Conformed Copy - C2077 - Financial Sector Adjustment Credit - Contribution Agreement

Page 1 Contribution Agreement between HER MAJESTY THE QUEEN IN RIGHT OF CANADA and INTERNATIONAL DEVELOPMENT ASSOCIATION for the MUTUALIST BANKING PROJECT (SENEGAL) Dated June 5, 1990 CONTRIBUTION AGREEMENT The Contribution Agreement made in duplicate on this June 5, 1990, between HER MAJESTY THE QUEEN IN RIGHT OF CANADA (hereinafter referred to as "Her Majesty") herein represented by the Secretary of State for External Affairs, acting through the Canadian International Development Agency (hereinafter referred to as "CIDA") and the International Development Association (hereinafter referred to as the "Association"). WHEREAS CIDA has informed the Association that it desires to provide grant funds, to be administered by the Association, to finance technical assistance to support mutualist banking operations in Senegal as described further in Annex A hereto (hereinafter called the "Project"); AND WHEREAS the purpose of the Contribution Agreement (hereinafter called "Agreement") between the Association and CIDA is to set out the terms and conditions concerning the administration of such contribution and the implementation of the Project; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Section 1.01. CIDA hereby appoints the Association as Administrator of a contribution of funds in an amount of one million two hundred seventy-three thousand Canadian dollars (CDN $1,273,000) (hereinafter referred to as "the Contribution") for the purpose of the Project in the following manner: (a) Upon the entry into force of this Agreement, CIDA shall deposit an amount of two hundred thousand Canadian Dollars (CDN $200,000) in an account maintained with the Bank of Canada in the name of the Association (hereinafter referred to as the T-Account). The grant funds will be administered by the Association in accordance with the terms of this letter. The grant funds Page 2 will be kept separate and apart from the funds of the Association. (b) Subsequent advances of up to two hundred thousand Canadian Dollars (CDN $200,000) will be made by CIDA on a quarterly basis conditional upon receipt of a cash forecast statement estimating funds required for the following three months period and receipt of the statement of account for the preceding quarter in accordance with Section 3.01 (a) of this Agreement. (c) No more than two advances will remain outstanding at any one time and at no time will the total amount of the advances available in the T-Account exceed four hundred thousand Canadian Dollars (CDN $400,000). (d) The grant funds may be commingled with other trust funds assets maintained in the T-Account. These funds may be freely exchanged by the Association into other currencies as may facilitate their disbursement. (e) The Association may invest and reinvest the grant funds in the T-Account pending their disbursement. The income therefrom shall be added to the Account and thereafter be available for the same purpose as said funds. Section 1.02. It is understood between CIDA and the Association that a portion of the Contribution in an amount equivalent to two per cent (2%) of the amount of the Contribution will be utilized to defray the expenses of the Association in administering the Project. CIDA hereby authorizes the Bank to transfer to itself, as and when needed, appropriate amounts to reimburse the Association for such expenses. Section 1.03. If unforeseen. increases in expenditures or commitments are expected or realized (whether due to inflationary factors, fluctuation in exchange rates or unforeseen contingencies), the Association shall notify CIDA, in writing, of this fact, and of the estimated amount of the increases in expenditures or commitments, as soon as possible. CIDA will consider whether it will agree to increase its contribution to the Project to cover such increases in expenditures or commitments. Section 1.04. Whenever the events described in Section 1.03 of this Agreement occur, and an additional contribution is not forthcoming, CIDA and the Association may agree to reduce the scope of, the Project or suspend or terminate this Agreement. ARTICLE II Section 2.01. The Contribution shall be administered by the Association for the purpose of meeting the costs of the Project as set out in Annex A. Section 2.02. The Association shall disburse from the T-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 for the purposes of the Project. The recruitment of consultants and disbursements shall be effected in accordance with the Association's applicable procedures; provided, however, that the consultants recruited pursuant to this Agreement shall be either Canadian citizens or landed immigrants in Canada. Section 2.03. The Association, as Administrator on behalf of CIDA, shall have the sole responsibility for the supervision of the Project and shall keep CIDA Page 3 regularly informed of the progress of the Project. Section 2.04. The Association shall exercise the same care in the discharge of its functions under this Agreement as it exercises with respect to the administration and management of its own affairs and shall have no further responsibility to CIDA in respect thereof. Section 2.05. The Association shall enter into such arrangements with the Republic of Senegal as are necessary to ensure the successful implementation of the Project. Section 2.06. The Association shall enter into arrangements defining a procedure to administer the Contribution, including the opening of a special account in Dakar. Section 2.07. The Association and CIDA shall consult, regularly at the request of each other, on all matters arising out of this Agreement. ARTICLE III Section 3.01. The Association shall maintain separate records and ledger accounts in respect of the funds in the T-Account and those disbursed by the Association pursuant to the provisions of this Agreement, and the Association shall furnish on a quarterly basis to CIDA a statement of account on such records and accounts. Section 3.02. The Association shall cause the accounts and records referred to in Section 3.01 to be audited and certified by the Association's external auditors for each fiscal year that funds shall remain in the Account and shall furnish the report of such audit by said auditors to CIDA. The Association may deduct the cost of the audit from the amount of the Contribution in the T-Account. ARTICLE IV Section 4.01. 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 to Republic of Senegal have been made from the Account. Section 4.02. If at any time it appears to either party that the purposes of this Agreement can no longer effectively or appropriately be carried out, this Agreement may be terminated at the initiative of such party ninety days (90 days) after giving notice in writing to that effect. Section 4.03. If at any time it appears that funds of the Contribution were not used appropriately for the purpose of the Project, CIDA may withhold further payments and cancel an equivalent amount from the Contribution. Section 4.04. Notwithstanding the termination of this Agreement, the Association shall continue to hold unutilized funds of the Contribution until the earlier of: (i) the satisfaction of all commitments incurred for the Project prior to the date of termination of this Agreement, or (ii) the filing of the report required under Section 4.05 of this Agreement. Section 4.05. Promptly after termination of this Agreement, the Association shall furnish to CIDA a final Page 4 report and a financial statement on the Account, together with an opinion of the Association's external auditors on such statement. Section 4.06. All unutilized funds of the Contribution shall be returned by the Association, through CIDA, to the Receiver General of Canada. ARTICLE V Section 5.01. This Agreement may be amended only by written agreement of the parties hereto. Section 5.02. 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 to the party giving such notice or making such request. The addresses so specified are: For CIDA: Canadian Embassy-Cooperation Section 67 Bd. de la Republique B.P. 3373 Dakar Senegal Telex: 51632 DOMCAN SG For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 197688 (TRT), Washington, D.C. 248423 (RCA), 64145 (WUI) 82987 (FTCC) ARTICLE VI Section 6.01. This Agreement together with Annex A, which forms an integral part hereof, constitute the entire Agreement between CIDA and the Association with respect to the Project. ARTICLE VII Section 7.01. No member of the Canadian House of Commons shall be admitted to any share or part of this Agreement or to any benefit to arise therefrom. Section 7.02. Any payment to be made by CIDA under this Agreement is subject to there being an appropriation by Parliament for the fiscal year in which the payment is to be made. IN WITNESS WHEREOF, the undersigned, being duly authorized thereto, have signed the present Agreement in duplicate. Page 5 For HER MAJESTY THE QUEEN IN RIGHT OF CANADA By /s/ Roger Conture Canadian International Development Agency Name Roger Conture Title Directeur Cooperation et Charge d'Affaires Date 5/07/90 For the INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ David R. Steeds Name David R. Steeds Title Acting Director, AF5 Date 6/5/90 ANNEX A Description of the Project 1. General The Project provides technical assistance to the Government of Senegal to promote and support mutualist banking operations in Senegal. 2. Project Elements The Contribution for the Project will be used to finance the fees and expenses of 48 person-months. 3. Budget Estimates (CDN $) Fees 602,000 Expenses 615,000 Supervision 26,000 Contingency 30,000 1,273,000 * * * * The project is expected to be completed by December 31, 1991.