Mali - Second Forestry Project : Credit 1654 - Credit Agreement - Conformed

OFFICIAL CREDIT NUMBER 1654 MLI DOCUMENTS Development Credit Agreement (Second Forestry Project) between REPUBLIC OF MALI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated ( e / 1986 CREDIT NUMBER 1654 MLI DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated 1L1 , 1986, between REPUBLIC OF MALI (the I rrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Associat on). 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 through the Caisse Centrale de Cooperation Economique (CCCE) a loan (the CCCE Loan) in an amount of about forty-six million French francs to assist in financing the Project on the terms and conditions set forth in an agreement (the CCCE Loan Agreement) to be entered into between the Borrower and CCCE; (C) the Borrower intends to receive from the French Repub- lic through the Fonds d'Aide et de Cooperation (FAC) a grant (the FAC Grant) consisting of, inter alia, an amount of twenty-two million French francs and the provision of experts' services to assist in financing the Project on the terms and conditions set forth in an agreement (the FAC Grant Agreememt) to be entered into between the Borrower and FAC; and WREREAS the Association has agreed, on the basis, inter alia, of the foregoing, to extend the Credit to the Borrower upon rhe 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 Applicable to Develop- ment Credit Agreements" of the Association, dated January 1, i985, with the last sentence of Section 3,02 deleted (the General Conditions) constitute an integral part of this Agreement. Section 1.02. 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: -2- (a) "Project Preparation Advance" means the project prepa- ration advance granted by the Association to the Borrower pur- suant to an exchange of letters dated June 11, 1985 and June 12, 1985 between the Borrower and the Association; (b) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement; (c) "Central Financial Management Unit" means the unit referred to in paragraph 1 (b) of Schedule 4 to this Agreement; (d) "DNEF" means the Direction Nationale des Eaux et Forets of the Borrower's Ministry of Natural Resources and Livestock; (e) "OAPF" means the Operation Amenagement et Productions Forestieres established pursuant to Decree No. 114 PG-RM, dated September 16, 1972 of the Borrower and operating under the supervision of the Ministry of Natural Resources and Livestock; (f) "OPNBB" means the Op&ration Ame-nagement du Parc National de la Boucle du Baoul& established pursuant to Decree No. 113 PG-RM, dated September 16, 1972 of the Borrower and operating under the supervision of the Ministry of Natural Resources and Livestock; (g) "DPP" means the Division des Projets et Programmes of DNEF; (h) "Rural Forestry Unit" means the Unit responsible for carrying out Part A (2) of the Project; (i) "Office du Niger" means an Etablissement Public of the Borrower established by Ordinance No. 81-3/1-RM, dated April 28, 1981 of the Borrower and operating pursuant to Decree No. 217/PG-RM, dated August 31, 1981 of the Borrower, published in the Official Journal of Mali No. 693, dated June 4, 1983; (j) "Forestry Fund" means the account referred to in Law No. 82-12 AN-RM, dated February 27, 1982 of the Borrower; (k) "fiscal year" means the period from January 1 through December 31 next following; (1) "CMDT" means the Compagnie Malienne pour le Developpe- ment des Textiles, a corporation (Societe d'Economie Mixte) -3 - organized and operating under Statuts approved by Ordinance No. 4/CMLN of the Borrower, dated January 30, 1975; and (m) "OHV" means Operation Hautes Vall6es established pur- suant to Decree No. 117 PG-RM, dated September 16, 1975, of the Borrower and operating under the supervision of the Ministry of Agriculture. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Bor- rower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount in various currencies equivalent to five million nine hundred thousand Special Drawing Rights (SDR 5,900,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance 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 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) The Borrower shall, for the purposes of the Project, open and maintain in CFA Francs a special account in a commercial 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. (c) 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. Section 2.03. The Closing Date shall be December 31, 1991 or such later date as the Association shall establish. The Associa- tion shall promptly notify the Borrower of such later date. - 4 - 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 Gener.al 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 April 15, 1996, and ending October 15, 2035. Each installment to and including the installment payable on October 1., 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 French Republic is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.09. The Chief, Central Financial Management Unit, is designated as representative of the Borrower for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. 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 -5- Agreement, and, to this end, shall carry out Part A of the Project through DNEF, Part B through 0APF and Part C through OPNBB with due diligence and efficiency and in conformity with appropriate administrative, financial and forestry practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) The Borrower shall make the proceeds of the Credit available to DNEF, OAPF and OPNBB as a grant. (c) Without limitation upon the generality of paragraph (a) above, the Borrower shall, during the execution of the Project, ensure the funding of DNEF, OAPF and OPNBB at not less than their 1985 level in real terms. 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: (a) ensure that the studies referred to under Part A (1) and the pilot schemes referred to under Part A (2)(a) of the Project shall be carried out in accordance with terms of reference and a timetable satis- factory to the Association; and (b) no later than September 30, 1988, review with the Association the results reached in the carrying out of Part A (2) of the Project and in the light of such review, take such action as the Association shall consider advisable, including the continuation, the reorientation or cancellation of activities under said Part A (2). Section 3.04. The Borrower shall ensure that mechanical repairs to equipment used to carry out any Part of the Project which are carried out by the garage of GAPF shall be charged on a cost basis. Section 3.05. For the purposes of carrying out Part C of the Project, the Borrower shall: (a) implement a regional development plan satisfactory to the Association for the Boucle du Baoule National Park; and (b) remove the hamlets and villages situated within the boundaries of the Boucle du Baoule National Park in accordance with a plan of action satisfactory to the Association. - 6 - Section 3.06. The Borrower shall: (a) by September 30, 1988 review and consult with the Association on the progress of all parts of the Project including the results of increases in stumpage rates and forestry fines, and improved collection efforts; and (b) if necessary take all measures required result- ing from said review. Section 3.07. The Borrower shall ensure that DNEF make arrangements, satisfactory to the Association, with CMDT and OHV, respectively, on the modalities of the cooperation to be provided by them for the carrying out of Part A (2) of the Project. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall cause DNEF and the Central Financial Management Unit to maintain separate records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures 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, for each fiscal year audited, 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 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. -7- (c) For all expenditures with respect to which withdrawals from the Credit Account were made 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 completion of the audit for the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association's representatives to examine such records; and (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 said auditors as to whether the pro- ceeds of the Credit withdrawn in respect of such expenditures were used for the purposes for which they were provided. Section 4.02. The Borrower shall ensure that DNEF employ a duly qualified accountant whose responsibilities shall include, inter alia, to establish and maintain the separate account for DNEF referred to in Section 4.01 (a) of this Agreement, and to prepare annual financial statements on the basis of such accounts. Section 4.03. The Borrower shall increase stumpage rates in order to improve the economic management of its forestry re- sources and in accordance with the provisions of Article 43 of Law No. 68-8 AN-RM, dated February 17, 1968 (Forestry Code). Section 4.04. The Borrower shall ensure that all revenues from the collection of stumpage fees and forestry fines continue to be deposited in the Forestry Fund. Section 4.05. The Borrower shall ensure that all revenues from OAPF's sales are credited to OAPF's accounts for its exclusive use. -8- ARTICLE V Remedies of the Association Section 5.01. (a) Pursuant to Section 6.02 (h) of the Gen- eral Conditions, the following additional events are specified, subject to paragraph (b) of this Section: (i) the right of the Borrower to with( aw the proceeds of the CCCE Loan or the FAC Grant shall have been suspended, or terminated in whole or in part, pur- suant to the terms of the CCCE Loan Agreement or the FAC Grant Agreement, and (ii) the CCCE Loan shall have become due and payable prior to the agreed maturity thereof. (b) Paragraph (a) 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, subject to the provisions of para- graph (b) of that Section. ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as addi- tional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the Association has been notified by CCCE that all conditions precedent to the first disbursement of the CCCE Loan, except for the effectiveness of this Agreement, have been fulfilled; and (b) the Association has received evidence satisfactory to it that the Borrower has increased the rates of stumpage fees by 100% over the levels specified in Law No. 81-04-AN-RM of March 3, 1981. - 9 - Section 6.02. The date ninety (90) days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. 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: Ministere des Finances et du Commerce Bamako Republic of Mali Cable address: Telex: MINIFINANCES 972559 Bamako For the Association: International DevoLupment Associatio 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) - 10 - IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have caused this Agreement to be signed in their -espective names in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF MALI By tcc Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By 7zA4rA Regional Vice President Western Africa - 11 - SCHEDULE I 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 expenditures 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) Part A of the Project (a) civil works 470,000 95% (b) vehicles and 95,000 100% equipment (c) consultants' 95,000 100% services and training (d) DNEF operat- 190,000 35% ing costs (e) Rural Forestry 190,000 30% Unit operating costs (2) Part B of the Project: (a) civil works 95,000 95% (b) vehicles and 935,000 100% equipment (c) consultants' 190,000 100% services and training - 12 - Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (d) OAPF operating 1,680,000 45% up to costs (exclud- December 31, ing civil 1987; 42% up to servants' sala- December 31, ries) 1989; and 40% thereafter (3) Part C of the Project (a) equipment 140,000 100% (b) rural roads 140,000 95% maintenance (4) Refunding of 935,000 Amount due pur- Project Prepara- suant to Section tion Advance 2.02 (c) of this Agreement (5) Unallocated 745,000 TOTAL 5,900,000 2. For the purposes of this Schedule, the term "operating costs" means expenditures in respect of items such as office sup- plies, fuel, travel and subsistence expenditures under Categories (1), (d) and (e) and (2) (d) of the table set forth in paragraph (1) of this Schedule. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) payments made for expenditures prior to the date of this Agreement; (b) in respect of Categories (1) and (3) until DNEF has employed the accountant referred to in Section 4.02 of this Agreement; and (c) in respect of Category (1) (e) until the Association has received evidence satisfactory to it that the arrangements referred to in Section 3.07 of this Agreement have been made. - 13 - SCHEDULE 2 Description of the Project The objectives of the Project are to improve the management of forestry resources and to increase the supply of wood products in Bamako. 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: DNEF (1) Improvement of forestry policy and program formulation on the basis of studies on: (a) a long-term national plan for the management of classified forest and fauna reserves and national parks; (b) the feasibility of establishment of irrigated tree plantations in uncultivated areas managed by the Office du Niger; and (c) the structure of the market and of price levels for local forest products, with recommendations for appropriate stumpage fees and fiscal policy. (2) Improvement of rural forestry management and formulation of proposals for reform of land use and tenure laws, forestry regulations and price incentives on the basis of experience with, inter alia: (a) pilot schemes of agro-silvopastoral management of the unreserved forest cover at Mafeya and Dioila aimed at involving the rural population in the management of the forest cover; and (b) assistance to individual tree/shrub/bush plantations in the rural areas of Fana, Dioila and Koulikouro through provision of plants from nurseries. (3) Improvement of tax collection on domestic wood products through, inter alia, construction and operation of six toll posts on the main access roads to Bamako. - 14 - (4) Expansion and equipping of DNEF's office facilities and supplementary training of forestry officers. Part B: Forestry Production and Management Unit (OAPF) (1) Management of the classified forest of the Bamako area through, inter alia: (a) enforcement of forestry policy; (b) elaboration and adoption of an appropriate management plan; (c) maintenance and development of the road/track firebreak network; and (d) maintenance and operation of existing tree plantations. (2) Establishment and management of semi-industrial tree plan- tations at the rate of 600 ha per year in the classified forest of La Faya and Monts Mandingue, with particular emphasis on pro- tection ._om browsing and uncontrolled bushfires. (3) Improvement of plantation stock and forestry techniques for peri-urban tree plantations. (4) Improvement in the management of natural forest in the classified forests of the Bamako area. Part C: Boucle du Baoule National Park Protection of the Boucle du Baoule National Park through, inter alia, improvement and maintenance of the road and track networks. The Project is expected to be completed by March 31, 1991. - 15 - SCHEDULE 3 Procurement and Consuiltants' Services Section I. Procurement of Goods and Works Part A. International Competitive Bidding 1. Except as provided in Part C hereof, goods 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. Except as otherwise agreed with the Association, contracts for vehicles and equipment shall be bulked into packages estimated to cost the equivalent of $100,000 or more so as to permit bulk procurement. Part B. Preference for Domestic Manufacturers In the procurement of goods in accordance with the proce- dures described in Part A (1) hereof, goods manufactured in Mali may be granted a margin of preference in accordance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraphs 1 through 4 of Appendix 2 thereto. Part C. Other Procurement Procedures Contracts for vehicles and equipment estimated to cost less than $100,000 equivalent and contracts for works may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association. Part D. Review by the Association of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract for vehicles and equipment estimated to cost the equivalent of $100,000 or more, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are - 16 - to c,e 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. (b) With respect to each contract not governed by the pre- ceding paragraph, the procedures set forth in paragraphs 3 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 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 to this Agreement. (c) The provisions of the preceding subparagraphs (a) and (b) shall not apply to contracts on account of which the Associa- tion has authorized withdrawals from the Credit Account on the basis ot statements of expenditure. Such contracts shall be retained in accordance with Section 4.01 (c) (ii) of this Agree- ment. 2. The figure of 10% is hereby specified for purposes of para- graph 4 of Appendix 1 to the Guidelines. Section II. Employment of Consultants In order to assist DNEF in carrying out part A of the Project and OAPF in carrying out Part B of the Project, the Borrower shall ensure that DNEF and OAPF employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Such consultants shall be selected in accordance with principles 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. - 17 - SCHEDULE 4 Implementation of the Project 1. Overall Management and Coordination (a) Overall technical management and coordination of the Project will be carried out by DNEF. (b) Financial management of the Project will be carried out by the administrative and financial section of OAPF which will be expanded and upgraded into a Central Financial Management Unit. The Chief of this Unit shall have delegated responsibility to engage funds on behalf of any department or agency responsible for carrying out any Part of the Project. 2. Management of Part A of the Project (a) The studies under Part A (1) of the Project will be carried out by DPP. (b) The rural forestry activities under Part A (2) of the Project will be carried out under the responsibility of DNEF's Regional Director at Koulikouro. (c) Part A (3) of the Project will be carried out under the responsibility of DNEF's Regional Director for the District of Bamako. 3. Management of Part B of the Project Day-to-day management and execution of Part B of the Project will be assured by OAPF, reinforced by consultants in the areas of finance (financial director), mechanics, works, and research. 4. Management of Part C of the Project Part C of the Project will be carried out by OPNBB under the supervision of DNEF. 5. Work Programs and Budgets DPP, the Rural Forestry Unit, OAPF and OPNBB will carry out their respective responsibilities under the Project on the basis of annual work programs and budgets approved by the Association. - 18 - For this purpose, drafts of the annual work programs and budgets will be forwarded to the Association for its review two months before the beginning of the Borrower's fiscal year so as to pro- vide a meaningful opportunity for an exchange of views and the modification, if necessary, of said draft programs and budgets. 6. Monitoring and Evaluation DPP, the Rural Forestry Unit, OAPF and OPNBB will each pro- duce and forward to the Borrower's Ministry of Natural Resources and Livestock and to the Association an annual report on the progress achieved in the implementation of their respective Parts or sub-Parts of the Project. The report referred to in Section 9.06 (c) of the General Conditions will be prepared by DNEF with the collaboration of OAPF in respect of Part B of the Project. - 19 - SCHEDULE 5 Special Account 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (1) through (3) set forth in the table in paragraph 1 of Schedule 1 to thiF 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 the eligible Categories in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount of one hundred million CFA Francs to be withdrawn from the Credit Account and deposited in the Special Account pursuant to para- graph 3 (a) of this Schedule. 2. Except as 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 it that the Special Account has been duly opened, withdrawals of the respective Authorized Allocation and subsequent withdrawals 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 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 - 20 - expenditures. All such deposits shall be withdrawn by the Association from the Credit Account under the respective eligible Categories, and in the respective equivalent amounts, as shall have oeen justified by the evidence supporting the request 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 expenditures. 5. (a) Notwithstanding the provisions of paragraph 3 of this Schedule, no further deposit into the Special Account shall be made by the Association 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) the total unwithdrawn amount of the Credit allo- cated to the respective eligible Categories, minus the amount of any outstanding special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions for 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 the respective eligible Categories shall follow such procedures as the Association shall specify by notice to the 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 have been or will be utilized in making payments for eligible expenditures. 6. (a) If the Association shall have determined at any time that any payment out of the Special Account: (i) was made for - 21 - any expenditure or in any amount not eligible pursuant to para- graph 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 justi- fied. 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 notice 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 of 198 4 -. FOR SECRETARY