.1.12

Indemnify in accordance with the existing laws and regulations, without cost to the Government of Canada, and
saving harmless the Canadian engineers from and against,
all claims, losses, damages, costs, actions and other
proceedings made, sustained, brought, or prosecuted in

- 5 -

any manner based upon, occasioned by or attributed to
any injury, infringements, damages or death arising
from any action occuring during the performance or the
purported performance of their functions pursuant to
any agreement between the Canadian personnel and the
Government of Canada.

This provision shall not relieve

any person from liability for any grossly negligent,
criminal or fraudulent act .
4.1.13

Provide:
a)

all permits, licences and other documents necessary
to enable the Canadian personnel to carry out their
respective responsibilities in Indonesia; and

b)

all export and exit permits required for the r eturn
to Canada of any of the materials, equipment, effects
(including personal effects), which are property of
the Canadian personnel.

4.1.14

Provide reasonable access to those parts of Indonesia
required to enable the Canadian engineers to carry out
their responsibilities in accordance with the existing
laws and regulations of the Government of the Republic
of Indonesia.