Conformed Copy - C2697 - Rehabilitation Credit - Dutch Grant Agreement TF020347

Page 1 CONFORMED COPY TF020347 DUTCH GRANT RELATED TO CREDIT NUMBER 2697 GE Dutch Grant Agreement (Rehabilitation Project) between REPUBLIC OF GEORGIA and INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of Dutch Funds provided by the MINISTER FOR DEVELOPMENT COOPERATION OF THE NETHERLANDS Dated June 23, 1995 TF020347 DUTCH GRANT RELATED TO CREDIT NUMBER 2697 GE DUTCH GRANT AGREEMENT AGREEMENT, dated June 23, 1995 between REPUBLIC OF GEORGIA (the Recipient) and INTERNATIONAL DEVELOPMENT ASSOCIATION acting as Administrator (the Administrator) of the Dutch Grant (as hereinafter defined) provided by the Minister for Development Cooperation of the Netherlands (the Minister). WHEREAS the Recipient has requested the assistance of the International Development Association (the Association) and the Minister in the financing of urgently needed imports required during the execution of its program of actions, objectives and policies designed to achieve economic stabilization and economic reforms in the Recipient's economy described in a letter from the Recipient to the Association, dated February 17, 1995; WHEREAS the Association has made a credit for this purpose on the terms and conditions set forth in a Development Credit Agreement (Credit No. 2697 GE) of even date herewith between the Recipient and the Association (the Credit Agreement); Page 2 WHEREAS the Minister wishes to make available to the Recipient a grant in the amount of five million Dutch guilders (Dfls 5,000,000) (the Dutch Grant) to assist the Recipient in the financing of urgently needed imports and on the terms and conditions hereinafter set forth; WHEREAS pursuant to the General Arrangement for Administration, entered into between the Minister, the International Bank for Reconstruction and Development (the Bank) and the Association, dated May 24, 1995 (the Arrangements), and the Arrangement between the Minister, the Bank and the Association, dated June 15, 1995, the Minister has appointed the Bank and the Association, and the Bank and the Association have agreed, to administer grant funds to be made available by the Minister for the financing of imports eligible for financing under Credit No. 2697 GE, as the case may be, in accordance with the provisions of the Arrangements and has authorized the Bank and the Association to do all such acts and things as may be necessary or appropriate to carry out such administration, including entering into this Grant Agreement on behalf of the Minister; and WHEREAS the Recipient acknowledges that the financial assistance extended to the Recipient under this agreement (the Dutch Grant Agreement) shall be considered part of the bilateral development aid extended by the Government of the Netherlands to the Recipient; 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", whenever used in the General Conditions, means the International Development Association acting as Administrator of the Dutch Grant pursuant to the Arrangements, 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", whenever used in the General Conditions, means this Agreement; (c) the term "Credit", whenever used in the General Conditions, means the Dutch Grant extended to the Recipient under this Agreement; (d) the term "Credit Account", whenever used in the General Conditions, means the Dutch Grant Account opened by the Administrator on its books, in the name of the Grantee, to which the amount of the Dutch Grant is credited; (e) Section 2.01, paragraph 9, shall be modified to read: "the term 'Project' means the goods that may be financed out of the proceeds of the Dutch Grant pursuant to the provisions of the Schedule to the Dutch Grant Agreement."; (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: Page 3 "(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, the performance by the Grantee and the Administrator of their respective obligations under the Dutch Grant Agreement and the accomplishment of the purposes of the Dutch Grant"; and (h) Sections 3.02, 3.03, 3.04, 3.05, 4.01, 4.02, 4.03, 4.06, 6.05, 7.01, 8.01 (a), 12.02 and 12.05 are deleted. Section 1.02. Wherever used in this Agreement, 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 terms "Dutch guilders" and "Dfls" mean the currency of the Netherlands. ARTICLE II The Grant Section 2.01. The Administrator agrees to make available to the Recipient, on the terms and conditions set forth or referred to in this Agreement, a grant in an amount of five million Dutch guilders (Dfls 5,000,000). Section 2.02. The amount of the Dutch Grant may be withdrawn from the Dutch Grant Account in accordance with the provisions of the Schedule to this Agreement, as such Schedule may be amended from time to time by agreement between the Recipient and the Administrator, for expenditures made (or, if the Administrator shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the Dutch Grant. Section 2.03. (a) Except as the Administrator shall otherwise agree, goods required for the Project and to be financed out of the Dutch Grant shall be procured in accordance with the provisions of Schedule 2 to the Credit Agreement. (b) If the Administrator shall have reasonably determined that the procurement of any items is inconsistent with the procedures set forth or referred to in paragraph (a) above, no expenditures for such item shall be financed out of the proceeds of the Dutch Grant, and the Administrator may, without in any way restricting or limiting any other right, power or remedy of the Administrator under this Agreement, by notice to the Recipient, cancel such amount of the Dutch 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 Dutch Grant. Section 2.04. The Closing Date shall be June 30, 1996 or such later date as the Administrator shall establish. The Administrator shall promptly notify the Recipient of such later date. ARTICLE III Execution of the Project Section 3.O1. (a) Except as otherwise expressly provided herein, Articles III and IV of the Development Credit Agreement, including the Schedules referred to therein, are hereby incorporated into this Agreement with the same force and effect as if they were fully set forth herein, it being understood that all references in said Articles to the "Association" shall be deemed to be references to the Page 4 Association as Administrator of the Dutch Grant under this Agreement, all references to the "Borrower" shall be deemed to be references to the Recipient, and all references to the "Credit" and the "Credit Account" shall be deemed to be references to the Dutch Grant and the Dutch Grant Account, respectively. (b) All references in the Development Credit Agreement to the Special Account do not apply to, and do not constitute a part of, this Agreement. ARTICLE IV Transfer of Rights and Obligations Section 4.01. In accordance with the Arrangements, the rights and obligations of the Administrator under this Agreement may be transferred to the Minister. The Recipient accepts and agrees that, upon notice by the Administrator to the Recipient to that effect, the Minister 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 the Minister had been an original party to this Agreement, without any further action or formality being 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. ARTICLE V Effectiveness Section 5.01. This Agreement shall become effective as of the date first above written and shall continue in effect until the Dutch Grant has been fully disbursed and the parties to this Agreement have fulfilled their obligations hereunder. ARTICLE VI Representation Section 6.01. The Minister of Finance of the Recipient is designated as representative of the Recipient for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Recipient: Vice-Prime Minister Ingorokva Str. 7 380034 Tbilisi Republic of Georgia Telex: 212917 ERG SU 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) Page 5 Washington, D.C. 248423 (RCA) 64145 (WUI) or 82987 (FTCC) 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. REPUBLIC OF GEORGIA By /s/ Temur Basilia Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of Dutch Funds Provided by the MINISTER FOR DEVELOPMENT COOPERATION OF THE NETHERLANDS By /s/ Wilfried Thalwitz Regional Vice President Europe and Central Asia SCHEDULE Withdrawal of the Dutch Grant 1. Subject to the provisions set forth or referred to in this Schedule, the proceeds of the Dutch Grant may be withdrawn from the Dutch Grant Account for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods required during the execution of the Program and to be financed out of such proceeds. 2. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) expenditures for goods included in the following SITC groups or subgroups, or any successor groups or subgroups under future revisions to the SITC, as designated by the Association by notice to the Borrower: Group Subgroup Description of Items 112 -- Alcoholic beverages 121 -- Tobacco, unmanufactured, tobacco refuse 122 -- Tobacco, manufactured (whether or not containing tobacco substitutes) 525 -- Radioactive and associated materials 667 -- Pearls, precious and semi- precious stones, unworked or worked Page 6 718 718.7 Nuclear reactors, and parts thereof, fuel elements (cartridges), non-irradiated for nuclear reactors 728 728.43 Tobacco processing machinery Group Subgroup Description of Items 897 897.3 Jewelry of gold, silver or platinum group metals (except watches and watch cases) and goldsmiths' or silversmiths' wares (including set gems) 971 -- Gold, nonmonetary (excluding gold ores and concentrates) (b) expenditures in the currency of the Borrower or for goods supplied from the territory of the Borrower, excluding, if the currency of the Borrower is also that of another country, expenditures in such currency for goods supplied from the territory of such other country; (c) payments made for expenditures prior to the date of this Agreement; (d) expenditures for goods procured under contracts costing less than $5,000 equivalent; (e) expenditures for goods supplied under a contract which any national or international financing institution or agency other than the Association shall have financed or agreed to finance; and (f) expenditures for goods intended for a military or paramilitary purpose or for luxury consumption. 3. Withdrawals for expenditures under contracts for the procurement of goods estimated to cost less than $500,000 may be required by the Association upon the basis of statements of expenditure under such terms and conditions as the Association shall specify.