Conformed Copy - C2088 - The Alleviation of Poverty and Social Costs of Adjustment Project - DANIDA Grant Agreement

Page 1 DANIDA GRANT RELATED TO CREDIT NUMBER 2088 UG DANIDA Grant Agreement (The Alleviation of Poverty and the Social Costs of Adjustment Project) between THE REPUBLIC OF UGANDA and INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of Grant Funds Provided by the DANISH INTERNATIONAL DEVELOPMENT AGENCY Dated January 27, 1993 DANIDA GRANT RELATED TO CREDIT NUMBER 2088 UG DANIDA GRANT AGREEMENT AGREEMENT, dated January 27, 1993, between the REPUBLIC OF UGANDA (the Recipient) and the INTERNATIONAL DEVELOPMENT ASSOCIATION, as Administrator (the Administrator) of Grant Funds provided by the DANISH INTERNATIONAL DEVELOPMENT AGENCY (DANIDA). WHEREAS: (A) the Grantee has requested the assistance of the International Development Association (the Association) and DANIDA in the financing of Part G of the Project (the Project) described in Schedule 2 to the Development Credit Agreement No. 2088 UG, dated February 8, 1990 as amended, between the Recipient and the Association (the Development Credit Agreement); (B) the Association has granted a Credit for this purpose on the terms and conditions set forth in the Development Credit Agreement; (C) DANIDA wishes to make available to the Grantee a grant in an amount equivalent to eighteen million Danish Kroner (DKr. 18,000,000) (the DANIDA Grant) to assist the Grantee in carrying out Part G of the Project on the terms and conditions hereinafter set forth; (D) pursuant to arrangements, dated December 17, 1992, between DANIDA and the Association, (the DANIDA Administration Arrangement), (the DANIDA Administration Arrangements) DANIDA has requested the Association, and Page 2 the Association has accepted, to administer the DANIDA Grant in accordance with the provisions of those arrange- ments; and (E) the Grantee acknowledges that the financial assistance extended to the Grantee under this DANIDA Grant Agreement shall be considered as part of the bilateral development aid extended by DANIDA to the Grantee; 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, (the General Conditions), constitute an integral part of this Agreement subject, however, to the following modifications thereof: (a) the term "Association", wherever used in the General Conditions, means the International Development Association, acting as Administrator of the DANIDA Grant, pursuant to the arrangements between DANIDA and the Association referred to in the Preamble to this Agreement, except in the phrase "member of the Association" in Sections 2.01 (5), 4.02 (b) and 6.02 (e); (b) the term "Development Credit Agreement", wherever used in the General Conditions, means this Agreement; (c) the term "Credit", wherever used in the General Conditions, means the DANIDA Grant extended to the Grantee under this Agreement; (d) the term "Credit Account", wherever used in the General Conditions, shall be amended to read "DANIDA Grant Account"; (e) Section 4.01 shall be modified to read: "Withdrawals from the DANIDA Grant Account shall be made in dollars; provided, however, that, if the expenditures to be financed out of the proceeds of the DANIDA Grant have been paid or are payable in another currency, the Administrator shall, at the request of the Grantee and at the time of a withdrawal from the DANIDA Grant Account, purchase such currency with the proceeds of such withdrawal." (f) in Section 6.02, the term "Association" shall also include the International Development Association acting in its own capacity; (g) Section 9.06 (c) shall be modified to read: "(c) Not later than six months after the Closing Date or such later date as may be agreed for this purpose between the Grantee and the Administrator, the Grantee shall prepare and furnish to the Administrator a report, of such scope and in such detail as the Administrator shall reasonably request, on the execution of the Project referred to in the Preamble to the DANIDA Grant Agreement, the performance by the Grantee and the Page 3 Administrator of their respective obligations under the DANIDA Grant Agreement and the accomplishment of the purposes of the DANIDA Grant"; (h) Sections 3.02, 3.03, 3.04, 3.05, 4.01, 4.03, 4.04, 4.06, 6.05, 7.01, 8.01 (a), 12.02 and 12.05 are deleted; and (i) the term "Borrower", whenever used in the General Conditions, means the Grantee. Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions, in the Preamble to this Agreement and in the Development Credit Agreement have the respective meanings therein set forth. ARTICLE II The Grant Section 2.01. The Administrator agrees to extend to the Grantee, on the terms and conditions set forth or referred to herein, a grant in an amount equivalent to eighteen million Danish Kroner (DKr. 18,000,000). Section 2.02. The amount of the DANIDA Grant may be withdrawn from the DANIDA Grant Account (a) in accordance with the provisions of Schedule 1 to the Development Credit Agreement, as such Schedule may be amended from time to time by agreement between the Grantee and the Administrator, and (b) to pay for the cost of an audit report in accordance with the provisions of the DANIDA Administration Arrangement, to pay for an audit to be made by the Administrator's external auditors of disbursements of the DANIDA Grant. Section 2.03. (a) Except as the Administrator shall otherwise agree, contracts for goods and services to be financed out of the proceeds of the DANIDA Grant shall be procured in accordance with the provisions of Schedule 3 to the Development Credit Agreement. (b) If the Administrator shall have reasonably determined that the procurement of any item is inconsistent with the procedures set forth or referred to in paragraph (a) above, no expenditures for any such item shall be financed out of the proceeds of the DANIDA Grant, and the Administrator may, by notice to the Grantee, without in any way restricting or limiting any other right, power or remedy of the Administrator under this Agreement, cancel such amount of the DANIDA Grant as, in the Administrator's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the DANIDA Grant. Section 2.04. The Closing Date shall be September 30, 1994, or such later date as the Administrator shall establish. The Administrator shall promptly notify the Grantee of such later date. ARTICLE III Execution of the Project Section 3.01. Except as otherwise expressly provided herein, Article III and Schedules 2 and 3 to the Development Credit Agreement are hereby incorporated into this Agreement with the same force and effect as if they were fully set forth herein. All references to the Page 4 Association in said Articles shall be deemed to be references to the Administrator of the DANIDA Grant under this Agreement, all references to the Credit and the Credit Account shall be deemed to be references to the DANIDA Grant and the DANIDA Grant Account, respectively, and all references to the Borrower shall be deemed to be references to the Grantee. ARTICLE IV Effectiveness Section 4.01. This Agreement shall become effective as of the date first above written and shall continue in effect until the DANIDA Grant has been fully disbursed and the parties to this Agreement have fulfilled their obligations under this Agreement. Section 4.02. Pursuant to the provisions of the DANIDA Administration Arrangements, the Administrator shall cause its external auditors to audit and certify records and accounts in respect of the funds disbursed under this Agreement and to furnish DANIDA with a copy of the auditors' report. The cost of such audit shall be paid out of the DANIDA Grant. ARTICLE V Representation; Transfer of Rights and Obligations Section 5.01. The Minister of Finance and Economic Planning of the Recipient shall be the representative of the Grantee for the purposes of Section 11.03 of the General Conditions. Section 5.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Grantee: Ministry of Finance and Economic Planning P.O. Box 8147 Kampala, Uganda Cable address: Telex: FINSEC 61170 Kampala For the Administrator: 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) Facsimile: 197688 (TRT) Section 5.04. In accordance with the arrangements referred to in the Preamble to this Agreement, the rights and obligations of the Administrator under this Agreement Page 5 may be transferred to DANIDA. The Grantee accepts and agrees that, upon notice to that effect by the Administrator to the Grantee, DANIDA shall, ipso facto, from the date specified in such notice, be substituted in all rights and obligations of the Administrator under this Agreement as if DANIDA had been an original party to this Agreement, without any further action or formality required on the part of any party and, from such date, the Administrator shall cease to have any rights or obligations as a party under this Agreement. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, 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. THE REPUBLIC OF UGANDA By /s/ J. S. Mayanji Nkangi Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of Grant Funds provided by the DANISH INTERNATIONAL DEVELOPMENT AGENCY By /s/ Francis X. Colaco Acting Regional Vice President Africa