Zambia - Privatization And Industrial Reform Credit : Credit 2405 - Agreement - Conformed

DANISH GRANT RELATED TO CREDIT NUMBER 2405 ZA Agreement between GOVERNMENT OF KINGDOM OF DENMARK and INTERNATIONAL DEVELOPMENT ASSOCIATION for the Administration of Certain Funds to be made available by GOVERNMENT OF THE KINGDOM OF DENMARK in conjunction with the Privatization and Industrial Reform Credit (The Republic of Zambia) Dated )c A ,2q , 1992. DANISH GRANT RELATED TO CREDIT NUMBER 2405 ZA AGREEMENT AGREEMENT dated as of 1)eee'rv- c29 , 1992,, between the GOVERNMENT OF THE KINGDOM OF DENMARK (hereinafter referred to as DENMARK) and the INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter referred to as the Association). Whereas (A) the Association has entered 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 makes available to Zambia a credit for a Privatization and Industrial Reform Adjustment Credit (hereinafter referred to as the Program); (B) Denmark wishes to make available a grant in an amount equivalent to Danish Kroner 40,000,000 to support the Program to be paid out in two tranches of Danish Kroner 20,000,000 each; and (C) Denmark further wishes the Association to administer said funds and the Association has agreed to administer them upon the terms 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, Denmark shall deposit two amounts of Danish Kroner 20,000,000 each for a total of Danish Kroner 40,000,000 (the Grant) into the "T" Account, maintained in the name of the Association, with Denmark National 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 first tranche of the Grant shall be deposited into the Trust Account promptly after the effectiveness of this Agreement. The second tranche of the Grant shall be deposited as soon as 80% of the first tranche has been utilized. To facilitate the administration of trust fund assets, the Association may deposit other trust fund assets into the Trust Account. Section 1.02. Denmark hereby appoints the Association as administrator of the Grant on the terms laid out in the Development - 2 - Credit Agreement and authorizes the Association to: (a) hold and disburse the proceeds of the Grant thereof towards the financing of the Program; and (b) do any and all such acts and things as may be necessary or appropriate to fully accomplish the foregoing. 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 Denmark 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 in an amount equal to two percent of the amounts deposited by Denmark under this Agreement. The balance of the income from any such investment or reinvestment shall be repaid to Denmark upon the termination of this Agreement. Section 1.05. Upon termination of the Grant or at intervals not exceeding six months the Association shall report to Denmark on the progress of the Program. 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 Denmark. ARTICLE III Consultation Section 3.01. Denmark 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. -3- ARTICLE IV 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 Denmark and the Association otherwise agree, any of the Grant funds held hereunder by the Association shall be returned to Denmark 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. ARTICLE V Miscellaneous Section 5.01. This Agreement may be amended only by written agreement of the parties hereto. Section 5.02. 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 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 Denmark The Danish International Development Agency Asiatisk Plads 2 DK-1448 Copenhagen K. Denmark Cable address: Telex: DANIDA 31 292 ERT DK 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. GOVERNMENT OF THE KINGDOM OF DENMARK By1, Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /4/ Edkcww( t1.~K~~A, R io iVice President Africa