Conformed Copy - TF027048 - LGU Finance and Development - Japanese Grant Agreement

Page 1 July 15, 1997 Hon. Roberto De Ocampo Department of Finance Bangko Sentral ng Pilipinas Comples Manila Republic of the Philippines Re: Japanese Grant for the Preparation of the LGU Finance and Development Grant TF27048 Dear Sir: I am writing on behalf of the International Bank for Reconstruction and Development (the Bank) to indicate the Bank's agreement, as administrator of grant funds provided by Japan, to make a grant in an amount not exceeding nine hundred and seventy-four thousand one hundred dollars ($974,100) (the Grant) to the Republic of the Philippines (the Recipient). The Grant is made in response to the Recipient's request for financial assistance and for the purposes and on the terms and conditions set forth in the Annex to this Letter Agreement. The Recipient represents, by confirming its agreement below, that it is authorized to contract and withdraw the Grant for the said purposes and on the said terms and conditions. Please confirm your agreement with the foregoing, on behalf of the Recipient, by signing, dating, and returning to us the enclosed copy of this Letter Agreement. Upon receipt by the Bank of the copy of this Letter Agreement countersigned by you, this Letter Agreement will become effective as of the date of the countersignature. Very truly yours, INTERNATIONAL BANK FOR RE NSTRUCTION AND DEVELOPMENT By /s/ Vinay Bhargava Acting Country Director, Philippines East Asia and Pacific Region AGREED: REPUBLIC OF THE PHILIPPINES By /s/ Cecilia G. Sonano Undersecretary Date: July 16, 1997 ANNEX Purposes, Terms, and Conditions of the Grant 1. Purposes and Activities . 1.1. The activities (the Activities) for which the Grant is given are as follows: (a) to identify and initially evaluate a pipeline of subprojects for the rehabilitation, improvement or expansion of urban infrastructure and social and environmental services that eligible Local Government Units (LGUs) could submit to the Municipal Development Fund (MDF) for possible financing; (b) to design a technical assistance program for the strengthening of the policies, operating procedures and administrative and technical capacity of the MDF; (c) to design a program of technical assistance to enhance LGU financial Page 2 monitoring through assistance with accounting, financial reporting, and fiscal performance standards development; (d) to facilitate workshops and develop. training modules and materials for use in training national and local officials in the administration and provision of urban infrastructure and social and environmental services; and (e) to design technical advisory services for LGUs to assist in expanding private sector participation in infrastructure services, enhancing local revenues (such as taxes, user fees, debt mobilization, etc.), controlling expenditures, and physical and development planning. 2. Implementation Generally 2.1. The Recipient shall: (a) carry out the Activities with due diligence and efficiency; (b) promptly provide the funds, facilities, services and other resources required for that purpose; (c) furnish all information covering the Activities and the use of the proceeds of the Grant as the Bank shall reasonably request; (d) from time to time exchange views with the Bank's representatives on the progress and results of the Activities; and (e) take all necessary measures required to enable the Bank to visit the territory of the Recipient for purposes related to the Grant. Without limitation on the foregoing, the Recipient shall, if the Bank shall so request, prepare and furnish to the Bank promptly upon completion of the Activities a report, in form and substance satisfactory to the Bank, on the results and impact of the Activities. 3. Procurement 3.1. Except as the Bank shall otherwise agree, procurement of the consultants' services required for the carrying out of the Activities and to be financed out of the proceeds of the Grant shall be governed by the provisions of Attachment I to this Annex. 4. Withdrawal of Grant Proceeds 4.1. The amount of the Grant shall be credited to an account opened by the Bank on its books in the name of the Recipient (the Grant Account), and may be withdrawn therefrom by the Recipient in accordance with the provisions of this Section 4, for expenditures in respect of the reasonable cost of services required for the Activities and to be financed out of the proceeds of the Grant. 4.2. The expenditures for the following items may be financed out of the proceeds of the Grant and shall be used exclusively in the carrying out of the Activities: Amount of the Grant Allocated % of (in United States Expenditures Item Dollars) be Financed (1) Consultants