Zambia - Agricultural Research And Extension Project : Credit 1746 - Credit Agreement - 1 - Conformed

CONFORMED COPY OFFICIAL NJ;V I i-14 NORWEGIAN GRANT RELATED TO CREDIT NUMBER 1746-ZA Agreement for the Administration of Certain Funds to be made available by the GOVERNMENT OF THE KINGDOM OF NORWAY in Conjunction with the Agricultural Research and Extension Project in the REPUBLIC OF ZAMBIA Dated December 15, 1987 NORWEGIAN GRANT RELATED TO CREDIT NUMBER 1746 ZA AGREEMENT AGREEMENT dated as of December 15, 1987 between the GOVERNMENT OF THE KINGDOM OF NORWAY (hereinafter referred to as the Government) and the INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter referred to as the Association) to provide for the administration by the Association of certain funds to be made available to the Republic of Zambia (hereinafter referred to as Zambia). WHEREAS (A) by the Agreement dated October 2, 1986, between the Kingdom of Norway and International Bank for Reconstruction and Development and International Development Association provides the framework for cofinancing of development projects by the parties thereto; (B) the Government wishes to make available to Zambia a grant not exceeding fifty-two million five hundred thousand Norwegian kroner (NKr 52,500,000) (hereinafter referred to as the Grant) to assist Zambia in financing part of the cost of goods and services related to the Agriculture Research and Extension Project (hereinafter referred to as the Project) which is being cofinanced by the Bank under a Credit to be extended by the Association to Zambia pursuant to a Development Credit Agreement (Agriculture Research and Extension Project), dated March 19, 1987, between Zambia and the Association (hereinafter referred to as the Development Credit Agreement); (C) the Government wishes that the proceeds of the Grant shall be incremental to the Credit extended for the same purposes by the Association to Zambia pursuant to the Development Credit Agreement; and (D) the Association has agreed to administer the Grant upon the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Section 1.01. The Association, as Administrator on behalf of the Government, shall enter into such agreement or agreements with Zambia, as it may deem appropriate but consistent with the terms and conditions of the Development Credit Agreement (excluding the debt service provisions thereof) for the purpose of assisting in the financing of the Project. Such agreements with Zambia shall, inter alia, provide that the proceeds of the Grant may be with- drawn by Zambia to finance reasonable cost of goods and services - 2 - required for the Project and otherwise eligible for -financing under the Development Credit Agreement, and that the amounts to be withdrawn need not be repaid and shall bear no interest or other charges. A copy of each agreement shall be furnished by the Association to the Government. Section 1.02. The Association, as Administrator on behalf of the Government, shall have the sole responsibility for the super- vision of the Project. Section 1.03. The administration and enforcement of any provisions of any agreement entered into between Zambia and the Association for the purposes of this Agreement shall be handled solely by the Association, and the Association specifically reserves the right, at its discretion and without notice to the Government, to exercise, refrain from exercising or waive any rights under such Agreement or to modify any provision thereof, provided, however, that before suspending the right of Zambia to make withdrawals of funds under such Agreement, the Association shall inform the Government and afford the Government a reasonable opportunity for consultation with the Association. Section 1.04. The Association shall exercise the same care in the discharge of its functions under this Agreement as it exer- cises with respect to the administration and management of its own affairs and shall have no further responsibility to the Government in respect thereof. ARTICLE II Section 2.01. (a) The Government shall, subject to Parliamentary appropriations, deposit an amount of fifty-two million five hundred thousand Norwegian kroner (NOK 52,500,000) in a trust account with the Bank of Norway in the name of the Association (hereinafter referred to as the Trust Account) for the purpose of financing vehicles equipment and civil works set forth in the Schedule to this Agreement. The funds in the Trust Account shall be freely exchangeable by the Association with other currencies as may facilitate their administration. (b) The said amount shall be deposited in four annual tranches from calendar year 1987 through 1990 as follows: (i) an amount of seven million kroner (NOK 7,000,000) in calendar year 1987; (ii) an amount of twenty-two million four hundred thousand kroner (NOK 22,400,000) in calendar year 1988; -3- (iii) an amount of sixteen million eight hundred thousand kroner (NOK 1.6,800,000) in calendar year 1989; and (iv) an amount of six million three hundred thousand kroner (NOK 6,300,000) in calendar year 1990. (c) It is understood that the amount of each such tranche is based on the planned implementation schedule for the Project and may, after consultations between the Government and the Association, be adjusted to reflect actual progress made in Project implementation. Section 2.02. The Association shall disburse from the Trust Account such amounts as from time to time shall be needed to meet the reasonable costs of goods and services financed or to be financed pursuant to Section 1.01 of this Agreement. Such disbursements shall be effected on the basis of withdrawal applications for eligible expenditures submitted by Zambia to the Association in accordance with the Association's normal procedures for withdrawal and disbursement of proceeds of credits made by the Association. Section 2.03. In order to assist in the defrayment of the costs of administration and other expenses incurred by the Asso- ciation under this Agreement, the Association may invest and reinvest the funds in the Trust Account pending their disbursement to Zambia and may retain for its own account the income from any such investment or reinvestment. ARTICLE III Section 3.01. (a) The Association shall maintain separate records and accounts in respect of the funds in the Trust Account and disbursed by the Association pursuant to the provisions of this Agreement, and promptly after the end of each fiscal year furnish to the Government a statement of account on such records and accounts. (b) The Association shall cause such accounts and records to be audited and certified by the Association's external auditors for each fiscal year that funds shall remain in the Trust Account and shall furnish the report of such audit by said auditors to the Government. 4- ARTICLE IV Section 4.01. The Government and the Association shall con- sult from time to time, at the request of each other, on all matters arising out of this Agreement. Section 4.02. The Association shall keep the Government informed of the progress of the Project. To that end, the Associa- tion shall furnish to the Government all relevant progress, performance and assessment reports relating to the Project. Section 4.03. The Association shall inform the Government of any forthcoming major missions and meetings in connection with the Project and shall afford representatives of the Government the opportunity to participate in such missions and meetings. Section 4.04. The Association shall inform the Government of any proposed significant modifications to the Development Credit Agreement and shall afford the Government a reasonable opportunity to exchange views with the Association before effecting any such modifications. ARTICLE V Section 5.01. This Agreement shall become effective as of the date first above written and, subject to the provisions of this Article, shall continue in effect until all disbursements have been made from the Trust Account to Zambia. Section 5.02. If at any time it appears to either party that the purposes of this Agreement can no longer effectively or appro- priately be carried out, this Agreement may be terminated at the initiative of such party on ninety (90) days' notice in writing. Section 5.03. Upon termination of this Agreement, unless the parties agree on another course of action, any agreement or portion thereof entered into by the Association, as Administrator on behalf of the Government, shall be transferred to the Govern- ment, and any funds or other property of the Government held here- under by the Association shall be returned to the Government, and the Association's administration shall be considered terminated. Section 5.04. Promptly after termination of this Agreement, the Association shall furnish to the Government a final report and a financial statement on the Trust Account, together with an opinion of the Association's external auditors on such statement. - 5 - ARTICLE VI Section 6.01. This Agreement may be amended only by written agreement of the parties hereto. Section 6.02. Any notice or request required or permitted to be given or made under this Agreement, and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand or by mail, telegram, cable or telex to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or at such other addresses as such party shall have designated by notice by the party giving such notice or making such request. The addresses so specified are: For the Government: The Royal Ministry of Development Cooperation P.O. Box 8142, Oslo Dep. 0033 Oslo 1 Norway Cable address: Telex: NORAD-N 74256 NORAD-N Oslo For the Bank: 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) -6- IN WITNESS, WHEREOF, the undersigned duly authorized thereto, have signed this Agreement. GOVERNMENT OF THE KINGDOM OF NORWAY By /s/ Kjell Eliassen Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Edward V. K. Jaycox Regional Vice President Africa -7- SCHEDULE Amount of Norwegian a of Grant Allocated (Expressed Expenditures Category in Norwegian kroner-N0K) to be Financed (1) Central Research 27,300,000 100% Station at Mount Makulu (2) Zonal Research 3,500,000 100% Station at Misanfu (3) Regional Research 4,900,000 100% Station at Mufulira (4) Regional Research 4,900,000 100% Station at Mongu (5) Trial Research 1,400,000 100% Site at Mbala (6) Research Activities 10,500,000 100% in the Northern Provinces TOTAL 52.52a.0Q