Conformed Copy - C2243 - Livestock Sector Project - NORADA Grant Agreement

Page 1 NORAD GRANT RELATED TO CREDIT NUMBER 2243 MAG NORAD Grant Agreement (Livestock Sector Project) between DEMOCRATIC REPUBLIC OF MADAGASCAR and INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of development aid funds provided by the Norwegian Agency for Development Cooperation Dated August 21, 1992 NORAD GRANT RELATED TO CREDIT NUMBER 2243 MAG NORAD GRANT AGREEMENT AGREEMENT, dated August 21, 1992, between DEMOCRATIC REPUBLIC OF MADAGASCAR (Madagascar) and INTERNATIONAL DEVELOPMENT ASSOCIATION acting as Administrator (the Administrator) of the Grant (as hereinafter defined) provided by the Norwegian Agency for Development Cooperation (NORAD). WHEREAS Madagascar has requested the assistance of the International Development Association (the Association) and NORAD in the financing of its Livestock Sector Project (the Project) described in Schedule 2 to the Development Credit Agreement (Credit No. 2243 MAG), dated June 12, 1991, between the Democratic Republic of Madagascar and the Association; WHEREAS the Association has extended a Credit for the Project on the terms and conditions set forth in the above mentioned Development Credit Agreement, and NORAD has authorized the Administrator to extend to Madagascar for the same purpose a grant out of NORAD's development aid funds (the Grant) to assist Madagascar on the terms and conditions hereinafter set forth; WHEREAS by a cooperation agreement, dated August 20, 1992, 1992, between NORAD and the Association (the Cooperation Agreement), NORAD has requested the Association, and the Association has accepted, to Page 2 administer the Grant in accordance with the provisions of this Cooperation Agreement; WHEREAS Madagascar acknowledges that the financial assistance extended to Madagascar under this Agreement shall be considered as part of the bilateral development aid extended by NORAD to Madagascar; and WHEREAS the Administrator has agreed, on the basis, inter alia, of the foregoing, to extend the Grant to Madagascar in support of the Project, 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 Applicable to Development Credit Agreements of the Association, dated January 1, 1985, with the modifications set forth below (the General Conditions) constitute an integral part of this Agreement: (a) the term "Association", whenever used in the General Conditions, means the International Development Association acting as Administrator of the Grant pursuant to the Administration Agreement, except in the provisions "member(s) of the Association" occurring in Sections 2.01 (5), 4.02 (b) and 6.02 (e); (b) the term "Borrower", whenever used in the General Conditions, means Madagascar; (c) the term "Development Credit Agreement", whenever used in the General Conditions, means this Agreement; (d) the term "Credit", whenever used in the General Conditions, means the Grant extended to Madagascar under this Agreement; (e) the term "Credit Account", whenever used in the General Conditions, means the Trust Account opened by the Administrator in its books in the name of Madagascar to which the amount of the Grant is credited; (f) in Section 6.02, the term "Association" shall also include the International Development Association acting in its own capacity; (g) in Section 9.06 (c), the term "Closing Date" means the closing date set forth in Section 2.03 of the Development Credit Agreement; and (h) Sections 3.02, 3.03, 3.04, 3.05, 4.01, 4.02, 4.03, 4.04, 4.06, 6.05, 7.01, 8.01 (a), 12.02 and 12.05 are deleted. Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions, in the Preamble to this Agreement and in the Development Credit Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Development Credit Agreement" means the agreement, dated June 12, 1991, between the Democratic Republic of Madagascar and the Association for the Project, as such agreement may be amended from time to Page 3 time; and such term includes the "General Conditions Applicable to Development Credit Agreements" of the Association, dated January 1, 1985, as applied to such agreement, and all schedules and agreements supplemental to the Development Credit Agreement; (b) "Norwegian Kroner" and "NOK" mean the currency of NORAD; and (c) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement. Section 1.03. In all Articles, Sections and Schedules of the Development Credit Agreement explicitly incorporated into this Agreement, the references to the "Borrower", the "Association", the "Credit", the "Credit Account" and the "Special Account" shall be deemed to be references to Madagascar, the Administrator, the Grant, the Trust Account and the Special Account referred to in Section 2.02 (b) of this Agreement. ARTICLE II The Grant Section 2.01. The Administrator agrees to extend to Madagascar, on the terms and conditions herein set forth or referred to, a grant in an amount of fourteen million five hundred thousand Norwegian Kroner (NOK 14,500,000), or such other amount as shall have been made available by NORAD to the Administrator for this purpose pursuant to the Cooperation Agreement. Section 2.02. (a) The amount of the Grant may be withdrawn from the Trust Account in accordance with the provisions of Schedule 1 to this Agreement for expenditures made (or if the Administrator shall so agree, to be made) in respect of the reasonable cost of the goods and services required for Parts A.6, C.4, C.5 and C.7 of the Project. (b) The Borrower shall, for the purposes of Parts A.6, C.4, C.5 and C.7 of the Project, open and maintain in Norwegian Kroner a special account in a commercial bank in the name of the Project 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 2 to this Agreement. Section 2.03. The Closing Date shall be December 31, 1997 or such later date as the Administrator shall establish. The Administrator shall promptly notify Madagascar of such later date. ARTICLE III Execution of the Project; Other Covenants Section 3.01. Article III and Article IV and Section 5.01 of the Development Credit Agreement, paragraph 2 (c) of Schedule 1 and Schedules 2, 3 and 4 thereto are hereby incorporated into this Agreement with the same force and effect as if they were fully set forth herein. ARTICLE IV Effectiveness; Termination; Transfer of Rights and Obligations Section 4.01. The following event is specified as an additional condition to the effectiveness of this Page 4 Agreement within the meaning of Section 12.01 (b) of the General Conditions, namely, that the Development Credit Agreement has entered into effect. Section 4.02. The date set forth in Section 6.02 of the Development Credit Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 4.03. This Agreement and all obligations of the parties thereunder shall terminate on the date, following the final disbursement under this Agreement, on which Madagascar shall have fulfilled all its obligations under this Agreement. Section 4.04. In accordance with the Cooperation Agreement, the rights and obligations of the Administrator under this Agreement may be transferred to NORAD. Madagascar accepts and agrees that, upon notice by the Administrator to Madagascar to that effect, NORAD shall, ipso facto, from the date specified in such notice, be substituted in all rights and obligations of the Administrator under this Agreement as if NORAD has been an original party to this Agreement, without any further action or formality required on the part of any party, and from such date the Administrator shall cease to have any rights or obligations as a party under this Agreement. ARTICLE V Representative of Madagascar; Addresses Section 5.01. The Minister of Madagascar responsible for Finance is designated as representative of Madagascar for the purpose of Section 11.03 of the General Conditions. Section 5.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For Madagascar: Ministere des Finances Antananarivo Madagascar Cable address: Telex: MINFIN 224889 Antananarivo For the Administrator: 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) or 82987 (FTCC) IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. Page 5 DEMOCRATIC REPUBLIC OF MADAGASCAR By /s/ P. Rajaonarivelo Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of development aid funds provided by the Norwegian Agency for Development Cooperation By /s/ F. J. Aguirre-Sacasa Acting Regional Vice President Africa SCHEDULE 1 Withdrawal of the Proceeds of the Grant 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Grant, the allocation of the amounts of the Grant to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Grant Allocated % of (Expressed in Expenditures Category NOK Equivalent) to be Financed (1) Vehicles, equipment 1,600,000 80% and other goods (2) Training and fellow- 900,000 80% ships (3) Consultants' services 3,500,000 80% (4) Incremental operating 7,100,000 80% costs (5) Unallocated 1,400,000 __________ TOTAL 14,500,000 ========== 2. For the purposes of this Schedule, the term "incremental operating costs" means expenditures related to the operation and maintenance of vehicles, office supplies, veterinary supplies, operation of demonstration plots, temporary labor, maintenance of buildings and local travel. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawal shall be made in respect of payments made for expenditures prior to the date of this Agreement. SCHEDULE 2 Special Account 1. For the purposes of this Schedule: Page 6 (a) the term "eligible Categories" means Categories (1) through (4) 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 Parts A.6, C.4, C.5 and C.7 of the Project and to be financed out of the proceeds of the Grant 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 equivalent to two million Norwegian Kroner (NOK 2,000,000) to be withdrawn from the Trust Account and deposited into the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Payments out of the Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Administrator has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Special Account shall be made as follows: (a) For withdrawals of the Authorized Allocation, Madagascar shall furnish to the Administrator a request or requests for a deposit or deposits which do not exceed the aggregate amount of the Authorized Allocation. On the basis of such request or requests, the Administrator shall, on behalf of Madagascar, withdraw from the Trust Account and deposit into the Special Account such amount or amounts as the Madagascar shall have requested. (b) (i) For replenishment of the Special Account, Madagascar shall furnish to the Administrator requests for deposits into the Special Account at such intervals as the Administrator shall specify. (ii) Prior to or at the time of each such request, Madagascar shall furnish to the Administrator the documents and other evidence required pursuant to paragraph 4 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Administrator shall, on behalf of Madagascar, withdraw from the Trust Account and deposit into the Special Account such amount as Madagascar shall have requested and as shall have been shown by said documents and other evidence to have been made out of the Special Account for eligible expenditures. All such deposits shall be withdrawn by the Administrator from the Trust Account under the respective eligible Categories, and in the respective equivalent amounts, as shall have been justified by said documents and other evidence. 4. For each payment made by Madagascar out of the Special Account, Madagascar shall, at such time as the Page 7 Administrator shall reasonably request, furnish to the Administrator such documents and other evidence showing that such payment was made exclusively for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Schedule, the Administrator shall not be required to make further deposits into the Special Account: (a) if, at any time, the Administrator shall have determined that all further withdrawals should be made by Madagascar directly from the Trust Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or (b) once the total unwithdrawn amount of the Grant allocated to the eligible Categories, less the amount of any outstanding special commitment entered into by the Administrator pursuant to Section 5.02 of the General Conditions with respect to the Project, shall equal the equivalent of twice the amount of the Authorized Alloca- tion. Thereafter, withdrawal from the Trust Account of the remaining unwithdrawn amount of the Grant allocated to the eligible Categories shall follow such procedures as the Administrator shall specify by notice to Madagascar. Such further withdrawals shall be made only after and to the extent that the Administrator 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. 6. (a) If the Administrator shall have determined at any time that any payment out of the Special Account: (i) was made for an expenditure or in an amount not eligible pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence furnished to the Administrator, Madagascar shall, promptly upon notice from the Administrator: (A) provide such additional evidence as the Administrator may request; or (B) deposit into the Special Account (or, if the Administrator shall so request, refund to the Administrator) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. Unless the Administrator shall otherwise agree, no further deposit by the Administrator into the Special Account shall be made until Madagascar has provided such evidence or made such deposit or refund, as the case may be. (b) If the Administrator 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, Madagascar shall, promptly upon notice from the Administrator, refund to the Administrator such outstanding amount. (c) Madagascar may, upon notice to the Administrator, refund to the Administrator all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Administrator made pursuant to paragraph 6 (a), (b) and (c) of this Schedule shall be credited to the Trust Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions. Page 8