Armenia - Highway Project : Credit 2776 - Credit Agreement - 1 - Conformed

mi짼以 / & 딧 님 · 기 · & 떼 … & . &. & ■’ ■·」，&...&..,,.. . ·」：. &／눕： ·―.1 「― .-．·「。．.,．··． .&―신 !,-.&..．·．.&:.& -X..&‘· 」．(,-,&....!,&.,...&&r·‘.”。겹ㅑ，,(l,.｀…’··．. ’『， 「■．』’&. /,．눕［- ·…ㅑ．·，\1&1.\,―쩐 &./(-’··－떼’-.1&--&.．· -l떼」1.,&-,4．·―.，·―.J.―「―. CRE, DIT NUMBER 2776 AM Development Credit Agreement (Highway Project) between REPUBLIC OF ARMIENIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated &r.- 1995 Credit Number 2776 AM DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated OCTOV M , 1995, between REPUBLIC OF ARMENIA (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). 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 Kuwait Fund for Arab Economic Development a loan (the Kuwait Fund Loan) in an amount equivalent to $15,000,000 to assist in financing the Project on the terms and conditions set forth in an agreement (the Kuwait Fund Loan Agreement) to be enered into between the Borrower and the Kuwait Fund; (C) the Borrower intends to contract from the European Union (the EU) a grant (the EU Grant) in an amount equivalent to $1,000,000 to assist in financing the Project on the terms and conditions set forth in an agreement (the EU Grant Agreement) to be entered into between the Borrower and the EU; (D) the Borrower intends to contract from the French Government a grant (the French Grant) in an amount equivalent to $1,000,000 to assist in financing the Project on the terms and conditions set forth in an agreement (the French Government Grant Agreement) to be entered into between the Borrower and the French Government; and WHEREAS the Association has agreed, on the basis, inir alia, of the foregoing, to extend the Credit to the Borrower 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 modifications thereto set forth below (the General Conditions) constitute an integral part of this Agreement. 2 (a) The last sentence of Section 3.02 is deleted. (b) The second sentence of Section 5.01 is modified to read: "Except as the Bank and the Borrower shall otherwise agree, no withdrawals shall be made: (a) on account of expenditures in the territories of any country which is not a member of the Bank or for goods produced in, or services supplied from, such territories; or (b) for the purpose of any payment to persons or entities, or for any import of goods, if such payment or import, to the knowledge of the'Bank, is prohibited by a decision of the United Nations Security Council taken under Chapter VII of the Charter of the United Nations." 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) "ARD" means Armenian Road Directorate, a public agency operating under the authority of the Borrower's Ministry of Transport and Communications; (b) "PIU" means Froject Implementation Unit established within ARD; (c) "Project Preparation Advance" means the project preparation advance granted by the Association to the Borrower pursuant to an exchange of letters dated March 23, 1995 and April 5, 1995 between the Borrower and the Association. (d) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement. ARTICLE H The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount,in various currencies equivalent to ten million three hundred thousand Special Drawing Rights (SDR 10,300,000). Section 2.02. (a) The amount of the Credit may be withdravm from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement for expenditures made (or, if the Association shall so agree, to be made) in respect of the 3 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 may, for the purposes of the Project, open and maintain in US dollars a special deposit account in a commercial bank on terms and conditions satisfactory to the Association, including appropriate protection against set-off, seizure or attachment. 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 canceled. Section 2.03. The Closing Date shall be December 31, 1999 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.04. (a) The Borrower shall pay to the Association a commitment charge on the principal amount of the Credit not withdrawn from time to time at a rate to be set by the Association as of June 30 of each year, but not to exceed the rate of one- half of one percent (1/2 of 1%) per annum. (b) The commitment charge shall accrue: (i) from the date sixty days after the date of this Agreement (the accrual date) to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or canceled; and (ii) at the rate set as of the June 30 immediately preceding the accrual date or at such other rates as may be set from time to time thereafter pursuant to paragraph (a) above. The rate set as of June 30 in each year shall be applied from the next payment date in that year specified in Section 2.06 of this Agreement. (c) 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 General 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 o n the principal amount of the Credit withdrawn and outstanding from time to time. 4 Section 2.06. Commitment charges and service charges shall be payable semi- annually on March 1 and September 1 in each year. Section 2.07. (a) Subject to paragraphs (b) and (c) below, the Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each March I and September 1 commencing March 1, 2006 and ending September 1, 2030. Each installment to and including the installment payable on September 1, 2015 shall be one and one-fourth per cent (1-1/4%) of such principal amount, and each installment thereafter shall be two and one-half percent (2-1/2%) of such principal amount. (b) Whenever: (i) the Borrower's gross national product per capita, as determined by the Association, shall have exceeded $790 in constant 1985 dollars for five consecutive years, and (ii) the Bank shall consider the Borrower creditworthy for Bank lending, the Association may, subsequent to the review and approval thereof by the Executive Directors of the Association and after due consideration by them of the development of the Borrower's economy, modify the terms of repayment of installments under paragraph (a) above by requiring the Borrower to repay twice the amount of each such installment not yet due until the principal amount of the Credit shall have been repaid. If so requested by the Borrower, the Association may revise such modification to include, in lieu of some or all of the increase in the amounts of such installments, the payment of interest at an annual rate agreed with the Association on the principal amount of the Credit withdrawn and outstanding from time to time, provided that, in the judgment of the Association, such revision shall not change the grant element obtained under the above-mentioned repayment modification. (c) If, at any time after a modification of terms pursuant to paragraph (b) above, the Association determines that the Borrower's economic condition has deteriorated significantly, the Association may, if so requested by the Borrower, further modify the terms of repayment to conform to the schedule of installments as provided in paragraph (a) above. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 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 Agreement, and, to this end, shall carry out the Project through the ARD with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and environmental practices, and shall 5 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 Association shall otherwise agree, the Borrower shall carry out the Project in accordance with the Implementation Program set forth in Schedule 4 to this Agreement. 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. For the purposes of Section 9.08 of the General Conditions, and without limitation thereto, the Borrower shall: (a) prepare, on the basis of guidelines acceptable to the Association, and furnish to the Association not later than six (6) months after the Closing Date or such later date as may be agreed for this purpose between the Borrower and the Association, a plan for the future operation of the Project; and (b) afford the Association a reasonable opportunity to exchange views with the Borrower on said plan. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained 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 including those for 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 6 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 said records, accounts and the audit thereof as the Association shall from time to time reasonably request. (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, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account or payment out of the Special 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 records and accounts are included 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 auditors 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. (a) The Borrower shall provide to ARD, promptly as needed, the budgetary resources for road maintenance not covered by the project activities, at an increasing level not less than the rate of increase in the Borrower's overall revenues. (b) Not later than November 15 of each year until completion of the Project, the Borrower shall submit to the Association an annual financing plan for the next fiscal year which shall include, inter alia: (i) budget allocations for ARD to finance its share of project activities; and (ii) budget allocations for ARD to finance road maintenance not covered by the Project activities, as referred to in paragraph (a) of this Section. 7 ARTICLE V Remedies of the Association Section 5.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional events are specified: (a) that the Kuwait Fund Loan Agreement, the EU Grant Agreement and the French Government Grant Agreement (Cofinanciers' Agreements) shall have failed to become effective by June 30, 1996 or such later date as the Association may agree; provided, however, that the provisions of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Association that 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. (b) (i) Subject to subparagraph (ii) of this Section: (A) the right of the Borrower to withdraw the proceeds of the Kuwait Fund Loan, EU Grant, French Grant or any other loan or grant made to the Borrower for the financing of the Project shall have been suspended, canceled or terminated in whole or in part, pursuant to the terms thereof, or (B) the Kuwait Fund Loan shall have become due and payable prior to the agreed maturity thereof. (ii) Paragraph (i) of this Section shall not apply if the Borrower establishes to the satisfaction of the Bank that: (A) 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 (B) 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 events are specified, namely, that the event specified in paragraph (b) (i) (B) of Section 5.01 of this Agreement shall occur. 8 ARTICLE VI Effective Date; Termination Section 6.01. The following event is specified as an additional condition of effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions, namely, that the Borrower shall have adopted a revised schedule of road user charges acceptable to the Association. 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 Genxeral Conditions. ARTICLE VI Representatives of the Borrower; Addresses Section 7.01. 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 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministry of Finance 1, Government House Republic Square Yerevan 375010 Republic of Armenia Telex: 243331 LADA SU For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America 9 Cable address: Telex: INDEVAS 248423 (RCA) Washington, D.C. 82987 (FTCC) 64145 (WUI) or 197688 (TRT) 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. REPUBLIC OF ARMENIA ByXhf AWIV Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By A/ ~~L ,.44~3e Ai'A Regional Vice President Europe and Central Asia 10 SCHEDULE 1 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 % of Allocated Expenditures (Expressed in to be Category SDR Equivalent) Financed (1) Civil works 5,100,000 85% (2) Equipment, 3,000,000 100% of foreign materials and expenditures, supplies 100% of local expenditures (ex-factory cost) and 85% of local expenditures for other items procured locally (3) Technical Assistance and training (a) for Part E 130,000 100% of the Project (b) for Parts A and C 510,000 100% of the Project (4) Operating costs 260,000 100% of the PIU 11 Amount of the Credit % of Allocated Expenditures (Expressed in to be Category SDR Equivalent) Financed (5) Refunding of 200,000 Amounts due Project pursuant to Preparation Section 2.02 (c) Advance of this Agreement Unallocated 1,100,000 TOTAL 10.300,000 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; (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; and (c) the term "operating costs" means incremental operating costs, including staff salaries (other than salaries of government officials), office rent, furnishings, utilities, maintenance, and communications. 3. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not to exceed SDR 640,000 equivalent may be made in respect of Categories (1), (2), (3) and (4) on account of payments made for expenditures before that date but after March 15, 1995. 4. The Association may require withdrawals from the Credit Account to be made on the basis of statements of expenditure for expenditures: (i) for goods and works under contracts not exceeding $300,000 equivalent; (ii) for services provided by consulting firms under contracts not exceeding $100,000 equivalent; (iii) for services provided by individual consultants under contracts not exceeding $50,000 equivalent; and (iv) for operating costs under contracts not exceeding $20,000 equivalent, under such terms and conditions as the Association shall specify by notice to the Borrower. 12 SCHEDULE 2 Description of the Project The objectives of the Project are to assist in preserving the Borrower's road network and in improving the efficiency of the Borrower's road maintenance operations. 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: Periodic Highway Maintenance Surface dressing, overlays, and reconstruction of roads selected in accordance with the criteria specified in paragraph 2 of Schedule 4 to this Agreement; and engineering design and supervision services required for these works. Part B: Materials for Routine Maintenance Provision of imported materials, such as bitumen, vehicle fuel and spare parts, for the routine maintenance of the national road network. Part C: Bridges and Tunnels (1) the repair of priority bridges and tunnels; and (2) provision of equipment and engineering services needed for the establishment and commencement of operation of a bridge inspection system. Part D: Equipment and Spare Parts Provision of equipment needed to permit the introduction of new technology and improved quality of road maintenance, and spare parts needed to keep existing equipment functioning. Part E: Institutional Strengthening and Technical Upgrading (1) Provision of consultants' services to assist ARD to restructure its organization and operational procedures in a manner consistent with the Borrower's privatization objectives; to introduce cost benefit techniques; to improve quality control, to improve planning, road research and technology transfer capabilities; to develop and start implementing a road safety plan; to install a system of axle weight control, and, generally to improve the efficiency of operations for road maintenance. 13 (2) Training for ARD and the private road construction industry in contracting procedures, business administration and project management. Part F: Strenothening of the PIU's Implementation Capacity Provision of financial support to the PIU in carrying out the Project activities. The Project is expected to be completed by June 30, 1999. 14 SCHEDULE 3 Procurement and Consultants' Services Section 1. Procurement of Goods and Works Part A: General Goods and works shall be procured in accordance with the provisions of Section I of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in January 1995 (the Guidelines) and the following provisions of this Section as applicable. Part B: International Competitive Bidding 1. Except as otherwise provided in Part C of this Section, goods and works shall be procured under contracts awarded in accordance with the provisions of Section II of the Guidelines anj paragraph 5 of Appendix I thereto. 2. The following provisions shall apply to goods and works to be procured under contracts awarded in accordance with the provisions of paragraph I of this Part B. (a) Prequalification Bidders for works shall be prequalified in accordance with the provisions of paragraphs 2.9 and 2.10 of the Guidelines. (b) Preference for domestically manufactured goods and domestic contractors The provisions of paragraphs 2.54 and 2.55 of the Guidelines and Appendix 2 thereto shall apply to goods manufactured in the territory of the Borrower and works to be carried by domestic contractors. Part C: Other Procurement Procedures 1. National Competitive Bidding Works estimated to cost $500,000 equivalent or less per contract and $8,900,000 equivalent in the aggregate, may be procured under contracts awarded in accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines. 15 2. International Shopping Goods estimated to cost the equivalent of $300,000 or less per contract, and $900,000 equivalent in aggregate, may be procured under contracts awarded on the basis of international shopping procedures in accordance with the provisions of paragraphs 3.5 and 3.6 of the Guidelines. 3. Direct Contracting Goods, which are of proprietary nature and costing $200,000 equivalent in the aggregate, may, with the Association's prior agreement, be procured in accordance with the provisions of paragraph 3.7 of the Guidelines. Part D: Review by the Association of Procurement Decisions 1. Procurement Planning Prior to the issuance of any invitations to prequalify for bidding or to bid for contracts, the proposed procurement plan for the Project s.all be furnished to the Association for its review and approval, in accordance with the provisions of paragraph 1 of Appendix 1 to the Guidelines. Procurement of all goods shall be undertaken in accordance with such procurement plan as shall have been approved by the Association, and with the provisions of said paragraph 1. 2. Prior Review With respect to (i) all contracts for goods and works estimated to cost $300,000 equivalent or more, (ii) the first two contracts awarded in accordance with the provisions of Part C. 1, and (iii) all contracts awarded in accordance with the provisions of Part C.3, the procedures set forth in paragraphs 2 and 3 of Appendix 1 to the Guidelines shall apply. 3. Post Review With respect to each contract not governed by paragraph 2 of this Part, the procedures set forth in paragraph 4 of Appendix I to the Guidelines shall apply. Section II. Employment of Consultants 1. Consultant's services financed by the proceeds of the Credit shall be procured under contracts awarded in accordance with the provisions 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 (the Consultant Guidelines). For complex, time- 16 based assignments, the Borrower shall employ such consultants under contracts using the standard form of contract for consultants' services issued by the Bank, with such modifications thereto as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, other standard forms acceptable to the Association shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, this exception to prior Association review shall not apply to (i) the terms of reference for such contracts, (ii) single-source selection of consulting firms, (iii) assignments of a critical nature, as reasonably determined by the Association, (iv) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (v) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. 17 SCHEDULE 4 Implementation Program 1. The Borrower shall maintain the PIU referred to in Section 1.02(b) of this Agreement which, at all times, shall be staffed and shall operate in accordance with the implementation arrangements agreed between the Borrower and the Association. 2. ARD shall use cost benefit analysis, in accordance with the principles agreed between ARD and the Association, to determine the actual road segments to be repaired under the Project, as well as for all investments in the road sector during execution of the Project, and shall only undertake projects with a positive Net Present Value. For the purposes of this paragraph: "Net Present Value" means the present value of all expected cash inflows from an investment discounted at the cost of capital of twelve per cent f:12%), compared to the initial investment. 3. Prior to inviting bids for civil works, ARD shall make public the list of equipment available on a rental basis for work to be carried out by contractors under the Project, with uniform rental rates for all bidders. ARD shall ensure that the rental rates will be set at a level adequate to cover the depreciation of equipment, its maintenance, and a reasonable rate of return on the investment. 4. Before November 15 of each year during execution of the Project, ARD shall prepare annual work programs for the next calendar year and shall review these programs with the Association before implementing them. 5. The Borrower shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfac, y to the Association, the carrying out of the Project and the achievement of the obje ives thereof; and (b) review with the Association, by November 1, 1997, the progress made in the implementation of the Project; and shall take all necessary measures to execute the actions identified and agreed upon between the Association and the Borrower during such review. 6. The Borrower shall: (a) carry out a study on: (i) the required level of financing needed to maintain the Borrower's road network; and (ii) the possible financing and collection mechanisms for road maintenance; and 18 (b) review with the Association, not later than January 1, 1997, the results and recommendations of the study referred to in subparagraph (a) of this paragraph, and by July 1, 1997, put into effect the recommendations on financing and collection mechanisms agreed with the Association. 19 SCHEDULE 5 Special Account 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (1), (2), (3) and (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 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 equivalent to $1,000,000 to be withdrawn from the Credit Account and deposited in the Special Account pursuant to paragraph 3 (a) of this Schedule, provided, however, that unless the Association shall otherwise agree, the Authorized Allocation shall be limited to an amount equivalent to $500,000 until the aggregate amount of withdrawals from the Credit Account plus the total amount of all outstanding special commitments entered into by the Association pursuant to Section 5.02 of the General Conditions shall be equal to or exceed the equivalent of $3,000,000. 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 Association 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 Association 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 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) (i) For replenishment of the Special Account, the Borrower shall furnish to the Association requests for deposits into the Special Account at such intervals as the Association shall specify. (ii) Prior to or at the time of each such request, the Borrower shall furnish to the Association the documents and other evidence 20 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 Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special 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 withdrawn by the Association from the Credit 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 the Borrower out of the Special Account, the Borrower shall, at such time as the Association shall reasonably request, furnish to the Association 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 Association shall not be required to make further deposits into the Special Account: (a) if, at any time, the Association shall have determined that all further withdrawals should be made by the Borrower directly from the Credit Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; (b) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) (ii) of this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of the records and accounts for the Special Account; (c) if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to the provisions of Section 6.02 of the General Conditions; or (d) once the total unwithdrawn amount of the Credit allocated to the eligible Categories, less the amount of any outstanding special commitment entered into by the Association 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 Credit Account of the remaining unwithdrawn amount of the Credit allocated to the eligible Categories shall follow such procedures as 21 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 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 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 Association, the Borrower shall, promptly upon notice from the Association: (A) provide such additional evidence as the Association may request; or (B) 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 justified. Unless the Association shall otherwise agree, no further deposit by the Association 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 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. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to paragraphs 6 (a), (b) and (c) of this Schedule shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Development Association. FOR SECRETARY