Conformed Copy - TF028670 - Bwindi Impenetrable National Park and Mgahinga Gorilla National Park Conservation Project - Project Agreement

Page 1 CONFORMED COPY GET GRANT NUMBER 28670 UG Project Agreement (Bwindi Impenetrable National Park and Mgahinga Gorilla National Park Conservation Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT acting as Trustee of the Global Environment Trust Fund and MGAHINGA AND BWINDI IMPENETRABLE FOREST CONSERVATION TRUST Dated March 7, 1995 GET GRANT NUMBER 28670 UG PROJECT AGREEMENT AGREEMENT, dated March 7, 1995, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT acting as Trustee of Grant Funds provided by Participants of the Global Environment Facility into the Global Environment Trust Fund (GET) (the Trustee) and MGAHINGA AND BWINDI IMPENETRABLE FOREST CONSERVATION TRUST (MBIFCT). WHEREAS (A) by a GET Grant Agreement of even date herewith (the GET Grant Agreement) between the Republic of Uganda (the Recipient) and the Trustee, the Trustee has agreed to make available to the Recipient an amount in various currencies equivalent to two million nine hundred thousand Special Drawing Rights (SDR 2,900,000), on the terms and conditions set forth in the GET Grant Agreement, but only on condition that MBIFCT agree to undertake such obligations toward the Trustee as are set forth in this Agreement; WHEREAS (B) the proceeds of the GET Grant provided for under the GET Grant Agreement will be made available to MBIFCT; and WHEREAS MBIFCT, in consideration of the Trustee's entering into the GET Grant Agreement with the Recipient, has agreed to undertake the obligations set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Page 2 Definitions Section 1.01. Unless the context otherwise requires, the several terms defined in the GET Grant Agreement, the Preamble to this Agreement and the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. (a) MBIFCT declares its commitment to the objectives of the Project as set forth in Schedule 2 to the GET Grant Agreement, and, to this end, shall carry out the Project with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and social practices, consistent with the Trust Deed, Bye-laws, MOU, TAM and IPP with due regard to ecological and environmental factors, and shall provide, or cause to be provided, 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 and except as the Trustee and MBIFCT shall otherwise agree, MBIFCT shall carry out the Project in accor-dance with the Implementation Program set forth in Schedule 2 to this Agreement. Section 2.02. Except as the Trustee shall otherwise agree, procurement of the goods, works and consultants' services required for the Project and to be financed out of the funds provided by MBIFCT shall be governed by the provisions of Schedule 1 to this Agreement. Section 2.03. MBIFCT shall carry out the obliga-tions set forth in Sections 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09 of the General Conditions (relating to insurance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition, respectively). Section 2.04. (a) MBIFCT shall, at the request of the Trustee, exchange views with the Trustee with regard to progress of the Project, the performance of its obligations under this Agreement, the Trust Deed, Bye-laws, MOU, the Trust Administration Manual and other matters relating to the purposes of the GET Grant. (b) MBIFCT shall promptly inform the Trustee of any proposed change to the documents referred to in Section 2.04 (a) above and any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the GET Grant, the Trust Deed, the Bye-laws, the MOU, the Trust Administration Manual, or the performance by MBIFCT of its obligations under this Agreement. ARTICLE III Management and Operations of MBIFCT Section 3.01. MBIFCT shall carry on its operations and conduct its affairs in accordance with sound investment, administrative, financial, environmental, ecological and social practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. Section 3.02. MBIFCT shall take out and maintain with responsible insurers, or make other provision satisfactory to the Trustee for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. ARTICLE IV Financial Covenants Section 4.01. (a) MBIFCT shall maintain records and accounts adequate to reflect in accordance with sound accounting practices its operations and financial condition. (b) MBIFCT shall: (i) have its records, accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors Page 3 acceptable to the Trustee; (ii) furnish to the Trustee as soon as available, but in any case not later than four months after the end of each such year: (A) certified copies of its financial statements for such year as so audited, and (B) the report of such audit by said auditors of such scope and in such detail as the Trustee shall have reasonably requested including, inter alia, a thorough review of adherence to TAM; and (iii) furnish to the Trustee such other information concerning said records, accounts and financial statements as well as the audit thereof, as the Trustee shall from time to time reasonably request. (c) MBIFCT shall cause an audit of its first six months of operations to be prepared and furnished to the Trustee, in such detail as the Trustee shall have reasonably requested. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the GET Grant Agreement becomes effective. Section 5.02. This Agreement and all obligations of the Trustee and of MBIFCT thereunder shall terminate on the date on which the GET Grant Agreement shall terminate in accordance with its terms, and the Trustee shall promptly notify MBIFCT thereof. ARTICLE VI Miscellaneous Provisions Section 6.01. 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 by mail, telegram, cable, telex or radiogram 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 such notice or making such request. The addresses so specified are: For the Trustee: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 197688 (TRT), Washington, D.C. 248423 (RCA), 64145 (WUI) or 82987 (FTCC) For MBIFCT: Mgahinga and Bwindi Impenetrable Forest Conservation Trust P.O. Box 4241 Kampala, Uganda Cable address: Telex: MINTOUR 62218 Kampala TOURISM UG Page 4 Section 6.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of MBIFCT may be taken or executed by the Trust Administrator or such other person or persons as the Trust Administrator shall designate in writing, and MBIFCT shall furnish to the Trustee sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 6.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. 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. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT as Trustee of the Global Environment Trust Fund By /s/ Edward V.K. Jaycox Regional Vice President Africa MGAHINGA AND BWINDI IMPENETRABLE FOREST CONSERVATION TRUST By /s/ Paul Mukasa-Ssali Authorized Representative SCHEDULE 1 Procurement and Consultants' Services Procurement of goods works and services for subprojects to be carried out under the Project shall be procured under local proce- dures, acceptable to the Trustee, consistent with the Guidelines and the Trust Administration Manual. SCHEDULE 2 Implementation Program TMB 1. (a) TMB shall be responsible for the operations and management of MBIFCT and for the overall implementation of the Project with the assistance of TAU, LCSC and a TAC consisting of local technical specialists, to be appointed by TMB. (b) Without limitation upon the generality of the foregoing, TMB shall: (i) arrange for and oversee the investment of MBIFCT's capital; (ii) allocate the annual income based on proposals from UNP, researchers and community groups; (iii) implement the IPP; (iv) cause accounts to be prepared and audited; and (v) monitor and periodically furnish to the Recipient and the Trustee reports on the implementation of the Project and the accomplishment of its objectives. (c) TMB shall, unless otherwise agreed with the Trustee, meet at least quarterly to, inter alia, decide on the allocation of income accrued in the preceding quarter. (d) TMB shall promptly adopt an investment strategy and thereafter appoint an Page 5 assets manager, all satisfactory to the Trustee. 2. TMB shall, (a) for each year of Project implementation, cause comprehensive annual work plans for TAU and for the implementation of Parts B and C of the Project, including proposed allocations of funds, to be prepared and furnished to the Trustee for its review and comments. (b) TMB shall furnish to the Trustee, for its review and comments, MBIFCT's quarterly work plans, including proposed releases of funds in the ensuing quarter; (c) The Trustee's views on the work plans referred to in (a) and (b) above shall be duly incorporated in such plans prior to TMB's final approval thereof. 3. TMB shall take all measures necessary to ensure that by the expected completion date of the Project, the projected ratio of 2:1 in the use of MBIFCT's income for administrative costs versus Project implementation-related expenditures, shall be substantially reversed. LCSC 4. (a) LCSC, comprising representatives of major stakeholders including wardens-in-charge of BINP and MGNP, the field staff of NGOs active in the area and local communities, shall serve as the main liaison between TMB and the communities. (b) LCSC shall be authorized to approve subprojects to be financed under Part A of the Project not exceeding the equivalent of $1,000 per subproject; subprojects in excess of $1,000, shall be approved by TMB. (c) LCSC shall ensure that beneficiaries of subprojects to be financed under part A of the Project shall contribute matching funds in cash or in kind and undertake to take appropriate measures and make arrangements for accountability and the long-term sustainability of subprojects. TAC 5. TAC shall assist TMB in evaluating the ecological, economic, environmental and social soundness of proposed subprojects and may, if it deems it necessary, recommend the hiring of short-term experts to review the soundness of subprojects. TAU 6. TAU, shall be based in Kabale and consist of a Trust Administrator, a Deputy Trust Administrator, two Community Extension workers and support staff, all to be employed by, and to be answerable to, TMB and whose qualifications and terms and conditions of employment shall be satisfactory to the Trustee. TAU shall be responsible for: (a) community outreach in collaboration with NGOs and UNP extension staff; (b) receiving, vetting and submitting community proposals to TAC, LCSC and TMB; (c) ensuring the adequate participation of indigenous people in the Project area consistent with the IPP; (d) disbursing funds to recipient groups in accordance with disbursement procedures satisfactory to the Trustee, for goods, works and services procured in accordance with procedures consistent with the Guidelines and TAM; (e) maintaining financial records and accounts and furnishing reports to the Trustee; and (f) monitoring and evaluation of implementation of subprojects receiving MBIFCT support. 7. (a) MBIFCT shall conduct, not later than two years after the Effective Date of the Grant Agreement jointly with the Trustee, a midterm review of the Project. Without limitation upon the generality of the foregoing, the review shall, inter alia, cover an evaluation of asset management performance relative to projected financial objectives, progress towards reversing the 2:1 ratio of administration costs to Project implementation-related expenditures, administration procedures and costs, the adequacy of subproject selection criteria and implementation, effectiveness of community representation in LCSC and TMB, effectiveness of the monitoring and evaluation procedures, the implementation and management aspects of the Project, progress in the implementation of the IPP, progress made by the Project including reporting, accounting and audit performance, disbursement procedures and the overall sustainability of the Project. (b) Not later than ninety (90) days prior to the midterm review referred to in (a) above, MBIFCT shall furnish to the Trustee, for its comments, a report in such detail as the Trustee shall reasonably request, including an evaluation of the progress achieved in implementing the Project. Page 6 (c) MBIFCT shall, promptly thereafter, carry out the recommendations stemming from the aforementioned review.