Burundi - Second Forestry Project : Credit 1620 - Credit Agreement - Conformed

OFF C AL CREDIT NUMBER 1620 BU Development Credit Agreement (Second Forestry Project) between REPUBLIC OF BURUNDI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated /3 , 1985 CREDIT NUMBER 1620 BU DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated , 1985, between the REPUBLIC OF BURUNDI (the Borrower) and the INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS (A) the Borrower, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Association to assist in the financing of the Project; (B) the Borrower intends to contract from the French Republic acting through its Fonds d'Aide et de Coopfration (FAC) a grant (the FAC Grant) in an amount equivalent to 2.6 million dollars to assist in financing the Project on the terms and con- ditions set forth in an agreement to be entered into between the Borrower and FAC; and WHEREAS the Association has agreed, on the basis, inter alia, of the foregoing, to extend the Credit to the Borrower upon the terms and conditions set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The General Conditions Apilicable to Develop- ment Credit Agreements of the Association, dated January 1, 1985, (the General Conditions) constitute an integral part of this Agreement. Section 1.02. Unless the context othzerwise 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) "Ministry" means the Borrower's Ministry responsible for agriculture; (b) "Department" means the department in th? Ministry responsible for forestry; -2- (c) "Project Management Unit" means the unit described in Section 3.04 of this Agreement; (d) "Project Preparation Advance" means the project prep- aration advance granted by the Association to the Borrower pur- suant to an exchange of letters dated-April 4, 1985 and June 28, 1985 between the Borrower and the Association; and (e) "Special Account" means the account referred to in Section 2.02 (c) of this Agreement. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount in various currencies equivalent to thirteen million Special Drawing Rights (SDR 13,000,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of this Section and of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Association, 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 out of the proceeds of the Credit. (b) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and pay to itself the amount required to repay the principal amount of the Project Preparation Advance withdrawn and outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advance shall thereupon be cancelled. (c) The Borrower shall, for the purposes of the Project, open and maintain in dollars a special account in its Central Bank on terms and conditions satisfactory to the Association. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 5 to this Agreement. -3- Section 2.03. The Closing Date shall be September 30, 1991 or such later date as the Association shall establish. The Asso- ciation shall promptly notify the Borrower of such later date. Section 2.04. (a) The Borrower shall pay to the Association a commitment charge at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of the Credit not with- drawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Development Credit Agree- ment to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or shall be cancelled. (b) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without restrictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. 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. Commitment charges and service charges shall be payable semiannually on April 15 and October 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each April 15 and October 15 commencing October 15, 1995, and ending April 15, 2035. Each installment to and including the installment payable on April 15, 2005 shall be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter shall 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. -4- ARTICLE III Execution of the Project Section 3.01. (a) The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement and, to this end, shall carry out the Project through the Ministry with due diligence and efficiency and in conformity with appropriate financial, economic, administrative and technical practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) Without limitation upon the provisions of paragraph (a) of this Section, the Borrower shall carry out the Project in accordance with the Implementation Program set forth in Sched- ule 4 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Associa- tion. (c) In order to ensure the availability as and when needed of adequate funds for the carrying out of the Project, the Borrower shall: (i) make such budgetary allocations as shall be necessary for the purpose; and (ii) maintain in the name of the Project a revolving fund account into which funds for the Project, other than funds from external sources, shall be deposited quarterly in advance until completion of the Project. Section 3.02. Except as the Association shall otherwise agree, procurement of the goods, works and consultants' services required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to this Agreement. Section 3.03. The Borrower shall ensure that the Project be carried out pursuant to annual work programs and budgets satis- factory to the Borrower and to the Association, prepared 0( -5- according to the schedule and covering the matters indicated in Schedule 4 to this Agreement. Section 3.04. For the purposes of the Project, the Borrower shall continue to maintaid in the Department the Project Manage- ment Unit established under the First Forestry Project financed by the Association, such Unit to be directly responsible for the development and operation of rural nurseries and the eucalyptus and pine plantations as well as for ensuring the coordination of the research activities of the National Agricultural Research Institute with the agricultural and livestock activities of the departments of the Ministry concerned with the Project. Section 3.05. Prior to the establishment of any new nursery under Part A of the Project, the Borrower shall ensure that the Project Management Unit conduct a survey of the interested commune to determine the optimum location of the nursery and of areas appropriate for demonstration plots as well as the needs and preferences of the local populace for tree seedlings of all kinds. Section 3.06. Commercial operation of the eucalyptus planta- tions at Mageyo and Gakara shall be conducted according to a schedule, and under management arrangements, satisfactory to the Borrower and the Association; the Borrower shall furnish to the Association by June 30, 1988 its proposal for such schedule and arrangements. Section 3.07. The Borrower shall ensure that the training included in the Project, as well as the transfer of responsi- bilities from trainers to trainees be carried out pursuant to training programs which have been included in the annual work programs approved by the Association as provided in Schedule 4 to this Agreement. Section 3.08. The Borrower shall carry out the pilot research programs included in Parts A.3 and D of the Project with the assistance of consultants or organizations expert in agro- forestry, pursuant to contracts the terms and conditions of which have been approved by the Association. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records and accounts adequate to reflect in accordance -6- with sound accounting practices the operations, resources and expeditures in respect of the Project of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall: (i) have the accounts referred to in paragraph (a) of this Section, including the Special Account, audited, for each fiscal year, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association, as soon as available, but in any case not later than six months after the end of each such year, a certified copy of the report of such audit by the said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning the said accounts and the audit thereof and said records as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals are made from the Credit Account or from the Special Account on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, separate records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Closing Date, or in any event until completion of the audit for the year in which the final withdrawal is made from the Credit Account, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association's representatives to examine such records; and -7- (iv) ensure that such separate accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report thereof contains, in respect of such separate accounts, a separate opinion by the said auditors as to whether the proceeds of the Credit withdrawn in respect of such expenditures have been used for the purpose for which they were provided. Section 4.02. The Borrower shall cause the Project Manage- ment Unit to review annually the selling prices of seedlings and shall maintain such prices at levels which will cover at least one half the production costs for sales to farmers and, in the case of sales to commercial buyers, all of such costs; seedlings shall be given cost-free only to schools or other non-commercial institutions. Section 4.03. The Borrower shall, by December 31, 1988, adopt a detailed mechanism acceptable to the Association for the determination of prices for the products of the eucalyptus and pine plantations, such mechanism to be designed with the aim of recovering the plantations' costs of investment, operations and maintenance and to be based upon a stumpage rate study taking into account market conditions, alternative sources of energy, delivery costs and availability of products from other planta- tions. Section 4.04. Without any limitation upon the generality of Section 4.03 hereof, stumpage rates for pine timber shall be progressively raised so as to be fixed by December 31, 1989 at levels which are expected to cover full costs and shall be adjusted annually thereafter if necessary to maintain such levels in real terms. Section 4.05. The Borrower shall exchange views with the Association on the Borrower's proposals for the processing, marketing and pricing of the products of the pine plantations. Section 4.06. The Borrower shall: (i) from time to time, exchange views with the Association on the institutional arrange- ments for improvement of forestry sector management, training programs in such sector, the application of cost-recovery mea- sures and definitions and implementation of regulatory measures related to the Code Forestier of March 25, 1985; and (ii) annually, review with the Association any proposed investments in that sector. -8- ARTICLE V Remedies of the Association Section 5.01. (a) Pursuant to Section 6.02 (h) of the General Conditiohs, the following additional event is specified, namely, that subject to paragraph (b) of this Section: (i) the right of the Borrower to withdraw the proceeds of any grant (inclviding the FAC Grant) or loan made to the Borrow6,r for" the financing of the Project shall have \)een suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing therefor, or (ii) any such loan shall have become due and payable prior to the agreed maturity thereof. (b) The foregoing provisions of this Section shall not apply if the Borrower establishes to the satisfaction of the Association that: (i) such suspension, cancellation, termination or prematuring is not caused by the failure of the Borrower to perform any of its obligations under such agreement; and (ii) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consistent with the obligations of the Borrower under this Agreement. Section 5.02. Pursuant to Section 7.01 (d) of the General Conditions, the following additional event is specified, namely, that the event specified in paragraph (a)(ii) of Section 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the Borrower has deposited an amount of at least 10 million Burundi francs in the revolving fund account described in Section 3.01 (c) (ii) of this Agreement, as the first quarterly deposit; -9- (b) the following consultants and experts have been hired for the Project: (i) a silviculturist to act as Director of the Project; (ii) one silviculturist to manage the eucalyptus plantations; (iii) one silviculturist to manage the pine plantations; and (iv) one specialist in rural forestry to supervise the carrying out of Part A of the Project; and (c) all conditions precedent to the first utilization of the FAC Grant (save for the effectiveness hereof) have been fulfilled. Section 6.02. The date 90 days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.03. The obligations of the Borrower under Article IV of this Agreement and the provisions of Section 5.02 of this Agreement shall cease on the date on which the Development Credit Agreement shall terminate or on the date fifteen years after the date of this Agreement, whichever shall be the earlier. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister of the Borrower responsible for finance 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: Ministare des Finances Bolte Postale 1830 Bujumbura, Burundi - 10 - Cable address: Telex: MINFIN BDI 5065 Bujumbura For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have caused this Agreement to be signed in their respective names in the District of Columbia, Unite.c States-of; Amirica, as of the day and year first above written. REPUBLIC OF BURUNDI By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President stern and Southern Africa - 11 - 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 the amounts of the Credit to each Category and the percentage of expeiditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Civil works; 810,000 90% plantation development (2) Vehicles, equip- 3,630,000- 100% of foreign ment, materials expenditures, 95% of local expendi- tures for ex- factory price and 85% of local ex- penditures for other goods pur- chased locally (3) Consultants' 810,000 100% of foreign and experts' ser- expenditures vices: surveys, training, audits, monitoring and evaluation (4) Labor for plantations (a) establish- 3,430,000 100% ment of new plantations -12- Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (b) maintenance 500,000 100% until an of new planta- amount of tions SDR 200,000 has been disbursed, 60% thereafter and until a total of SDR 350,000 has bden dis- bursed, and 30% thereafter (5) Operating costs of 1,310,000 40% Project Manage- ment Unit (6) Refunding of 500,000 Amount due pur- Project Prep- suant to Sec- aration tion 2.02 (b) of Advance this Agreement (7) Unallocated 2,010,000 TOTAL 13,000,000 2. To the extent the amount allocated to Category 6 above exceeds the amount due, the excess will be reallocated to Cate- gory 7. 3. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of 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. - 13 - 4. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of: (a) payments made for expenditures prior to the date of this Agreement; (b) Category (1) or (4) (a) until the three forest-agrono- mists for Parts A, B and C of the Projct shall have been appointed; or (d) under Category (3) unless the training specialist shall have been appointed. - 14 - SCEDULE 2 Description of the Project The objectives of the Project are to develop basic forestry services and promote tree plantings, to establish plantations for the supply of fuelwood and construction materials, to speed the pace of reforestation and to strengthen the capacity of the Department in the fields of training and investments management. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Association may agree upon from time to time to achieve such objectives: Part A: Nurseries and agroforestry 1. The development of about 60 existing nurseries and the establishment and development of about 30 new nurseries, each to produce from 40 to 50 thousand seedlings per year; 2. the organization and training of a forestry extension ser- vice; 3. the carrying out of a pilot agroforestry scheme; and 4. the establishment of about 2,000 ha of demonstration plots to produce fuelwood, construction materials, fodder and fruit trees. Part B: New plantations 1. The establishment of about 3,500 ha of plantations for the production of eucalyptus fuelwood and building poles, mainly to supply charcoal to Bujumbura, at Gakara, Bukinanyana and Mabanda; and 2. the establishment of about 1,500 ha of pine timber commercial plantations at Vyanda and Vugizo. Part C: Maintenance and development of existing plantations The protection, maintenance and silvicultural treatment of about 2,000 ha of existing eucalyptus, and about 4,000 ha of existing pine, plantations. 15 - Part D: Pilot agro-silvopastoral program Carrying out a program, including research, to promote Integrated agro-silvopastoral activities in selected plantation areas with high-density populations. Part E: Institutional development The organization and staffing of a planning and monitoring unit in the Department and the creation of two new regional forest inspectorates, at Bujumbura and Bururi, and construction of physical facilities for such inspectorates and for the com- pletion of the headquarters of the Department; pirocurement and use of vehicles, equipment and materials for the Project. Part F: Training and Studies Carrying out a program of training of personnel in forestry, agroforestry and extension, both locally and at the university level outside Burundi; and conducting studies and trials, principally in agroforestry, charcoal making, forest exploitation and wood utilization. The Project is expected to be completed by June 30, 1990. - 16 - SCHEDULE 3 Procurement and Consultants' Services Section I. Procurement of Goods and Works Part A. International Competitive Bidding 1. Except as provided in Part B hereof, goods and works shall be procured under contracts awarded in accordance with procedures consistent with those set forth in Sections I and II of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1985 (the Guidelines). 2. To the extent practicable, vehicles, equipment, materials and supplies shall be grouped in large bid packages suitable to foster competitive bidding. Part B. Other Procurement Procedures 1. Vehicles, equipment, materials and supplies, estimated after grouping in bidding lots to cost less than the equivalent of $80,000 per contract, may be procured under contracts awarded on the basis of evaluation and comparison of quotations invited from at leakt three suppliers eligible under the Guidelines, in accordance with paragraph 3.4 of the Guidelines. 2. Civil works may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with the procedures set forth in paragraph 3.3 of the Guidelines. Part C. Review by the Association of Procurement Decisions 1. With respect to each contract estimated to cost the equiv- alent of $100,000 or more, the procedures set forth in para- graphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract required to be furnished to the Association pursuant to said paragraph 2 (d) shall be furnished to the Association prior to the making of the first payment out of the Special Account in respect of such contract. 2. With respect to each contract not governed by the preceding paragraph, the procedures set forth in paragraphs 3 and 4 of - 17 - Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, such proce- dures shall be modified to ensure that the two conformed copies of the contract together with the other information required to be furnished to the Association pursuant to said paragraph 3 shall be furnished to the Association as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 5 (the Special Account Schedule) to this Agreement. 3. The provisions of the preceding subparagraphs (a) and (b) shall not apply to contracts on account of which the Association has authorized withdrawals from the Credit Account on the basis of statements of expenditure. Such contracts shall be retained in accordance with Section 4.01 (c) (ii) of this Agreement. 4. The figure of 15% is hereby specified for purposes of para- graph 4 of Appendix 1 to the Guidelines. Section II. Employment of Consultants In order to assist the Borrower in managing the plantations and the nurseries benefiting from the Project, in managing the carrying out of the Project and in conducting the training included therein, the Borrower shall employ forestry consultants and other experts whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Associa- tion. Such consultants shall be selected in accordance with prin- ciples and procedures satisfactory to the Association on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. - 18 - SCHEDULE 4 Implementation Program Project Organization and Administration 1. The Borrower shall carry out the administrative coordination of the implementation of the Project through the Project Manage- ment Unit. The Project Management Unit shall be directly respon- sible for the development and operation of rural nurseries and the eucalyptus and pine plantations (Parts A, B and C of the Project). It shall also have specific responsibility for ensuring effective coordination of all forest and agroforestry applied research activities with the National Agricultural Research Institute (ISABU), and the agriculture and livestock activities (Part D), with the relevant services in the Department. Each plantation and each support activity shall be managed as a sepa- rate unit. Each unit shall prepare its individual work plan, budget and progress report in accordance with the outline pre- sented in paragraph 2 of this Schedule, and these shall then be aggregated by the Project Management Unit. Overall monitoring and evaluation of work shall be the responsibility of the Director General of Agriculture who shall delegate responsibility to the Director of Forestry for day-to-day operation. Annual Work Programs and Budgets 2. The annual work programs and budgets shall detail the objectives and targets of the Project for the year in question, the specific activities to be carried out and the human and financial resources, including consultant and training needs, for carrying out the proposed work program. Annual work programs shall include the following: (a) a brief evaluation of the previous year's performance as compared to objectives and a discussion of how results obtained are related to the new program; (b) detailed investment and operating budgets; (c) a description of the program of activities, including quantified implementation objectives, output, performance, and project impact indicators, where appropriate; (d) staffing and training plans, with a statement of specific objectives; (e) a financing plan; and (f) a procurement plan. Annual work programs approved by the Director General of Agriculture shall be submitted to the Association for approval by September 30 in each year. Specific approval by the Director General of ISABU shall be required for the agroforestry research component prior to approval by the Director General of Agriculture. - 19 - Training 3. Training activities supported under the Project shall be concentrated in the following areas: (i) specified training of agronomy graduates in forestry abroad; (ii) short-term training of foresters and extension workers in agroforestry and of livestock special- ists; (iii) on-site training of agronomists, livestock specialists, and agroforesters and charcoal makers by consultants; (iv) on-site training of foresters at all levels by the Project Management Unit. Studies 4. The General Directorate of Agricultural Planning in the Ministry shall have overall responsibility for the formulation of terms of reference for the various studies to be carried out under the Project. These terms of reference and related-cost estimates shall be submitted for approval by the Association. - 20 - SCHEDULE 5 Special Account 1. For the purposes of this Schedule: (a) the term "Category" means a category of items to be financed out of the proceeds of the Credit as set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (b) the term "eligible expenditures" means expenditures in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit allocated from time to time to Categories 1 through 5 in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount equivalent to 300,000 dollars which is to be withdrawn from the Credit Account and deposited in the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Unless the Association shall otherwise agree, payments out of the Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Association has received evidence satisfactory to the Association that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent with- drawals to replenish the Special Account may be made as follows: (a) On the basis of a request or requests by the Borrower for a deposit or deposits which add up to the aggregate amount of the Authorized Allocation, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit in the Special Account such amount or amounts as the Borrower shall have requested. (b) The Borrower shall furnish to the Association requests for replenishment of the Special Account at such intervals as the Association shall specify. On the basis of such requests, the Association shall withdraw from the Credit Account and deposit into the Special Account such amounts as shall be required to replenish the Special Account with amounts not exceeding the amount of payments made out of the Special Account for eligible - 21 - expenditures. Each such deposit shall be withdrawn by the Asso- ciation from the Credit Account under the respective Categories (1) through (5), and in the respective equivalent amounts, as shall have been justified by the evidence supporting the requ6st for such deposit furnished pursuant to paragraph 4 of this Schedule. 4. For each payment made by the Borrower out of the Special Account for which the Borrower requests replenishment pursuant to paragraph 3 (b) of this Schedule, the Borrower shall furnish to the Association, prior to or at the time of such request, such documents and other evidence as the Association shall reasonably request, showing that such payment was made for eligible expen- ditures. 5. (a) Notwithstanding the provisions of paragraph 3 of this Schedule, no further deposit into the Special Account shall be made by the Associatirn when either of the following situations first arises: (i) the Association shall have determined that all further withdrawals should be made directly by the Borrower from the Credit Account in accordance with the provisions of paragraph (a) of Section 2.02 of this Agreement; or (ii) when the total unwithdrawn amount of the Credit, minus the amount of any outstanding qualified agreement to reimburse made by the Association and of any outstanding special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions with respect to the Project, shall be equal to the equivalent of twice the amount of the Authorized Allocation. (b) Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to Cate- gories (1) through (5) shall follo* such procedures as the Association shall specify by notice to tme Borrower. Such further withdrawals shall be made only after and to the extent that the Association shall have been satisfied that all such amounts remaining on deposit in the Special Account as of the date of such notice will be utilized in making payments for eligible expenditures. - 22 - 6. (a) If the Association shall have determined at any time that any payment out of the Special Account (i) was made for any expenditure or in any amount not eligible pursuant to paragraph 2 of this Schedule, or (ii) was not justified by the evidence furnished pursuant to paragraph 4 of this Schedule, the Borrower shall, promptly upon notice from the Association, deposit into the Special Account (or, if the Association shall so request, refund to the Association) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. No further deposit by the Association into the Special Account shall be made until the Borrower has made such deposit or refund. (b) If the Association shall have determined at any time that any amount outstanding in the Special Account will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon ,iotice from the Association, refund to the Association such outstanding amount for crediting to the Credit Account. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the day o, 198 S R Y FOR SECRETARY