Conformed Copy - TF025069 - Mindanao Rural Development Project - Japanese Grant Agreement

Page 1 March 4, 1998 Hon. Salvador, Enriquez Secretary Department of Finance Manila The Republic of the Philppines Re: Japanese Grant for Preparation of the Mindanao Rural Development Project (Recipient-executed Portion) Grant Number TF 025069 Dear Sir: I am writing on behalf of the International Bank for Reconstruction and Development (the Bank) to indicate the Bank's agreement, as administrator of grant funds provided by Japan, to make a grant in an amount not exceeding two hundred fifty thousand dollars ($250,000)(the Grant) the Republic of the Philippines (the Recipient). The Grant is made in response to the Recipient's request for financial assistance and for the purposes and on the terms and conditions set forth in the Annex to this Letter Agreement. The Recipient represents, by confirming its agreement below, that it is authorized to contract and withdraw the Grant for the said purposes and on the said terms and conditions. Other technical assistance related to the activities funded by this Grant but carried out by the Bank (the Related Activities) is financed under a separate Grant. Please confirm your agreement with the foregoing, on behalf of the Recipient, by signing, dating. and returning to us the enclosed copy of this Letter Agreement. Upon receipt by the Bank of the copy of this Letter Agreement countersigned by you, this Letter Agreement will become effective as of the date of the countersignature. Very truly yours, INTERNATIONAL BANK FOR RE NSTRUCTION AND DEVELOPMENT By /s/ Vinay K. Bhargava Country Director, Philippines East Asia and Pacific Region AGREED: REPUBLIC OF THE PHILIPPINES By /s/ Title Acting Secretary of Finance Date: March 26, 1998 Page 2 ANNEX Purposes, Terms, and Conditions of the Grant 1. Purposes and Activities . 1.1. The purposes of the Grant are to assist the Recipient in the preparation of a proposed Mindanao Rural Development Project (the Project) whose objective is to support the peace initiative by increasing agricultural production and improving the standard of living of the people in Mindanao through building capacity of Local Government Units (LGU), supporting the construction of basic infrastructure, and providing employment and income earning opportunities within the poorer provinces of Mindanao. The activities (the Activities) for which the Grant is given are as follows: (a) Assessment of the needs and outlining of the scope of the Project, preparation of the development plans and implementation arrangements, and formulation of relevant sub-projects: (b) Organization of consultative and technical workshops aimed at achieving adequate participation of key stakeholders during the preparation and the implementation of the Project; (c) Provision of support and on-the- job training to LGU in preparing and implementing development plans; and (d) Establishment and operation of the Mindanao Rural Development Project Management Office (PMO). 2. Implementation Generally 2.1. The. Recipient shall: (a) carry out the Activities with due diligence and efficiency; (b) promptly provide the funds, facilities, services and other resources required for that purpose; (c) furnish all information covering the Activities and the use of the proceeds of the Grant as the Bank shall reasonably request; (d) from time to time exchange views with the Bank's representatives on the progress and results of the Activities; and (e) take all necessary measures required to enable the Bank to visit the territory of the Recipient for purposes related to the Grant. Without limitation on the foregoing, the Recipient shall, if the Bank shall so request, prepare and furnish to the Bank promptly upon completion of the Activities a report, in form and substance satisfactory to the Bank, on the results and impact of the Activities. 3. Procurement 3.1. Except as the Bank shall otherwise agree, procurement of the consultants' services and goods required for the carrying out of the Activities and to be financed out of the proceeds of the Grant shall be governed by the provisions of Attachment I to this Annex. 3.2. The Recipient shall ensure that all imported goods to be financed out of the proceeds of the Grant shall be insured against hazards incident to the acquisition, transportation and delivery Page 3 thereof to the place of use or installation, and that any indemnity for such insurance is payable in a freely usable currency to replace or repair such goods. The Recipient shall ensure that any facilities relevant to the Activities are at all times operated and maintained in accordance with appropriate practices and that any repairs or renewals of such facilities are promptly made as needed. 4. Withdrawal of Grant Proceeds 4.1. The amount of the Grant shall be credited to an account opened by the Bank on its books in the name of the Recipient (the Grant Account), and may be withdrawn therefrom by the Recipient in accordance with the provisions of this Section 4, for expenditures in respect of the reasonable cost of goods and services required for the Activities and to be financed out of the proceeds of the Grant. 4.2. The expenditures for the following items may be financed out of the proceeds of the Grant and shall be used exclusively in the carrying out of the Activities Amount of the Grant Allocated % of ( expressed in United States Expenditures Item Dollars ) be Financed (1) Consultants