Conformed Copy - L3283 - Port Sector Project - Kingdom - Loan Agreement 1

Page 1 CONFORMED COPY LOAN NUMBER 3283 MOR (Port Sector Project - Kingdom) between KINGDOM OF MOROCCO and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated May 9, 1991 LOAN NUMBER 3283 MOR LOAN AGREEMENT AGREEMENT, dated May 9, 1991, between the KINGDOM OF MOROCCO (the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank). 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 Bank to assist in the financing of the Project; and (B) by an agreement (the ODEP Port Sector Loan Agreement) of even date herewith between the Bank and Office d'Exploitation des Ports (ODEP), the Bank has agreed to make a loan to ODEP to assist in the financing of a project (the Port Sector Project - ODEP) to improve the operational efficiency of the ports operated by ODEP and to improve the institutional capabilities and operations of ODEP, on the terms and conditions set forth in the ODEP Port Sector Loan Agreement; and WHEREAS the Bank has agreed, on the basis, inter alia, of the foregoing, to extend the Loan to the Borrower upon the terms and Page 2 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 Loan and Guarantee Agreements" of the Bank, dated January 1, 1985, 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: (a) "Port Sub-sector Development Program" means the Borrower's medium-term program for the development of the port sub- sector to be carried out in accordance with the provisions of Section 4.02 of this Agreement; (b) "Category" means a category of items to be financed out of the proceeds of the Loan, as set forth in the table in para- graph 1 of Schedule 1 to this Agreement; (c) "Fiscal Year" means the twelve (12) month period corresponding to any of the Borrower's fiscal years, which period coincides with the calendar year commencing January 1 and ending December 31; (d) "Port Investment Program" means the Borrower's annual investment program for the construction, development and rehabili- tation (including dredging) of the infrastructure and related facilities of its ports, to be implemented in accordance with the provisions of Section 3.03 of this Agreement; (e) "Sub-project" means any sub-project included under Part A of the Project, and to be partially financed out of the proceeds of the Loan; and (f) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement. ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Loan Agreement, various currencies that shall have an aggregate value equivalent to the amount of thirty-three million dollars ($33,000,000) being the sum of withdrawals of the proceeds of the Loan, with each withdrawal valued by the Bank as of the date of such withdrawal. Section 2.02. (a) The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement for expenditures made (or, if the Bank 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 Loan. (b) The Borrower shall, for the purposes of the Project, open and maintain a special account in a currency and a financial institution, both acceptable to the Bank, on terms and conditions satisfactory to the Bank. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 5 to this Agreement. Section 2.03. The Closing Date shall be June 30, 1996 or such later date as the Bank shall establish. The Bank shall promptly Page 3 notify the Borrower of such later date. Section 2.04. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one percent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.05. (a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time, at a rate for each Interest Period equal to the Cost of Qualified Borrowings determined in respect of the preceding Semester, plus one-half of one percent (1/2 of 1%). On each of the dates specified in Section 2.06 of this Agreement, the Borrower shall pay interest accrued on the principal amount outstanding during the preceding Interest Period, calculated at the rate applicable during such Interest Period. (b) As soon as practicable after the end of each Semester, the Bank shall notify the Borrower of the Cost of Qualified Borrowings determined in respect of such Semester. (c) For the purposes of this Section: (i) "Interest Period" means a six-month period ending on the date immediately preceding each date specified in Section 2.06 of this Agreement, beginning with the Interest Period in which this Agreement is signed. (ii) "Cost of Qualified Borrowings" means the cost, as reasonably determined by the Bank and expressed as a percentage per annum, of the outstanding borrowings of the Bank drawn down after June 30, 1982, excluding such borrowings or portions thereof as the Bank has allocated to fund: (A) the Bank's investments; and (B) loans which may be made by the Bank after July 1, 1989 bearing interest rates determined otherwise than as provided in paragraph (a) of this Section. (iii) "Semester" means the first six months or the second six months of a calendar year. (d) On such date as the Bank may specify by no less than six months' notice to the Borrower, paragraphs (a), (b) and (c) (iii) of this Section shall be amended to read as follows: "(a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time, at a rate for each Quarter equal to the Cost of Quali- fied Borrowings determined in respect of the preceding Quarter, plus one-half of one percent (1/2 of 1%). On each of the dates specified in Section 2.06 of this Agreement, the Borrower shall pay interest accrued on the principal amount outstanding during the preceding Interest Period, calculated at the rates applicable during such Interest Period." "(b) As soon as practicable after the end of each Quarter, the Bank shall notify the Borrower of the Cost of Qualified Borrowings determined in respect of such Quarter." "(c) (iii) `Quarter' means a three-month period commencing on January 1, April 1, July 1 or October 1 in a calendar year." Section 2.06. Interest and other charges shall be payable semiannually on March 15 and September 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. Page 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 with due diligence and efficiency and in conformity with appropriate administrative, financial, commercial, engineering and environmental 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, and except as the Borrower and the Bank shall otherwise agree, the Borrower shall: (i) carry out the environmental studies, included in Part C.1 (b) of the Project, in respect of dredging activities in the Ports of Agadir, Kenitra, Larache and Safi and furnish to the Bank said studies, including the Borrower's recommendations based thereon, not later than December 31, 1991; and (ii) ensure that the dredging activities included in Part A.3 of the Project in respect of said Ports shall be carried out in accordance with such recommendations, based on said studies, as shall have been agreed between the Borrower and the Bank. Section 3.02. For purposes of carrying out Part A.1 of the Project, the Borrower shall: (a) identify and appraise each Sub- project, based on a methodology and procedures acceptable to the Bank; and (b) thereafter, furnish such Sub-project to the Bank for its review and approval. Section 3.03. The Borrower shall: (a) prepare and furnish to the Bank, for its review and comment, not later than September 30 in each Fiscal Year during which the Project is carried out, starting Fiscal Year ending December 31, 1991, the Borrower's proposed Port Investment Program for the following Fiscal Year, together with a proposed plan for the financing of said investment program; and (b) thereafter, finalize said Port Investment Program, taking into consideration the Bank's comments thereon and take all measures necessary to ensure its prompt implementation. Section 3.04. Except as the Bank 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 Loan shall be governed by the provisions of Schedule 4 to this Agreement. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained 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 records and accounts referred to in paragraph (a) of this Section, and those for the Special Account, for each Fiscal Year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six (6) months after the end of each such year, the report of such audit by said auditors, of such scope and in such Page 5 detail as the Bank shall have reasonably request- ed; and (iii) furnish to the Bank such other information con- cerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan 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, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the Fiscal Year in which the last withdrawal from the Loan Ac- count was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank's representatives to examine such records; and (iv) ensure that such records and accounts are includ- ed in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said audi- tors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. Section 4.02. The Borrower shall carry out the Port Sub-sector Development Program with due diligence and efficiency and in conformity with sound administrative, financial, economic, and engineering practices and shall provide, promptly as needed, the funds, facilities, services and other resources required therefor. ARTICLE V Effective Date; Termination Section 5.01. The following event is specified as an addi- tional condition to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions, namely, that all conditions precedent to the effectiveness of the ODEP Port Sector Loan Agreement, except for the effectiveness of this Agreement, have been fulfilled. Section 5.02. The date ninety (90) days after date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Minister of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministcre des Finances Rabat Page 6 Kingdom of Morocco Cable address: Telex: MINISTERE FINANCES 36715, Rabat, Morocco 36936 or 36147 For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 197688 (TRT), Washington, D.C. 248423 (RCA), 64145 (WUI) or 82987 (FTCC) 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, United States of America, as of the day and year first above written. KINGDOM OF MOROCCO By /s/ Mohammed Belkhayat Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Kemal Dervis Acting Regional Vice President Europe, Middle East and North Africa SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expendi- tures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Works under: (a) Parts A.1 (a), 16,300,000 ) A.1 (b) and ) A.3 of the ) Project ) 64% ) (b) Part A.1 (c) 2,100,000 ) of the Project ) Page 7 (2) Goods under: ) 100% of foreign ) expenditures, (a) Parts B and 600,000 ) 100% of local C.2 of the ) expenditures Project ) (ex-factory ) cost) and 70% (b) Part A.1 (c) 4,500,000 ) of local ex- of the Project ) penditures for ) other items pro- ) cured locally Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (3) Consultants' 2,300,000 100% services and training (4) Unallocated 7,200,000 _________ TOTAL 33,000,000 ========== 2. 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. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expendi- tures prior to the date of this Agreement. SCHEDULE 2 Description of the Project The objectives of the Project are to: (i) improve the opera- tional efficiency of the Borrower's ports, so as to assist the Borrower in adapting its operations to the growth and changing structure of foreign trade; (ii) assist the Borrower in strengthen- ing the economic viability of its investments in the port sub-sector generally, and increasing the recovery of related infrastructure costs; and (iii) promote policies and institutional measures for improving the planning and coordination of the Borrower's port operations in relation to its promotion of foreign trade. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Bank may agree upon from time to time to achieve such objectives: Part A: 1. Carrying out of selected priority Sub-projects under the Borrower's Port Investment Program, including, inter alia: (a) re- habilitation and upgrading of the breakwater at the Borrower's Port of Casablanca; (b) rehabilitation and upgrading of the breakwater at the Borrower's Ports of Tangiers and Agadir; and (c) installation of a control tower, and provision of related equipment, and carrying out of civil works, all as required for marine security at the Borrower's ports; Page 8 2. Carrying out of other selected activities under the Borrower's Port Investment Program, including, inter alia: (a) rehabilitation and upgrading of the breakwater at the Borrower's Ports of Safi, El Jadida and Essaouira; (b) a program to maintain the Borrower's Ports of Casablanca and Mohammedia; and 3. Carrying out of a rehabilitation and maintenance dredging program at the Borrower's main ports. Part B: Acquisition and utilization of equipment and materials required for port security and environmental protection. Part C: 1. Carrying out of: (a) a study to update the Borrower's national port master plan; and (b) studies to determine the extent and impact of the contamination of sediments to be dredged from the Borrower's ports, to identify measures for eliminating the sources of such contamination and to develop dredging and disposal procedures to ensure that the dredging activities in the Borrower's ports are carried out in an environmentally sound manner; and 2. Carrying out of a training program, including in-service training, fellowships, seminars and provision of training aids. * * * * The Project is expected to be completed by June 30, 1995. SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* September 15, 1996 600,000 March 15, 1997 625,000 September 15, 1997 650,000 March 15, 1998 675,000 September 15, 1998 700,000 March 15, 1999 730,000 September 15, 1999 755,000 March 15, 2000 785,000 September 15, 2000 815,000 March 15, 2001 845,000 September 15, 2001 880,000 March 15, 2002 915,000 September 15, 2002 950,000 March 15, 2003 985,000 September 15, 2003 1,025,000 March 15, 2004 1,065,000 September 15, 2004 1,105,000 March 15, 2005 1,145,000 September 15, 2005 1,190,000 March 15, 2006 1,235,000 September 15, 2006 1,285,000 March 15, 2007 1,335,000 September 15, 2007 1,385,000 March 15, 2008 1,440,000 September 15, 2008 1,495,000 March 15, 2009 1,550,000 September 15, 2009 1,610,000 March 15, 2010 1,675,000 September 15, 2010 1,740,000 March 15, 2011 1,810,000 _____________________________ Page 9 * The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal. See General Conditions, Sections 3.04 and 4.03. Premiums on Prepayment Pursuant to Section 3.04 (b) of the General Conditions, the premium payable on the principal amount of any maturity of the Loan to be prepaid shall be the percentage specified for the applicable time of prepayment below: Time of Prepayment Premium The interest rate (expressed as a percentage per annum) appli- cable to the Loan on the day of prepayment multiplied by: Not more than three years 0.15 before maturity More than three years but 0.30 not more than six years before maturity More than six years but 0.55 not more than eleven years before maturity More than eleven years but not 0.80 more than sixteen years before maturity More than sixteen years but not 0.90 more than eighteen years before maturity More than eighteen years before 1.00 maturity SCHEDULE 4 Procurement and Consultants' Services Section I. Procurement of Goods and Works Part A: International Competitive Bidding Except as provided in Part C 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). Part B: Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A hereof, goods manufactured in the Kingdom of Morocco 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 1. Limited international bidding: Goods estimated to cost less than the equivalent of one million dollars ($1,000,000) per contract, but more than the equivalent of one hundred thousand dollars ($100,000) per contract, up to an aggregate amount not to exceed the equivalent of two million dollars ($2,000,000), may be procured under contracts awarded through limited international bidding procedures on the Page 10 basis of evaluation and comparison of bids invited from a list of at least five qualified suppliers eligible under the Guidelines and in accordance with the procedures set forth in Sections I and II of the Guidelines (excluding paragraphs 2.8, 2.9, 2.55 and 2.56 thereof). 2. Local competitive bidding: Civil works estimated to cost less than the equivalent of two million dollars ($2,000,000) per contract, up to an aggregate amount not to exceed the equivalent of ten million dollars ($10,000,000), may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfac- tory to the Bank. 3. Shopping: Goods estimated to cost less than the equivalent of one hundred thousand dollars ($100,000) per contract, up to an aggregate amount not to exceed the equivalent of one million dollars ($1,000,000), may be procured under contracts awarded on the basis of comparison of price quotations solicited from a list of at least three (3) suppliers from at least two (2) different countries eligible under the Guidelines, in accordance with procedures acceptable to the Bank. Part D: Review by the Bank of Procurement Decision 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to the first contract for civil works or goods irrespective of the estimated value thereof, awarded under the procedures referred to in Parts A and C hereof, and with respect to each contract for civil works estimated to cost the equivalent of one million dollars ($1,000,000) or more, and each contract for goods estimated to cost six hundred thousand dollars ($600,000) 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 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 Bank pursuant to said paragraph 2 (d) shall be furnished to the Bank 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 preceding 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, said 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 Bank pursuant to said paragraph 3 shall be furnished to the Bank as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 5 to this Agreement. (c) The provisions of the preceding subparagraph (b) shall not apply to contracts on account of which the Bank has authorized withdrawals on the basis of statements of expenditure. 2. The figure of 20% is hereby specified for purposes of paragraph 4 of Appendix 1 to the Guidelines. Section II. Employment of Consultants In order to assist the Borrower in carrying out the Project, the Borrower shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfac- tory to the Bank. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Bank 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. Page 11 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 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 Loan 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 $2,000,000 to be withdrawn from the Loan 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 Bank 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, the Borrower shall furnish to the Bank 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 Bank shall, on behalf of the Borrower, withdraw from the Loan Account and deposit in the Special Account such amount or amounts as the Borrower shall have requested. (b) (i) For replenishment of the Special Account, the Borrower shall furnish to the Bank requests for deposits into the Special Account at such inter- vals as the Bank shall specify. (ii) Prior to or at the time of each such request, the Borrower shall furnish to the Bank the documents and other evidence required pursuant to para- graph 4 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and deposit into the Spe- cial Account such amount as the Borrower shall have requested and as shall have been shown by said documents and other evidence to have been paid out of the Special Account for eligible expenditures. All such deposits shall be with- drawn by the Bank from the Loan Account under the respective eligible Categories, and in the re- spective equivalent amounts, as shall have been justified by said documents and other evidence. 4. For each payment made by the Borrower out of the Special Account, the Borrower shall, at such time as the Bank shall reasonably request, furnish to the Bank 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 Bank shall not be required to make further deposits into the Special Account: (a) if, at any time, the Bank shall have determined that all Page 12 further withdrawals should be made by the Borrower directly from the Loan 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 Loan allocated to the eligible Categories, less the amount of any outstanding special commitment entered into by the Bank 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 Allocation. Thereafter, withdrawal from the Loan Account of the remaining unwithdrawn amount of the Loan allocated to the eligible Categories shall follow such procedures as the Bank shall specify by notice to the Borrower. Such further withdrawals shall be made only after and to the extent that the Bank 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 Bank 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 Bank, the Borrower shall, promptly upon notice from the Bank: (A) provide such additional evidence as the Bank may request; or (B) deposit into the Special Account (or, if the Bank shall so request, refund to the Bank) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. Unless the Bank shall otherwise agree, no further deposit by the Bank into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Bank 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 Bank, refund to the Bank such outstanding amount. (c) The Borrower may, upon notice to the Bank, refund to the Bank all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Bank made pursuant to paragraphs 6 (a), (b) and (c) of this Schedule shall be credited to the Loan Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions.