Malawi - Second Family Health Project : Credit 1768 - Credit Agreement - Conformed

-.DOCUMENTS CREDIT NUMBER 1768 MAI Development Credit Agreement (Second Family Health Project) between REPUBLIC OF MALAWI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1987 CREDIT NUMBER 1768 MAI DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated IkA4t. *', 1987, between REPUBLIC OF MALAWI (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS 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 financing the Project; WHEREAS the Association has agreed, on the basis, inter 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 Develop- ment Credit Agreements" of the Association, 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) "MOH" means the Borrower's Ministry of Health; (b) "MOCS" means the Borrower's Ministry of Community Services; (c) "MOWS" means the Borrower's Ministry of Works and Supplies; and (d) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement. -2 - ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Bor- rower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount in various currencies equivalent to eight million seven hundred thousand Special Drawing Rights (SDR 8,700,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account, in accordance with the provisions of Schedule 1 to this Agreement, for expenditures made (or, if the Association shall so agree, to be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 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 shall, for the purposes of the Project, open and maintain in U.S. dollars a special account in a commercial bank on terms and conditions satisfactory to the Association. 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, 1993, 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 at the rate of one-half of one percent (1/2 of 1%) per annum on the principal amount of the Credit not with- drawn from time to time. The commitment charge shall accrue from a date sixty (60) days after the date of the Development Credit Agreement to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or shall be cancelled. (b) 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 Aslsociation a service charge at the rate of three-fo-urths cf one percent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Commitment charges and service charges shall be payable semiannually on February 15 and August 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each February 15 and August 15 commencing August 15, 1997, and ending February 15, 2037. Each installment to and including the installment payable on February 15, 2007, shall be one-half of one percent (1/2 of 1%) of such principal amount, and each installment thereafter shall be one and one-half percent (1-1/2%) of such principal amount. 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 with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and public health prac- tices, and shall provide, promptly as needed, the funds, facili- ties, 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 Sched- ule 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. -4- Section 3.03. Should the Borrower propose to make any investment in the health sector which is not included in the first five years of the Borrower's National Health Plan (1986-1995), such investment shall be made by mutual agreement between the Borrower and the Association. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records and accounts adequate to reflect, in accor- dance 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 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; -5- (ii) retain, until at least one year after the completion of the audit for the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) as evidence of 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. ARTICLE V Remedies of the Association Section 5.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional event is specified, namely, that: (a) subject to paragraph (b) of this Section: (i) the right of the Borrower to withdraw the proceeds of any grant or loan made to the Borrower to finance the Project shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing therefor; or (ii) any such loan shall have become due and payable prior to the agreed maturity thereof. (b) Paragraph (a) of this Section shall not apply if the Borrower establishes to the satisfaction of the Association that: (i) 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 -6- (ii) 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 event is specified, namely, that the event specified in paragraph (a) (ii) of Section 5.01 of this Agreement shall occur, subject to the proviso of para- graph (b) of that Section. ARTICLE VI Termination Section 6.01. The date ninety (90) days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VII Representative 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 P.O. Box 30049 Lilongwe 3 Malawi Cable address: Telex: FINANCE 4407 MI Lilongwe 7 For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) -8- 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 MALAWI By /- Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By 6 -'C7Regional Vice President Eastern and Southern Africa -9- 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 Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Civil works under 4,600,000 85% Part A.1, A.2 and A.3, and Part B.1 and B.2 of the Project (2) Vehicles, equip- 1,800,000 100% of foreign ment, materials and 90% of local and furniture expenditures under Part A.1, A.2, A.3 and A.4, and Part B.1 and B.2 of the Project (3) Consultants' 1,500,000 100% of foreign services and and 90% of local training under expenditures Part A.2, A.3 and A.4, and Part B.1 and B.2 of the Project (4) Unallocated 800,000 TOTAL 8,700,000 - 10 - 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 fro-i 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 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 expenditures prior to the date of this Agreement. - 11 - SCHEDULE 2 Description of the Project The objective of the Project is to assist the Borrower in implementing the first phase of its National Health Plan (1986-1995), with special emphasis on family health issues. 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 objective: Part A: Ministry of Health: 1. Primary Health Care: (a) Expansion of the primary health care program from nine to 15 districts, including training of health staff of MOH, District Development Committees and Village Health Committees, and the provision of equipment, supplies, motorcycles and bicycles. (b) Constructing, furnishing and equipping about 19 new health centers and related housing facilities and upgrading six health subcenters to health centers. (c) Constructing, furnishing and equipping a district hospital and related housing facilities at Mzimba. 2. Management, Manpower and Support Systems: (a) Strengthening health services' management at the national, regional and district levels through: (i) reorganizing MOH's structure; (ii) establishing regional health teams; (iii) operating annual workshops in hospital management and administration; (iv) improving the health-planning capability of MOH as well as improving such capability at the district level, and - 12 - (v) supporting the accounting sections of MOH, the regional teams, the three major hospitals and the 21 district hospitals, including providing computers to MOH and the three major hospitals. (b) Strengthening of MOH's manpower development capacity through: (i) constructing, furnishing and equipping a nursing school and related facilities at Zomba; (ii) constructing, furnishing and equipping three regional training facilities for health workers; and (iii) supporting MOH's manpower planning and analysis capability. (c) Improvement of MOH's support systems through: (i) increasing MOH's monitoring and evaluation capabilities; (ii) constructing, furnishing and equipping pharma- ceutical depots at eight district hospitals, including provision of vehicles and supplies; (iii) establishing a quality control laboratory; (iv) training pharmacists, pharmacy technicians and assistants; and (v) reviewing and decentralizing the pharmaceutical system. 3. Family Health: (a) Support of the maternal and child health program through: (i) providing vehicles and boats for health services' delivery; (ii) developing an integrated family health course for about 200 health workers annually; - 13 - (iii) in-service training for about 900 health workers in priority diseases; (iv) preparing and distributing manuals and training materials for health workers; and (v) providing and distributing drugs annually for about 1,100 maternal and child health centers and about 640 prenatal clinics. (b) Expansion and reinforcement of the child-spacing program through: (i) constructing, furnishing and equipping surgical contraception units at seven district hospitals; (ii) constructing, furnishing and equipping an urban family health unit in Lilongwe, three health centers in Blantyre and Lilongwe, and upgrading two existing health centers in Blantyre and Lilongwe; (iii) reviewing training plans for surgical contraception and development of a system of quality control; (iv) training all health staff involved in the child- spacing program; and (v) preparing and distributing manuals and informational materials. (c) Establishment of a nutrition activities' program in MOH. 4. Administration Strengthening MOH's implementation capability by providing consultants' services, office equipment and supplies, and preparation of a subsequent project. Part B: Multisectoral Family Health Activities: 1. Introducing and supporting family health topics in MOCS's functional literacy and women's programs through: - 14 - (a) constructing and equipping a training center for the Northern Region; (b) training MOCS staff in health topics; (c) preparing and distributing informational materials; (d) training women's groups in nutritional subjects; and (e) constructing and operating fish ponds. 2. Introduction and support of family health education activities in the Malawi Young Pioneers program through: (a) training instructors; (b) providing informational materials and equipment; and (c) constructing fish ponds. 3. Development and implementation of nationwide information, education and communication programs dealing with family health subjects through: (a) preparing and distributing informational materials; and (b) training Information Department staff. The Project is expected to be completed by December 31, 1992. - 15 - SCHEDULE 3 Procurement and Consultants' Services Section I. Procurement of Goods and Works Part A: International Competitive Bidding: 1. Except as provided in Part D 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). 2. Civil works, furniture, equipment, vehicles and other items shall be bulked together in bidding packages to the maximum extent practicable. Part B: Preference for Domestic Manufacturers In the procurement of goods in accordance with the proce- dures described in Part A.1 hereof, goods manufactured in Malawi 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: Preference for Domestic Contractors In the procurement of works in accordance with the proce- dures described in Part A.1 above, the Borrower may grant a margin of preference to domestic contractors in accordance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraph 5 of Appendix 2 thereto. Part D: Other Procurement Procedures: 1. Civil works, which the Association agrees cannot be grouped due to the small size and nature of works involved, may be procured under contracts awarded on the basis of competitive bidding, advertised locally, or may be carried out by force account through MOWS, all in accordance with procedures satisfactory to the Association. 2. Items or groups of items estimated to cost less than the equivalent of $100,000 per contract, up to an aggregate amount not to exceed the equivalent of $1,000,000, and informational - 16 - materials and supplies may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association. 3. Items or groups of items estimated to cost less than the equivalent of $20,000 per contract, up to an aggregate amount not to exceed the equivalent of $300,000, may be procured under contracts awarded on the basis of a comparison of price quotations solicited from a list of at least three suppliers eligible under the Guidelines, in accordance with procedures acceptable to the Association. Part E: Review by the Association of Procurement Decisions: 1. Review of invitations to bid and proposed awards and final contracts: (a) With respect to each contract estimated to cost the equivalent of $200,000 or more, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contracts 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 Association, pursuant to paragraph 2 (d) of Appendix 1 to the Guidelines, shall be furnished to the Association 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 pre- ceding paragraph, the procedures set forth in paragraphs 3 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contracts are to be made out of the Special Account, the procedures shall be modified to ensure that the two conformed copies of each contract, together with the other information required to be furnished to the Association, pursuant to paragraph 3, shall be furnished to the Association as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 5 to this Agreement. (c) The provisions of the preceding subparagraphs (a) and (b) shall not apply to contracts on account of which the Associa- tion has authorized withdrawals from the Credit Account on the basis of statements of expenditure. Such contracts shall be retained in accordance with Section 4.01 (c) (ii) of this Agreement. - 17 - 3. The figure of 10% is hereby specified for purposes of para- graph 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 the consultants, referred to in Schedule 4 to this Agreement, whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Such consultants shall be selected, in accordance with principles and procedures satisfactory to the Association, 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. - 18 - SCHEDULE 4 Implementation Program 1. The Project Coordination Committee to be established, not later than October 1, 1987, shall consist of the Principal Secretary of the Department of Economic Planning and Development, as Chairman; the Principal Secretaries of MOH, MOWS and MOCS; the Chief Information Officer; the Secretary for Youth and Malawi Young Pioneers or his representative, and the respective Project Coordinators for Parts A and B of the Project's activities. Meetings of this Committee shall be convened as often as required, but at least four times a year. The Project Coordination Committee shall, in particular, approve the quarterly progress reports to be prepared by the respective Project Coordinators before submitting them to the Association. Such reports shall measure the progress of Project implementation against process indicators and annual implementation plans agreed upon between the Borrower and the Association and shall form the basis for the mid-term review to be carried out not later than December 31, 1988. Annual implementation plans shall be submitted to the Association for its review four months before the beginning of the Borrower's fiscal year. Part A of the Project: 2. MON shall be responsible for carrying out Part A of the Project, and shall appoint a full-time Project Coordinator whose qualifications and experience are satisfactory to the Association. 3. For the purpose of coordinating the activities under this part of the Project, the Borrower shall establish a Coordinating Committee within MOH, with the Principal Secretary of MOH as Chairman, including the Project Coordinator for Part A and representatives of the various units of MOH involved in Project activities. This Committee shall meet once each month to review the implementation of Part A of the Project. 4. In order to facilitate the carrying out of the construction program, MOH: (a) assisted by a clerk-of-works who shall be appointed to MOH, not later than October 1, 1987, shall work closely with MOWS in the execution of the civil works program; and - 19 - (b) shall appoint a procurement officer by October 1, 1988. 5. Within MOH, the Principal Secretary or his designated representative shall supervise the management and manpower components, the Controller (Technical Support Services) shall supervise the support systems components, the Controller (Family Health Services) shall supervise the child-spacing and nutrition programs, and the Controller (Community Health Services) shall supervise the primary health care programs. 6. In addition to the quarterly reports referred to in para- graph 1 of this Schedule, MOH shall conduct the following reviews and surveys during the implementation of Part A of the Project and submit the results thereof to the Association, for its review and comments, within three months of their completion: (a) a mid-term evaluation of the Primary Health Care Program by December 31, 1988; (b) annual plan assessments and review workshops; (c) a study of the impact of revised fee schedules on the utilization of services and the potential for health insurance by December 31, 1987; (d) a baseline health status and utilization survey by December 31, 1987; (e) annual impact studies of the various programs; (f) a special evaluation of the Expanded Program of Immunization by September 30, 1989; and (g) a tuberculosis prevalence survey by December 31, 1989. 7. With respect to Part A.1 of the Project, the Borrower shall ensure that the health centers constructed or upgraded under the Project shall be adequately staffed with at least one medical assistant and two enrolled nurses. 8. In order to implement the reorganization of MOH under Part A.2 of the Project, the Borrower shall: (a) submit to the Association, for its review and comments, a revised organization chart for MOH by September 1, 1987, and formally adopt such revised organization chart by October 1, 1987; - 20 - (b) establish, and make appointments to the positions of Controller (Clinical Services), Controller (Family Health Services), Controller (Community Health Services), Controller (Health Technical Support), three regional health officers and three regional nursing officers by October 1, 1987. 9. In order to facilitate the implementation of the cost reduction plan for MOH, the Borrower shall: (a) establish within MOH, not later than July 31, 1987, a Committee with the Deputy Secretary of MOH as Chairman and including representatives of Queen Elizabeth Central Hospital, Kamuzu Central Hospital and Zomba General Hospital to monitor the implementation of cost reduction measures; (b) establish, not later than October 1, 1987, the positions of expenditure control accountant at MOH, three regional accountants and one accountant at each of the three major hospitals; (c) establish, not later than August 31, 1988, a position of assistant accountant at each of the 21 district hospitals; (d) implement cost reduction measures at MOH and at Queen Elizabeth Central Hospital by December 31, 1987; (e) by March 31, 1988, submit to the Association for its review and comments, an evaluation of the cost reduction measures implemented by MOH; (f) decentralize finance and accounting functions of the three major hospitals from MOH to Queen Elizabeth Central Hospital, Kamuzu Central Hospital and Zomba General Hospital, respectively, by not later than April 30, 1988; (g) implement cost reduction measures at Kamuzu Central Hospital and Zomba General Hospital by April 30, 1988; and (h) implement cost reduction measures at all district hospitals by December 31, 1988. 10. In order to carry out the manpower development activities under Part A.2 of the Project, the Borrower shall: - 21 - (a) appoint, not later than September 1, 1987, a training officer to coordinate the in-service training programs in MOH; and (b) prepare and submit to the Association, not later than December 31, 1987, and thereafter, annually, in-service training programs for the following fiscal year. 11. With respect to Part A.3 of the Project, the Borrower shall appoint six clinical officers and 16 enrolled nurses to the urban clinics after their completion. Part B of the Project: 12. For the purposes of coordinating the activities under Part B of the Project, which will be carried out by various ministries and agencies of the Borrower, the Borrower shall establish a Coordinating Committee, with the Chief Development Officer in the Department of Economic Planning and Development as Chairman, and including representatives of the various units involved in Project activities. The Principal Secretary of MOCS shall be responsible for monitoring the implementation of activities under Part B of the Project. 13. The Principal Secretary of MOCS shall be responsible for Part B.1 of the Project. The Health, Information, Education and Communication Committee, to be established by September 1, 1987, with the Chief of Health Services as Chairman, and including representatives of the various agencies involved in providing health education shall work with MOCS in introducing family health topics into the programs. 14. The Secretary for Youth and Malawi Young Pioneers shall be responsible for activities under Part B.2 of the Project, and the Chief Information Officer shall be responsible for carrying out Part B.3 of the Project. - 22 - 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 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 of $900,000 to be withdrawn from the Credit Account and deposited into the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Except as the Association shall otherwise agree, 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 satisfactory evidence that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Special Account may be made as follows: (a) On the basis of a request or requests by the Borrower for a deposit or deposits which add up to the aggregate amount of the Authorized Allocation, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account such amount or amounts as the Borrower shall have requested. (b) The Borrower shall furnish to the Association requests for replenishment of the Special Account at such intervals as the Association shall specify. On the basis of such requests, the Association shall withdraw from the Credit Account and deposit into the Special Account such amounts as shall be required to replenish the Special Account with amounts not exceeding the amount of payments made out of the Special Account for Eligible - 23 - 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 the evidence supporting the request for such deposit furnished pursuant to paragraph 4 of this Schedule. 4. For each payment made by the Borrower out of the Special Account for which the Borrower requests replenishment pursuant to paragraph 3 (b) of this Schedule, the Borrower shall furnish to the Association, prior to or at the time of such request, such documents and other evide,-ze as the Association shall reasonably request, showing that such payment was made for Eligible Expen- ditures. 5. (a) Notwithstanding the provisions of paragraph 3 of this Schedule, no further deposit into the Special Account shall be made by the Association when either of the following situations first arises: (i) the Association shall have determined that all further withdrawals should be made by the Borrower directly from the Credit Account in accordance with the rrovisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or (ii) the total unwithdrawn amount of the Credit allo- cated to the Eligible Categories, minus 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 be equal to the equivalent of twice the amount of the Authorized Allocation. (b) Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to the Eligible Categories shall follow such procedures as 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. - 24 - 6. (a) If the Association shall have determined at any time that any payment out of the Special Account: (1) was made for any expenditure or in any amount not eligible pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence furnished pursuant to paragraph 4 of this Schedule, the Borrower shall promptly, upon notice from the Association, 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 ,ligible or justified. No further deposit by the Association into the Special Account shall be made until the Borrower has made such deposit or refund. (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 for. crediting to the Credit Account. 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