Zambia - Second Social Recovery Project : Credit 2755 - Agreement - 2 - Conformed

AGREEMENT RELATED TO CREDIT 2755-ZA Agreement between THE SWEDISH INTERNATIONAL COOPERATION AGENCY (Second Social Recovery Project - Zambia) and INTERNATIONAL DEVELOPMENT ASSOCIATION for the Administration of Certain Funds to be made available by THE SWEDISH INTERNATIONAL COOPERATION AGENCY Dated N out , 1995 AGREEMENT RELATED TO CREDIT NUMBER 2755-ZA AGREEMENT AGREEMENT, dated c , 1995, between the KINGDOM OF SWEDEN (herein after referred to as Sweden) and the INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter referred to as the Bank). WHEREAS Sweden and the Bank intend to cooperate in the financing of the Zambia Second Social Recovery Project/Participatory Assessment Group (hereinafter referred to as the Project) on the terms and conditions set forth in this Agreement; WHEREAS Sweden wishes to make available development aid funds for the cofiancing of the Project; WHEREAS Sweden further wishes to make available development aid funds to provide financing on a grant basis to the Project for such activities as are agreed between Sweden and the Bank as stated in the Staff Appraisal Report concerning the Second Zambia Social Recovery Project/Participatory Assessment Group; WHEREAS the Bank is prepared to accept such financing, including the administration of the development funds, on the terms and conditious hereinafter set forth; NOW THEREFORE the parties hereto have agreed as follows: ARTICLE I Definitions The term "Bank" shall mean the Association. ARTICLE I Component Authorities The Agreement pertains solely to financing provided by Sweden through the Swedish International Development Cooperation Agency (hereinafter referred to as SIDA), and in matters concerning the implementation of this Agreement, including any amendments hereto other than those which amend the principal objectives of this Agreement, SIDA shall be competent to represent Sweden. -2- ARTICLE III Scope of Agreement Section 3.1. The financing to be provided by Sweden pursuant to this Agreement may be for: The Participatory Assessment Group (PAG) as part of the Second Social Recovery Project (SRP2) in the Republic of Zambia. Section 3.2. The financing to be provided by Sweden pursuant to Section 3.1 of this Agreement shall be in the form of a grant to be administered by the Bank. Section 3.3. Sweden shall thereby make available a grant of FOUR MILLION ONE HUNDRED AND FIFTY THOUSAND SWEDISH KRONOR (SEK 4,150,000). ARTICLE IV Consultation Sweden and the Bank shall consult with each other from time to time on all matters arising out of this Agreemeat. Sweden and the Bank shall hold consultative meetings not less than once a year in order to promote a regular exchange of information. ARTICLE V Administration of Funds (a) The Bank shall, as administrator on behalf of Swedeu, enter into a grant Agreement with the Governmnt of Zambia regarding the provision of the development aid funds. The Bank shall be solely responsible for such administration and shall carry out such administration in accordance with its standard practices, with the same degree of care as it uses in the administration of its own loans and credits. A copy of the grant Agreemet shall be fumished to Sweden by the Bank. (b) Sweden shall, upon request frim the Bank deposit with the Bank the funds to be administered by the Bank pursuant to this Agreement. All such deposits shall be made in Swedish kronor to an account with the Sveriges Riksbank. (c) When making any such deposits, Sweden will notify Sveriges Riksbank to advise the Bank's Cash Management DepartmeDt as to the amount received, the name and number of the project or activity for which the deposit has been made, and the date of the deposit. In addition, Sweden shall fax a copy of its deposit instructions to Sveriges Riksbank to the Bank's Office of the Trust Funds -3- Administrator (fax no. [202]522-3397). The Bank shall advise Sweden of the receipt by the Bank of each such deposit. (d) Funds deposited pursuant to paragraph (b) above may be commingled with other trust fund assets but shall be kept separate and apart from the funds of the Bank. The Bank shall disburse, or arrange for the disbursement of, such funds to pay for goods or services eligible for payment and, for this purpose, the Bank may exchange such fluds for other currencies at the time of disbursement thereof (e) The Bank shall maintain separate records and ledger accounts in respect of the funds deposited by Sweden and disbursed by the Bank for the activities for which development aid funds are provided under this Agreement. (f) Within ninety days of each March 31, June 30, September 30 and December 31, the Bank shall prepare a financial statement with respect to the funds deposited by Sweden with the Bank pursuant to this Agreement and forward a copy to Sweden. Each such financial statement shall be expressed in the currency in which the funds are maintained by the Bank and shall show the allocation of such funds among the activities financed under this Agreement. The Bank shall provide Sweden annually with a management assertion together with an attestation from the Bank's extemal auditors on the satisfactory performance of the procedures and controls used by the Bank in administering the funds. The costs of such attestations shall be bome by the Bank. In addition, upon request from Sweden, the Bank shall cause the financial statements to be audited by the Bank's extemal auditors and shall forward a copy of the auditors' report to Sweden. The fnancial reporting and auditing of the activities financed by Sweden under this Agreement shall be canied out in accordance with the Bank's normal practices and standards. (g) In order to assist in the defrayment of the costs of administration and other expenses incurred by the Bank under this Agreement, the Bank may invest and reinvest the funds pending their disbursement. The Bank shall credit all income from such investment on a monthly basis to a separate investment income trust fund, which the Bank may also invest. Except as Sweden and the Bank may otherwise agree, the Bank may deduct from such investment income trust fund and retain for its own account an amount equal to two percent (2%) of the amount deposited by Sweden and such amounts as are required to reimburse the Bank for the cost of any Audits requested by Sweden under Section 5.1 (f) above. Following such deductions and except as may otherwise be agreed between the Bank and Sweden, the Bank shall pay to Sweden the balance of the funds in such investment income trust fund on an annual basis no later than September 1 of each year. Ifthe amount in such investment income trust fund in any year is less than the amount the Bank is entitled to retain under this Section, Sweden shall, upon request from the Bank, pay such remaining amount to the Bank. (h) The Bank shall exercise the same care in investing the funds as it does for its own accounts. (i) If, upon the completion or termination of the project, there remains an unused balance of such funds, the Bank shall credit such balance to a separate unused funds trust fund account mnd shall then pay Sweden the amounts, including all investment income thereon, in such trust fnd account -4- on an annual basis no later than September 1 of each year, except as may otherwise be agreed between Sweden and the Bank. ARTICLE VI Procurement Section 6.1. The development aid funds administered by the Bank shall be used to finance expenditures for goods and services, in accordance with the Banks "Guidelines for Procurements under IBRD Loans and IDA Credits" and the "Guidelines for the use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency", as in effect at the time of the grant. Section 6.2. The recruitment of the consultants and the administration and enforcement of all provisions of any agreement entered into between the Bank and such a consultant and/or a third party, shall be the responsibility solely of the Bank and shall be carried out in accordance with its applicable procedures. Sweden shall, at the request of the Bank, make available to the Bank, to the best of its ability, information concerning expertise available in Sweden in sectors which may be of interest to the Bank. Section 6.3. In all cases, the procedures used shall be such as not to discriminate against Swedish suppliers of goods or services so that such supplies shall have the same possibilities of providing goods or services to b. financed under this Agreement as other suppliers. ARTICLE VII Project Information and Supervision Section 7.1. The supervision of the activities which Sweden assists in financing pursuant to this Agreement shall be the responsibility solely of the Bank and shall be carried out by the Bank in accordance with the Bank's standard policies and procedures. Section 7.2. The Bank shall provide Sweden with information on the results of the activities upon completion of the Agreement. The Bank shall promptly inform Sweden of any event which, in the opinion of the Bank, interferes or threatens to interfere with the successful implementation of the Project. Section 7.3. The Bank shall provide Sweden with an annual report on the implementation of the Project. The report shall contain an assessment 01*the results of the PAG in relation to the annual workplan of the unit and of the results of the cooperation between the PAG and the Living Conditions Monitoring Unit Section 7.4. Representatives of Sweden shall be invited to participate in missions relating to the activities cofinanced by Sweden and the Bank under this Agreement, as the Bank, Sweden and the Government of Zambia may deem appropriate. The Bank shall keep Sweden informed of the findings of such missions and regularly provide Sweden with sumiaries of any supervision reports resulting from such missions. Section 7.5. The Bank shall promptly inform Sweden of any significant modification to the terms of the Agreement with respect to the Project, and of any contractual remedy that is exercised by -5- the Bank under the Agreement. To the extent practicable, the Bank shall afford Sweden a reasonable opportunity to exchange views before effecting any such modification or exercising any such contractual remedy. ARTICLE VII Effectiveness; Termination Section 8. 1. This Agreement shall enter into force on the date of its signature and shall remain valid until December 31, 1997, except as Sweden and the Bank may otherwise agree or unless earlier terminated by either party upon giving six months' prior written notice to that effect to the other party, provided that such termination shall not affect the rights and obligations of Sweden and the Bank under this Agreement. Prior to the date mentioned in the preceding sentence, Sweden and the Bank shall consult with each other in order to determine whether this Agreement shall terminate on such date or be extended for a further period. Section 8.2. Upon termination of this Agreement, unless the parties hereto agree on another course of action and except as otherwise provided on another course of action, any funds of Sweden held hereunder by the Bank shall be returned to Sweden and the Bank's functions pursuant hereto shall be considered terminated. Section 8.3. Subject to the foregoing, promptly after termination of this Agreement, the Bank shall fumish Sweden with a final report and a financial statement with respect to the funds. ARTICLE IX Communications Section 9.1. All written communication required or permitted by this Agreement shall be directed to the following addresses: For Sweden: Head of the Policy Department Swedish Intemational Development Cooperation Agency Birger Jarlsgatan 61, S-105 25 Stockholm, Sweden Fax: +46 8 612 49 80 For the Bank: Intemational Bank for Reconstruction and Development International Development Association Southem Africa Department 1818 H Street, N.W. Washington, D.C. 20433, USA Fax: +1 202 473-8239 -6- ARTICLE X Miscellaneous Section 10.1. This Agreement may be amended only by written agreement of the parties hereto. Section 10.2. The headings of the Articles and Sections in this Agreement are used for convenience only, and shall not be used in interpreting the provisions of this Agreement. Section 10.3. This Agreement is prepared in two counterparts, one for each party. 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. FOR THE KINGDOM OF SWEDEN By: (&u EdL reVOt) (Tite) Pd *~/7 e- O A4te r FOR THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT, INTERNATIONAL DEVELOPMENT ASSOCIATION By: &0f -k-c r Katherine Marshah, Director Southern Africa Department