Tanzania - Agricultural Adjustment Credit : Credit 2116 - Agreement - Conformed

D)OCUM ENTS~ NORWEGIAN GRANT RELATED TO CREDIT NUMBER 2116 TA Agreement for the Administration of Certain Funds to be made available by the GOVERNMENT OF THE KINGDOM OF NORWAY in Conjunction with the Agricultural Adjustment Credit in the UNITED REPUBLIC OF TANZANIA Dated A , 1990 NORWEGIAN GRANT RELATED TO CREDIT NUMBER 2116 TA AGREEMENT AGREEMENT, dated i'Io J , 1990, between the NORWEGIAN AGENCY FOR DEVELOPMENT COOPERATION representing the Government of the Kingdom of Norway (Norway) and the INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) to provide for the administration by the Association of certain funds to be made available by Norway to the United Republic of Tanzania (Tanzania). WHEREAS (A) an agreement dated October 2, 1986, between Norway and the International Bank for Reconstruction and Development and the International Development Association provides the framework for co-financing of development projects by the parties thereto; (B) Norway is expected to enter into an agreement with Tanzania (the Grant Agreement) regarding a g!ant of up to a total amount of two hundred and twenty-eight million three hundred thousand Norwegian Kroner (NOK 228,300,000), which will be made available by Norway to assist Tanzania in the financing of its Agricultural Adjustment Program (the Program); (C) Norway wishes the aforementioned grant (hereinafter referred to as the Norwegian Grant) to be administered by the Association as incremental to the Credit extended by the Association to Tanzania pursuant to the Development Credit Agreement concerning the Agricultural Adjustment Program (Credit Number 2116-TA) dated April 6, 1990, (hereinafter referred to as the Development Credit Agreement); and WHEREAS, the Association, at the request of Norway, has agreed to administer the Norwegian Grant upon the terms and conditions hereinafter set forth; NOV THEREFORE the parties hereto hereby agree as follows: ARTICLE I Use of the Grant Section 1.01. The Grant shall be utilized during 1990 to meet expenditures in respect of the reasonable cost of goods for the execution of the Agricultural Adjustment Program described in the Preamble to the Development Credit Agreement. - 2 - ARTICLE II The Authority of the Association Section 2.01. The Association, as Administrator on behalf of Norway, shall enter into a development grant agreement and such other agreements with Tanzania, as it may deem appropriate but con- sistent with the terms and conditions of the Development Credit Agreement (excluding the debt service provisions thereof) for the purpose of assisting in financing the Program. Such agreements with Tanzania shall, inter alia, provide that the proceeds of the Norwegian Grant may be withdrawn by Tanzania to finance the reason- able cost of goods required for the execution of the Program and otherwise eligible for financing under the Development Credit Agreement, and that the amounts to be withdrawn need not be repaid and shall bear no interest or other charges. A copy of each such agreement shall be furnished to Norway. Section 2.02. The Association, as Administrator on behalf of Norway, shall have the sole responsibility for supervision of the Program. Section 2.03. The administration and enforcement of any pro- visions of any agreement entered into between Tanzania and the Asso- ciation for the purposes of this Agreement shall be handled solely by the Association, and the Association specifically reserves the right, at its discretion and without notice to Norway, to exercise, refrain from exercising or waive any rights under such agreement or to modify any provision thereof, provided, however, that before suspending the right of Tanzania to make withdrawals of funds under such agreement, the Association shall inform Norway and afford Norway a reasonable opportunity for consultation with the Association. Section 2.04. The Association shall exercise the same care in the discharge of its functions under this Agreement as it exercises with respect to the administration and management of its own affairs and shall have no further responsibility to Norway in respect thereof. -3- ARTICLE III Payment Section 3.01. For the purpose of this Agreement, Norway shall deposit, subject to Parliamentary appropriations, an amount of two hundred and twenty-eight million three hundred thousand Norwegian Kroner (NOK 228,300,000) in Account-T with the Bank of Norway in the name of the Association (the Trust Account). The funds in the Trust Account shall be freely exchangeable by the Association with other currencies as may facilitate their administration. Section 3.02. The Association shall disburse from the Trust Account such amounts as from time to time shall be needed to meet the reasonable cost of goods financed or to be financed pursuant to Section 2.01 of this Agreement. Such disbursements shall be effected on the basis of applications for withdrawal for eligible expendi- tures submitted by Tanzania to the Association in accordance with the Association's normal disbursement procedures for withdrawal and disbursement of proceeds of credits made by the Association. Section 3.03. In order to assist in defraying the cost of administration and other expenses incurred by the Association under this Agreement, the Association may invest and reinvest the Norwegian Grant funds in the Trust Account, pending their disbursement to Tanzania, and may retain for its own account the income from any such investment or reinvestment. ARTICLE IV Financial Accountability Section 4.01. (a) The Association shall: (i) maintain separate records and accounts in respect of the funds in the Trust Account and disbursed by the Association pursuant to the provisions of this Agreement; and (ii) the Association shall furnish on a semi-annual basis to Norway a statement of account on such records and accounts; and (b) the Association shall cause said records and accounts to be audited and certified by the Association's external auditors when all funds in the Trust Account have been disbursed and shall furnish the report of such audit by said auditors to Norway. ARTICLE V Cooperation and Consultations Section 5.01. Norway and the Association shall consult, from time to time, at their mutual request, on all matters arising out of this Agreement. In addition, annual consultations between representatives of the Government of Tanzania and the parties to this Agreement shall be held to discuss the implementation of the individual program on the basis of progress reports submitted to Norway and Tanzania by the Association. Section 5.02. The Association shall keep Norway informed of the progress of the Program. To that end, the Association shall furnish to Norway all relevant progress, performance and assessment reports relating to the Program. Section 5.03. The Association shall inform Norway of any forthcoming major missions and meetings in connection with the Program and shall afford representatives of Norway the opportunity to participate in such missions and meetings. Section 5.04. The Association shall inform Norway of any proposed significant modification to the Development Credit Agree- ment and shall afford Norway a reasonable opportunity to exchange views with the Association before effecting any such modification. Section 5.05. If circumstances arise during the implementation of the Program which could lead to substantial changes in the project document and/or the way of execution of the Program, the Association shall inform Norway and Tanzania in writing about such circumstances and the proposal for alterations of the Program. Within a month after having received such information Norway shall consult the Association. If after consultation no agreement can be reached between Norway and the Association about the proposal for alterations of the Program, Norway is entitled to terminate the payments from the Grant. ARTICLE VI Effectiveness and Termination Section 6.01. This Agreement shall become effective upon its signature and, subject to the provisions of this Article, shall continue in effect until all disbursements have been made from the - 5 - Trust Account to Tanzania, unless terminated in accordance with the provisions of Section 6.02 below. Section 6.02. If, at any time it appears to either party that the purposes of this Agreement can no longer effectively or appro- priately be carried out, this Agreement may be terminated at the initiative of such party after sixty (60) days' written notice to that effect. Before termination of this Agreement, there shall be mutual consultations between the parties with a view to securing successful realization of the purpose of the Norwegian Grant. Section 6.03. Upon termination of this Agreement, unless the parties agree on another course of action, any agreement or portion thereof entered into by the Association, as Administrator on behalf of Norway, shall be transferred to Norway and any funds or other property of Norway held hereunder by the Association shall be returned to Norway, and the Association's administration shall be considered terminated. Section 6.04. Promptly after termination of this Agreement, the Association shall furnish to Norway a final report and a financial statement on the Trust Account, together with an opinion of the Association's external auditors on such statement. ARTICLE VII Final Provisions Section 7.01. This Agreement may be amended only by written agreement of the parties hereto. Section 7.02. Any notice or request required or permitted to be given or made under this Agreement, and any agreement between the parties contemplated by this Agreement, shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand, mail,,telegram, cable or telex to the party to which it is required or permitted to be given, or made at such party's address hereinafter specified, or at such other addresses as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: -6- For Norway: The Norwegian Agency for Development Cooperation P.O. Box 8034 Dep. N-0030 Oslo 1 Norway Telefax: Telex: 47-2-314401 76548 NORAD-N For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 197688 (TRT) Washington, D.C. 248423 (RCA) 64145 (WUI) or 82987 (FTCC) IN WITNESS WHEREOF, the undersigned duly authorized thereto, have signed this Agreement. NORWEGIAN AGENCY FOR DEVELOPMENT COOPERATION By / i Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /g/ Ve1)44 Z11A Regional Vice President Africa