Zambia - Economic Recovery Program Project : Credit 2214 - Agreement - Conformed

I II I/ ( / E.RP Agreement between THE MINISTER FOR DEVELOPMENT COOPERATION OF THE NETHERLANDS and INTERNATIONAL DEVELOPMENT ASSOCIATION for the Administration of Certain Funds to be made available by THE MINISTER FOR DEVELOPMENT COOPERATION OF THE NETHERLANDS (The Republic of Zambia) Dated 1991 AGREEMENT AGREEMENT dated as of , 1991, between the MINISTER FGR DEVELOPMEN COOPERATION OF THE NETHERLANDS (hereinafter referred to as the Minister) and the INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter referred to as the Association). Whereas (A) the Association intends to enter into an agreement (hereinafter referred to as the Development Credit Agreement) with the Republic of Zambia (hereinafter referred to as Zambia) in which the Association will make available to Zambia a credit for an Economic Recovery Program (hereinafter referred to as the Program); (B) the Minister wishes to make available a grant in an amount equivalent to Dutch Guilders 10,000,000 to assist Zambia settle its arrears to the International Bank for Reconstruction and Development (hereinafter referred to as the Bank) and the Association; (C) the Minister further wishes the Association to administer said funds until the arrears concerned have been settled by Zambia, and the Association has agreed to administer them upon the tcjns and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Administration of the Funds Section 1.01. For the purpose of this Agreement the Minister shall deposit an aount of Dfls 10,000,000 (the Grant) into the "T" Account maintained in the name of the Association with De Nederlandsche Bank (hereinafter referred to as the Trust Account). The funds in the Trust Account shall be freely exchangeable by the Association with other currencies as may facilitate their administration hereunder. (b) The Grant shall be deposited into the Trust Account promptly after the effectiveness of this Agreement. To facilitate the administration of trust fund assets, the Association may deposit other trust fund assets into the Trust Account. Section 1.02. The Minister hereby appoints the Association as administrator of the Grant and authorizes the Association to: (a) hold and disburse the proceeds of the Grant thereof towards making the payments of arrears owed by Zambia to the Bank and the Association as soon as possible but niot later than March 31, 1991; -2- and (b) do any and all such acts and things as may be necessary or appropriate to fully accomplish the foregoing. The Association shall so apply the proceeds of the Grant only after the Board of Evecutive Directors of the Association has approved the Development Credit Agreement for the Program. Section 1.03. The Association shall exercise the same care in the discharge of its functions hereunder as it exercises with respect to the administration and management of its own affairs and shall have no further responsibility to the Minister in respect thereof. Section 1.04. The Association may invest and reinvest the Grant in the Trust Account pending its withdrawal pursuant to Section 1.02 of this Agreement, and may retain for its own account the income from such investment or reinvestment to assist in the defrayal of the costs of administration of the Grant, ARTICLE II Records, Accounts Section 2.01. The Association shall: (a) maintain separate records and ledger accounts of the Grant withdrawn from the Trust Account; and (b) when all the Grant has been withdrawn from the Trust Account, prepare a financial statement duly authorized by the Association's external auditors with respect to the Trust Account and forward a copy to the Minister. ARTICLE III Consultation Section 3.01. (a) The Minister and the Association shall consult from time to time at the request of each other on all matters arising from this Agreement and other matters of common interest to them in fulfilling the objectives of the Grant. (b) If disbursement of the Grant as provided in Section 1.02 of this Agreement does not take place on or before March 31, 1991 the Minister and the Association shall consult each other on the further disposition of the Grant. -3- ARTICLE -V Effectiveness, Termination Section 4.01. This Agreement shall become effective upon signatures by the parties. Section 4.02. If at any time it appears to either party that the purposes of this Agreement cannot effectively or appropriately be carried out, the arrangements set forth herein may be terminated at the initiative of such party on thirty days' notice in writing to the other. Upon such termination, unless the Minister and the Association otherwise agree, any of the Grant funds held hereunder by the Association shall be returned to the Minister and the Association's administration shall be considered terminated. Section 4.03. The Agreement shall terminate when the Grant amount has been withdrawn and applied by the Association as provided in Section 1.02 of this Agreement or has been otherwise disposed as provided in Section 3.01 (b) of this Agreement. ARTICLE V Hiscellaneous Section 5.01. This Agreement may be amended only by written agreement of the parties hereto. Section 5.02. Any notice or r,.,quest 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 or mail, telephone, cable, telex or rapidfax 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 address as such party shall have designated by notice to the party giving notice or making such request. The addresses so specified are: -4- For the Minister: Ninistry of Foreign Affairs Bezuidenhoutseweg 67 P.0. Box 20061 2500 EB The Hague Netherlands Telex: 31326 BuZa NL 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) -5- IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have caused this Agreement to be signed in their respective names as of the day and year first above written. MINISTER FOR DEVELOPMENT COOPERATION OF THE NETHERLANDS By1 / Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By c /jf7 rRegional Vice President Africa