Conformed Copy - L7152 - TF026432 - Second Agrarian Reform Communities Development Project - Japanese Grant Agreement

Page 1 December 13, 2000 Honorable Jose T. Pardo Secretary Department of Finance Manila, Philippines Re: Japanese Grant for Preparation of the Second Agrarian Reform Communities Development Project (Recipient-executed portion) Grant TF026432 Dear Secy. Pardo 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 six hundred sixty nine thousand three hundred United States Dollars ($669,300) (the Grant) to 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. 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/ Lloyd McKay Acting Country Director, Philippines East Asia and Pacific Region AGREED: REPUBLIC OF THE PHILIPPINES By /s/ JOEL A. BANARES Undersecretary Date: December 18, 2000 ANNEX Purposes, Terms, and Conditions of the Grant 1. Purposes and Activities . 1. 1. The purpose of the Grant is to assist in the preparation of the Second Agrarian Reform Communities Development Project, which has as main objective the reduction of poverty through improved land reform and national coverage of the Agrarian Reform Communities Development Project (the Project). The activities (the Activities) for which the Grant is given are -as follows: (a) Planning and Preparation of the Community 'Management Agricultural Reform Program-Land Reform and Business Plans: provision of matching grants to (i) pilot municipalities in order to develop municipal development (land reform) plans and (ii) Agrarian Reform Communities (ARCs) to develop land acquisition and farm-based business Page 2 plans, which is estimated to cost US$398,744 equivalent; (b) Community Development: carrying out of social assessments and development of performance indicators, modules for community planning and development, training programs for potential beneficiaries and methodologies for community and non-governmental organization consultations for the community development component of the Project, which is estimated to cost US$64,730 equivalent; (c) Rural Infrastructure: identification of a menu of infrastructure and eligibility criteria for proposed sub-projects under the rural infrastructure component of the Project and institutional arrangements for implementation and maintenance and preparation of sample feasibility studies and engineering plans for proposed subprojects, which is estimated to cost US$88,849 equivalent; (d) Agricultural and Enterprise Development: preparation of training manuals and identification of training facilities and service providers for the delivery of technical advisory services in farm business planning and implementation, dissemination of appropriate agricultural and processing technologies and providing working and investment capital for agricultural and rural businesses and carrying out a review of rural credit with a view to recommending improved access and quality of credit delivery services, which is estimated to cost US$30,948 equivalent; (e) National Level Technical Support Services--Project Management Plans and Systems: provision of advisory services for overall .coordination of preparation of the Project and preparation of (i) a project implementation plan including assessment of financial and economic viability of the Project, (ii) the operational manual, (iii) project management systems, including systems for financial management, procurement, planning, budgeting and monitoring and evaluation, and (iv) guidelines and plans, if necessary, for environment, resettlement and indigenous peoples in accordance with the requirements of the Bank's safeguard policies, all of which is estimated to cost US$86,029 equivalent. 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 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. 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 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 (in United States Expenditures Item Dollars) be Financed (1) Consultants