Credit Agreement C3960-MG - Conformed

Page 1 GRANT NUMBER H116 MAG CREDIT NUMBER 3960 MAG Development Financing Agreement (Poverty Reduction Support Financing) between REPUBLIC OF MADAGASCAR and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 2004 Page 2 GRANT NUMBER H116 MAG CREDIT NUMBER 3960 MAG DEVELOPMENT FINANCING AGREEMENT AGREEMENT, dated , 2004 between REPUBLIC OF MADAGASCAR (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS (A) the Borrower has issued a Poverty Reduction Strategy Paper, dated July 2003 (PRSP), describing a program of actions, objectives and policies designed to promote rapid and sustainable development to reduce poverty by half in ten years; (B) pursuant to the PRSP, the Borrower has issued a letter dated June 22, 2004 (the Policy Letter), describing a program of actions, objectives and policies consistent with, and designed to give effect to, the PRSP (hereinafter called the Program), declaring the Borrower's commitment to the execution of the Program, and requesting assistance from the Association in support of the Program during the execution thereof; (C) the Borrower has carried out the measures and taken the actions described in Schedule 2 to this Agreement to the satisfaction of the Association and has maintained a macroeconomic policy framework satisfactory to the Association; (D) on the basis, inter alia , of the foregoing, the Association has decided in support of the Program to provide such assistance to the Borrower by making the Credit and the Grant as hereinafter provided; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The