Conformed Copy - C2418 - Economic and Financial Management Project - Agreement 1

Page 1 CONFORMED COPY NORWEGIAN GRANT RELATED TO CREDIT NUMBER 2418 UG Agreement for the Administration of Certain Funds to be made available by the THE NORWEGIAN AGENCY FOR DEVELOPMENT COOPERATION REPRESENTING THE GOVERNMENT OF THE KINGDOM OF NORWAY in Conjunction with the Economic and Financial Management Project (Civil Service Reform) in the REPUBLIC OF UGANDA Dated January 5, 1995 NORWEGIAN GRANT RELATED TO CREDIT NUMBER 2418 UG AGREEMENT AGREEMENT, dated January 5, 1995, between the NORWEGIAN AGENCY FOR DEVELOPMENT COOPERATION, REPRESENTING THE GOVERNMENT of the KINGDOM OF NORWAY ("Nor-way") and the INTERNATIONAL DEVELOPMENT ASSOCIATION (the "Associa-tion") to provide for the administration by the Association of certain funds to be made available by Norway to the Republic of Uganda ("Uganda"). WHEREAS (A) the Agreement dated March 9, 1994, between Norway, the International Bank for Reconstruction and Development and the Association provides the framework for cofinancing of development projects by the parties thereto; (B) Norway wishes to make available to Uganda a grant in the amount of thirteen million Norwegian Kroner (NOK 13,000,000) (the "Grant") to assist Uganda in financing part of the termina-tion costs associated with either forced or voluntary retrenchment of civil servants or contracted Government employees required during the execution of Uganda's Economic and Financial Management Project (the Project); (C) Norway wishes that the proceeds of the Grant be incre-mental to the Credit extended for the same purposes by the Associ-ation to Uganda pursuant to the Development Credit Agreement No. 2418 UG, dated September 22, 1992, between Uganda and the Associa-tion (the "Development Credit Agreement"); and WHEREAS, the Association has agreed on the basis, inter alia, of the foregoing, to administer the Grant upon the terms and con-ditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: Page 2 ARTICLE I Section 1.01. The Association, as Administrator on behalf of Norway, shall enter into such agreement or agreements with Uganda, as it may deem appropriate but consistent with the terms and con-ditions of the Development Credit Agreement (excluding the debt service provisions thereof) for the purpose of assisting in the financing of the termination costs to retrenched civil servants or contracted Government employees ("the termination expenditures"). Such agree-ments with Uganda shall, inter alia, provide that the proceeds of the Grant may be withdrawn by Uganda to finance expenditures made (or, if the Administrator shall so agree, to be made) in respect of Termination Expenditures. The agreements shall also provide 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 by the Association to Norway. Section 1.02. The Association, as Administrator on behalf of Norway, shall have the sole responsibility for the supervision of the Project. Section 1.03. The administration and enforcement of any pro-visions of any agreement entered into between Uganda and the Association 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 exer-cise, refrain from exercising or waive any rights under such agreement or to modify any provision thereof provided, however, that, before suspending the right of Uganda 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 1.04. 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. ARTICLE II Section 2.01. (a) For the purpose of this Agreement, Norway shall, deposit an amount of thirteen million Norwegian Kroner (NOK 13,000,000) into the International Development Association's Cash Account 'T' (No. 0629.05.35-636) which is maintained with Norges Bank (the "Trust Account"). (b) The funds in the Trust Account shall be freely ex-change-able by the Association with other currencies as may facili-tate their administration. Section 2.02. The Association shall disburse from the Trust Account such amounts as from time to time shall be needed to meet Termination Expenditures financed or to be financed pursuant to Section 1.01 of this Agreement. Such dis-burse-ment shall be effected on the basis of withdrawal applica-tions for eligible expenditures submitted by Uganda to the Associ-ation in accordance with the Association's procedures for with-drawal of proceeds of credits made by the Association. Section 2.03. In order to assist in the defrayment of the costs of administration and other expenses incurred by the Association under this Agreement, the Association may invest and reinvest the funds in the Trust Account pending their disbursement to Uganda, and may retain for its own account the income from any such investment or reinvestment: (a) up to an amount equal to 2 percent of the Grant; and (b) an amount required to cover the cost of audit referred to in Section 3.01 (b) of this Agreement. The balance of the income from any such investment in excess of 2 percent and the cost of audit shall be credited to a separate account and may be used for such purposes as the Association and Norway shall agree. ARTICLE III Section 3.01. (a) The Association shall: (i) maintain separate records and accounts in respect of the funds in the Trust Account disbursed by the Association pursuant to the provisions of this Agreement; (ii) cause such accounts and records to be audited and certified by the Association's external auditors for each fiscal year that funds shall remain in the Trust Account and shall furnish to the report of such audit by said auditors to Norway. (b) Promptly after all funds made available under this Agreement have been disbursed from the Trust Account or upon termination of this Agreement, whichever is the earlier, the Asso-ciation shall furnish to Norway a final report and a financial Page 3 statement on the Trust Account together with an opinion of the Association's external auditors on such statement. The cost of such audit shall be paid from the investment income referred to in Section 2.03 above. ARTICLE IV Section 4.01. Norway and the Association shall consult from time to time at each other's request on all matters arising out of this Agreement. Section 4.02. The Association shall keep Norway informed of the progress made in the implementation of the Project. To such purpose, the Association shall furnish to Norway all relevant progress performance and assessment reports relating to the Project. Section 4.03. The Association shall inform Norway of all forthcoming major missions and meetings in connection with the Project and, subject to the consent of Uganda, shall afford represen-tatives of Norway the opportunity to participate in such missions and meetings. Section 4.04. 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. ARTICLE V Section 5.01. This Agreement shall become effective as of the date first above written and, subject to the provisions of this Article, shall continue in effect until all funds made available under this Agreement have been disbursed from the Trust Account to Uganda. Section 5.02. 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, the Agreement may be terminated at the initiative of such party by a ninety (90) days' notice in writing. Section 5.03. Upon termination of the 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 5.04. This Agreement shall be considered terminated if the Association has not entered into such agreement with Uganda referred to in Section 1.01 within ninety days following the effectiveness of this Agreement pursuant to Section 5.01 of this Agreement, and the funds shall be returned to Norway in accordance with Section 5.03 above. ARTICLE VI Section 6.01. This Agreement may be amended only by written agreement of the parties hereto. Section 6.02. 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 or by 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: For Norway: NORAD PB 8034 Dep. 0030 Oslo Norway Cable address: Telex: Page 4 NORAD-N 76548 NORAD-N Oslo 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. THE NORWEGIAN AGENCY FOR DEVELOPMENT COOPERATION REPRESENTING THE GOVERNMENT OF THE KINGDOM OF NORWAY By /s/ Sverre Melsom Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Jean-Louis Sarbib Acting Regional Vice President Africa