Conformed Copy - C2407 - National Agricultural Export Promotion Project - Development Credit Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2407 GUI (National Agricultural Export Promotion Project) between REPUBLIC OF GUINEA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated August 6, 1992 CREDIT NUMBER 2407 GUI DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated August 6, 1992, between REPUBLIC OF GUINEA (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS: (A) 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 the financing of the Project; (B) the Association has received a letter dated March 26, 1992 from the Borrower describing a program of actions, objectives and policies designed to develop its agricultural export sector (the Program) and declaring the Borrower's commitment to the execution of the Program; and (C) the Borrower intends to receive from the Fonds d'Aide et de Cooperation (FAC) a grant (the FAC Grant) in an amount equivalent to $600,000 to assist in financing the Project on the terms and conditions set forth in an agreement (the FAC Grant Agreement) to be entered into between the Borrower and FAC; and 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; Page 2 NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Development 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) "CPP" means the Comite de Pilotage du Projet referred to in Section 3.03 (a) of this Agreement; (b) "Project Preparation Advances" means the project pre- paration advances granted by the Association to the Borrower pur- suant to exchanges of letters dated February 21, 1989 and March 6, 1989; June 12, 1990 and July 24, 1990; December 13, 1990 and February 11, 1991; June 6, 1991; and June 25, 1991; and June 6, 1991 and February 11, 1992 between the Borrower and the Association; (c) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement; (d) "GF" means Guinean Franc, the currency of the Borrower; (e) "PIF" means Private Investment Fund, a corporation to be established under the Project in accordance with the provisions of Section 3.03 (d) of this Agreement; and (f) "CCIAG" means the Chambre de Commerce, d'Industrie et d'Agriculture de Guinee, of the Borrower. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount in various currencies equivalent to fifteen million two hundred Special Drawing Rights (SDR 15,200,000). 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 dollar a special deposit account in a commercial bank on terms and conditions satisfactory to the Association, including appropriate protection against set-off, seizure or attachment. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 5 to this Agreement. (c) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and pay to itself the amount required to repay the principal amount of the Project Preparation Advances withdrawn and outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advances shall thereupon be cancelled. Page 3 Section 2.03. The Closing Date shall be December 31, 1999 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 on the principal amount of the Credit not withdrawn from time to time at a rate to be set by the Association as of June 30 of each year, but not to exceed the rate of one-half of one percent (1/2 of 1%) per annum. (b) The commitment charge shall accrue: (i) from the date sixty days after the date of this Agreement (the accrual date) to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or cancelled; and (ii) at the rate set as of the June 30 immediately preceding the accrual date or at such other rates as may be set from time to time thereafter pursuant to paragraph (a) above. The rate set as of June 30 in each year shall be applied from the next payment date in that year specified in Section 2.06 of this Agreement. (c) 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 Association a service charge at the rate of three-fourths of 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 March 15 and September 15 in each year. Section 2.07. (a) Subject to paragraphs (b) and (c) below, the Borrower shall repay the principal amount of the Credit in semi- annual installments payable on each March 15 and September 15 commencing September 15, 2002 and ending March 15, 2032. Each installment to and including the installment payable on March 15, 2012 shall be one percent (1%) of such principal amount, and each installment thereafter shall be two percent (2%) of such principal amount. (b) Whenever (i) the Borrower's gross national product per capita, as determined by the Association, shall have exceeded $790 in constant 1985 dollars for five consecutive years, and (ii) the Bank shall consider the Borrower creditworthy for Bank lending, the Association may, subsequent to the review and approval thereof by the Executive Directors of the Association and after due con- sideration by them of the development of the Borrower's economy, modify the terms of repayment of installments under paragraph (a) above by requiring the Borrower to repay twice the amount of each such installment not yet due until the principal amount of the Credit shall have been repaid. If so requested by the Borrower, the Association may revise such modification to include, in lieu of some or all of the increase in the amounts of such installments, the payment of interest at an annual rate agreed with the Association on the principal amount of the Credit withdrawn and outstanding from time to time, provided that, in the judgment of the Association, such revision shall not change the grant element obtained under the above-mentioned repayment modification. (c) If, at any time after a modification of terms pursuant to paragraph (b) above, the Association determines that the Borrower's economic condition has deteriorated significantly, the Association may, if so requested by the Borrower, further modify the terms of repayment to conform to the schedule of installments as provided in paragraph (a) above. Page 4 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 and agricultural practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) Without limitation upon the provisions of paragraph (a) of this Section regarding the provision of funds, the Borrower shall: (i) open and thereafter maintain in GF and in the name of the Project (the Project Account) in a commercial bank on terms and conditions satisfactory to the Association; and (ii) thereafter deposit into the Project Account on the first day of every calendar quarter commencing on January 1, 1993, an amount equivalent to budgetary allocations required to cover anticipated expenditures for the Project over that quarter; (c) Amounts deposited into the Project Account pursuant to paragraph (b) above shall be used only to make payments to meet expenditures made or to be made in respect of the reasonable cost of goods and services for the Project. 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. Section 3.03. For the purposes of carrying out the Project, the Borrower shall: (a) establish and thereafter maintain CPP with functions, responsibilities and qualified and experienced staff in adequate numbers, all satisfactory to the Association; (b) conclude contractual arrangements with relevant institu- tions satisfactory to the Association to: (i) provide required expert advice (including technical, informational and managerial and training) to agricultural operators and agricultural associations; and (ii) strengthen the performance of small- and medium-scale agricultural enterprises; (c) conclude with relevant services, departments or agencies of the Borrower appropriate administrative arrangements satisfactory to the Association to ensure the proper execution of Parts B.1, B.2, B.4 and B.5 of the Project including a contribution in the amount of 15% to be made in kind by rural communities towards the costs of rural roads rehabilitation; (d) (i) undertake all necessary measures as required to facilitate the establishment of the PIF scheme; (ii) onlend to the PIF management company a maximum amount equivalent to $1,600,000 out of the proceeds of the Credit, in accordance with the terms and conditions of onlending agreement satisfactory to the Association; and (iii) require that the activities entrusted to the PIF promoter and the operations of the PIF management company be at all times carried out by qualified and experienced staff in accordance with contractual arrangements stipulated in the onlending agreement Page 5 referred to in subparagraph (ii) above; (e) (i) prepare draft annual work programs including training programs and submit them to the Association for review and comments no later than October 31 of each year; and (ii) thereafter promptly implement said work and training programs; and (f) (i) carry out a Mid-Term Review with the Association no later than December 31, 1995 to assess the progress achieved in the execution of the Project; and (ii) promptly implement the recom- mendations resulting from the Mid-Term Review as they shall have been agreed upon with 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 accordance 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; (ii) retain, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account or payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing 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 Page 6 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 events are specified: (a) a situation has arisen which shall make it improbable that the program, or a significant part thereof, will be carried out; (b) (i) Subject to subparagraph (ii) of this paragraph, the right of the Borrower to withdraw the proceeds of the FAC Grant made to the Borrower for the financing of the Project shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms thereof. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Association that: (A) such suspension, cancellation, or termination is not caused by the failure of the Borrower to perform any of its obligations under such agreement; and (B) 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. ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the CPP has been established in accordance with the provisions of Section 3.03 (a) of this Agreement; and (b) the Project Account referred to in Section 3.01 (b) has been opened and an amount of GF 250,000,000 has been deposited therein. Section 6.02. 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 Representatives of the Borrower; Addresses Section 7.01. The Minister of the Borrower responsible for finance 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 Planning and Finance B.P. 221 Conakry Guinea Cable address: Telex: Page 7 22399 MIFIGE For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 248423 (RCA) Washington, D.C. 82987 (FTCC) 64145 (WUI) or 197688 (TRT) 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 GUINEA By /s/ Elhadji Boubacar Barry Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Edwin Lim Acting Regional Vice President Africa 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 2,200,000 100% of foreign expenditures and 80% of local expenditures (2) Vehicles, goods 1,020,000 100% and equipment except for Part A. 3 of the Project (3) Vehicles, goods 180,000 100% and equipment Page 8 for Part A. 3 of the Project (4) Training and 260,000 100% operating costs for Part A.3 of the Project (5) Consulting services 6,600,000 100% and training except for Part C.2 of the Project Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (6) Consulting services 370,000 100% for Part C.2 of the Project (7) Onlending to 1,100,000 100% PIF manage- ment company (8) Operating costs 730,000 100% through December 31, 1993 and 67% thereafter (9) Refunding of 1,400,000 Amounts due Project pursuant to Preparation Section 2.02 (c) Advances of this Agreement (10) Unallocated 1,340,000 __________ TOTAL 15,200,000 ========== 2. For the purposes of this Schedule, the following terms have the following meaning: (a) "Operating costs" means expenditures in respect of items such as fuel, lubricants, costs for repair and maintenance of vehicles and office equipment, office supplies, expenses for travel related to the Project and salaries for contractual staff hired for the execution of the Project; (b) "foreign expenditures" means expenditures made in a currency other than the currency of the Borrower and for goods or services supplied from a territory other than the Borrower's territory; and (c) "local expenditures" means expenditures made in the currency of the Borrower. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made: (a) in respect of payments made for expenditures prior to the date of this Agreement; (b) in respect of payments made for expenditures under Categories (3) and (4) unless the Association has received evidence satisfactory to it that the CCIAG has been restructured in accordance with revised statutes satisfactory to the Association (namely that the Chairman of CCIAG has been elected by the Consular Assembly; a qualified and experienced professional has been appointed as CCIAG Secretary General; the terms and conditions of employment of CCIAG staff are subjected to labor law and a schedule to settle CCIAG overdue debts is adopted); and (c) in respect of payments made for expenditures under Category (7) unless the Association has received evidence Page 9 satisfactory to it that the onlending agreement referred to in Section 3.03 (d) (ii) has been concluded. SCHEDULE 2 Description of the Project The objectives of the Project are to improve the capability of the Borrower to increase agricultural production for export and to establish an appropriate incentive framework to attract private equity investment in the agricultural export sector. 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 objectives: Part A: Strengthening of Private Sector Institutions dealing with Agricultural Exports 1. Assistance to operators of the agricultural exports sector established in Guinea to build viable partnerships with foreign investors so as to promote an efficient transfer of technical know- how, financial resources and adequate knowledge conducive to a better access to export markets. 2. Adequate training of national agriculture investors and operators in subject matters relevant to an efficient operation of their businesses. 3. Restructuring of CCIAG and strengthening its capability to serve its members, in particular, with respect to export operations. 4. Assistance to professional associations in the agricultural export sector to increase their performance at all levels of their operations. Part B: Support to Agricultural Production 1. Provision of adequate extension services to farmers through relevant agencies of the Borrower and private nucleus estates to increase agricultural production to meet export demand. 2. Execution of an adaptive research program aimed at finding practical remedies to agronomic and technological constraints that currently restrain agricultural productivity for export products. 3. Provision of specialized management advice and services tailored to the needs of small- and medium-scale agricultural enterprises. 4. Assistance to improve the performance of farmers' associations. 5. Rehabilitation of about 550 km of access roads in the rural area. Part C: Mobilization of Financial Resources for Agricultural Investments 1. Assistance to a Mutual Credit Company operating in Guinea to establish a new branch in the prefecture of Mamou and to expand the existing branch in the prefecture of Kindia so as to facilitate credit dispensation to small- and medium-scale agricultural enterprises. 2. Assistance to facilitate the establishment and management of a Private Investment Fund to mobilize equity funds for productive investments. Part D: Project Coordination and Management 1. Acquisition of logistics support required to ensure adequate Page 10 coordination and execution of the Project. 2. Training of staff responsible for the execution of the Project. 3. Development and implementation of a Project Monitoring and Evaluation system. * * * The Project is expected to be completed by June 30, 1999. SCHEDULE 3 Procurement and Consultants' Services Section I. Procurement of Goods and Works Part A: International Competitive Bidding 1. Except as provided in Part B 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. To the extent practicable, contracts for works shall be grouped into bid packages estimated to cost the equivalent of $250,000 or more; and contracts for vehicles shall be grouped into one bid package estimated to cost the equivalent of $300,000 or more. Part B: Other Procurement Procedures 1. Items or groups of items estimated to cost the equivalent of $250,000 or less per contract, up to an aggregate amount equivalent to $600,000, and civil works estimated to cost the equivalent of $250,000 or less per contract up to an aggregate amount not exceeding the equivalent of $700,000 may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association. 2. Items or groups of items estimated to cost the equivalent of $100,000 or less per contract, up to an aggregate amount equivalent to $400,000, may be procured under contracts awarded on the basis of comparison of price quotations obtained from at least three suppliers eligible under the Guidelines, in accordance with procedures acceptable to the Association. Part C: Review by the Association of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract estimated to cost the equivalent of $250,000 or more, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract 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 said paragraph 2 (d) 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 preceding paragraph, the procedures set forth in paragraphs 3 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract, are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract, together with the other information required to be furnished to the Association pursuant to said paragraph 3, shall be furnished to the Association as part of the evidence to be furnished Page 11 pursuant to paragraph 4 of Schedule 5 to this Agreement. (c) The provisions of the preceding subparagraph (b) shall not apply to contracts on account of which withdrawals from the Credit Account are to be made on the basis of statements of expenditure. 2. The figure of 15% is hereby specified for purposes of paragraph 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 consultants 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. SCHEDULE 4 Special Account 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (1) through (8) 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 equivalent to $500,000 to be withdrawn from the Credit Account and deposited into the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. 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 evidence satisfactory to it that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Special Account shall be made as follows: (a) For withdrawals of the Authorized Allocation, the Borrower shall furnish to the Association a request or requests for a deposit or deposits which do not exceed the aggregate amount of the Authorized Allocation. On the basis of such request or requests, 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) (i) For replenishment of the Special Account, the Borrower shall furnish to the Association requests for deposits into the Special Account at such intervals as the Association shall specify. (ii) Prior to or at the time of each such request, the Borrower shall furnish to the Association the documents and other evidence required pursuant to paragraph 4 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into Page 12 the Special Account such amount as the Borrower shall have requested and as shall have been shown by said documents and other evidence to have been paid out of the Special Account for eligible 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 said documents and other evidence. 4. For each payment made by the Borrower out of the Special Account, the Borrower shall, at such time as the Association shall reasonably request, furnish to the Association such documents and other evidence showing that such payment was made exclusively for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Schedule, the Association shall not be required to make further deposits into the Special Account: (a) if, at any time, the Association shall have determined that all further withdrawals should be made by the Borrower directly from the Credit Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or (b) once the total unwithdrawn amount of the Credit allocated to the eligible Categories, less 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 equal the equivalent of twice the amount of the Authorized Allocation. 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. 6. (a) If the Association shall have determined at any time that any payment out of the Special Account: (i) was made for an expenditure or in an amount not eligible pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association: (A) provide such additional evidence as the Association may request; or (B) 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 eligible or justified. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (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. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to paragraph 6 (a), (b) and (c) of this Schedule shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions. Page 13