China - Freshwater Fisheries Project : Credit 1689 - Credit Agreement - Conformed

OFFICIAL c IT NUMBER 1689 CHA DOCUMENTS Development Credit Agreement (Freshwater Fisheries Project) between PEOPLE' S REPUBLIC OF CHINA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1986 CREDIT NUMBER 1689 CHA DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated !eFx(Ae r , 1986, between the PEOPLE'S REPUBLIC OF CHINA (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS the Borrower, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Association to assist in the financing of the Project; and WHEREAS the Association has agreed, on the basis, inter alia, of the foregoing, to extend the Credit to the Borrower upon the terms and conditions set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Develop- ment Credit Agreements" of the Association, dated January 1, 1985, with the last sentence of Section 3.02 deleted (the General Conditions) constitute an integral part of this Agreement. Section 1.02. 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 following additional terms have the following meanings: (a) "County FDCs" means county-owned or district-owned fisheries development corporations located within the Project Counties; (b) "FDCs" means the Municipal FDCs and the County FDCs; (c) "Fish Farm" means a collectively-owned or state-owned enterprise operating any of the ponds referred to in Part A of the Project; (d) "FPO" means the Fishery Project Office established within the Bureau of Aquatic Products of the MAAF; -2- (e) "MAAF" means the Ministry of Agriculture, Animal Husbandry and Fisheries of the Borrower; (f) "Municipal FDCs" means SAGF and the seven fisheries development corporations listed in the Annex to Schedule 2 of this Agreement, each of which includes any enterprise, company or other entity controlled by SAGF or each such corporation, as the case may be; (g) "Onlending and Project Implementation Agreements" means the agreements referred to in Section 3.01 (b) of this Agreement; (h) "Project Cities" means the municipalities and cities listed in the Annex to Schedule 2 of this Agreement; (i) "Project Counties" means counties and districts which are located within the Project Cities and where any of the ponds referred to in Part A of the Project or the support facilities referred to in Part B of the Project are located; (j) "Project Offices" means the municipal Project Offices or the county or district Project Offices established within the Project Cities or the Project Counties, respectively; (k) "SAGF" means the Shanghai Aquaculture General Farm, an entity in Shanghai or its successor; (1) "Shanghai" means the Municipality of Shanghai of the Borrower; (m) "Special Account" means the account referred to in Sec- tion 2.02 (b) of this Agreement. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Bor- rower, on the terms and canditions set forth or referred to in the Development Credit Agreement, an amount-in various currencies equivalent to fifty-two million Special Drawing Rights (SDR 52,000,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of -3- Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Asso- ciation, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Credit. (b) The Borrower shall, for the purposes of the Project, open and maintain in dollars a special account in a bank accept- able to the Association on terms and conditions satisfactory to the Association. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 5 to this Agreement. Section 2.03. The Closing Date shall be June 30, 1991 or such later date as the Association shall establish. The Associa- tion shall promptly notify the Borrower of such later date. Section 2.04. (a) The Borrower shall pay to the Association a commitment charge at the rate of one-half of one percent (1/2 of 1%) per annum on the principal amount of the Credit not with- drawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Development Credit Agree- ment to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or shall be cancelled. (b) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without restrictions of any kind imposed by, or.in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one percent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Commitment charges and service charges shall be payable semiannually on March 15 and September 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each March 15 -4- and September 15 commencing Septembzr 15, 1996, and ending March 15, 2036. Each installment to and including the installment payable on March 15, 2006 shall be one-half of one percent (1/2 of 1%) of such principal amount, and each installment thereafter shall be one and one-half percent (1-1/2%) of such principal amount. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower declares its commitment to the objective of the Project as set forth in Schedule 2 to this Agreement, and, to this end, shall carry out the Project through MAAF and the Project Cities with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and fishery prictices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) For the purposes of the Project, the Borrower shall enter into onlending and project implementation agreements with each of the Project Cities, respectively, upon terms and condi- tions acceptable to the Association, which shall include, inter alia, those arrangements specified in 4Schedule 4 to this Agreement. (c) The Borrower shall exercise its righ s under the Onlending and Project Implementation Agreements in such manner as to protect the interests of the Borrower and the Association and to accomplish the purposes of the Credit, and except as the Association shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive any of the Onlending and Project Imple- mentation Agreements or any provision thereof. Section 3.02. Except as the Association shall otherwise agree, procurement of the goods, works and consultants' services required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to this Agreement. -5- Section 3.03. In order to assist the Project Cities in carrying out the Project, the Borrower shall maintain the FPO with competent staff in adequate numbers and with functions and responsibilities acceptable to the Association. Section 3.04. Without any limitation or restriction to any of its other obligations under this Agreement, the Borrower shall make necessary arrangements acceptable to the Association for the Provinces of Heilongjiang, Jiangxi and Sichuan to provide the required funds to the cities of Harbin, Nanchang and Chengdu, respectively, for the purposes of the Project. Section 3.05. The Borrower shall carry out the training and study tours under Part E of the Project in accordance with a program acceptable to the Association. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof, including the Project Cities. (b) The Borrower shall: (i) have the accounts referred to in paragraph (a) of this Section including the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association, as soon as available, but in any case not later than six months after the end of each such year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning the said accounts and the audit thereof -6- and said records as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragrr.h (a) of this Section, separate records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association's representatives to examine such records; and (iv) ensure that such separate accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report thereof contains, in respect of such separate accounts, a separate opinion by said auditors as to whether the proceeds of the Credit withdrawn in respect of such expenditures were used for the purposes for which they were provided. ARTICLE V Remedies of the Association Section 5.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional event is specified, namely, that any of the parties to the Onlending and Project Implementa- tion Agreements shall have failed to perform any of its obliga- tions under the Onlending and Project Implementation Agreements. Section 5.02. Pursuant to Section 7.01 (d) of the General Conditions, the following additional event is specified, namely, that the event specified in Section 5.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower. - 7 - ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as addi- tional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) that the Borrower's State Council has approved the Development Credit Agreement; (b) that the seven Onlending and Project Implementation Agreements have been executed on behalf of the Borrower and each of the Project Cities listed in items (1) through (7) of the Annex to Schedule 2 of this Agreement, respectively; and (c) that a corporate charter, as approved by the competent city Administration of Industry and Commerce, of each of the corporations listed in items (1) through (7) of the Annex to Schedule 2 of thic Agreement has been delivered to the Associa- tion. Section 6.02. The following is specified as an additional matter, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association, namely, that the Onlending and Project Implementation Agreements referred to in paragraph (b) of Section 6.01 of this Agreement have been duly authorized or rati- fied by the Borrower and each of the seven Project Cities and are legally binding upon the Borrower and each of the seven Project Cities in accordance with their terms, respectively. Section 6.03. The date ninety (90) days after the date of this Agreement is hereby specified for the purposes of Sec- tion 12.04 of the General Conditions. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. -8- Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministry of Finance Sanlihe Beijing People's Republic of China Cable address: Telex: FINANMIN 22486 MFPRC CN Beijing For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) -9- 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. PEOPLE'S REPUBLIC OF CHINA By 15\ - n Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By 16) A+tA4 Regional Vice President East Asia and Pacific - 10 - SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Earthworks under 17,920,000 30% Part A of the Project (2) Equipment, materials and vehicles (a) Construction 6,240,000 ) 100% of foreign materials ) expenditures, under Parts A ) 100% of local and B of the ) expenditures Project ) (ex-factory ) cost) and 75% ) of local ex- ) penditures for ) other items pro- ) cured locally (b) Equipment 2,870,000 ) under Part B ) (a) of the ) Project ) (c) Construction 19,390,000 ) equipment ) and vehicles ) under Part C ) of the ) Project ) - 11 - Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (d) Production 2,350,000) equipment and ) materials under ) Parts D (a) ) and D (b) (i) ) of the Project ) (3) Training and 620,000 100% of foreign consultants' expenditures services (4) Unallocated 2,610,000 TOTAL 52,000,000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall ,e made: (a) in respect of payments made for expenditures prior to the date of this Agreement; and (b) in respect of expenditures relating to such part of the Project as shall be carried out through Shanghai, unless and until the Association has received: - 12 - (i) evidence satisfactory to the Association that the Onlending and Project Implementation Agreement between the Borrower and Shanghai has been exe- cuted on behalf of the Borrower and Shanghai; (ii) documentary evidence satisfactory to the Associa- tion that SAGF has power and authority to engage in all the activities necessary to carry out its part of Part B of the Project; and (iii) a legal opinion satisfactory to the Association, of counsel acceptable to the Association that the Onlending and Project Implementation Agreement between the Borrower and Shanghai has been duly authorized or ratified by the Borrower and Shanghai and is legally binding upon the Borrower and Shanghai in accordance with its terms, and that SAGF has power and authority to engage in all the activities necessary to carry out its part of Part B of the Project. - 13 - SCHEDULE 2 Description of the Project The objective of the Project is to develop freshwater fish culture in the Project Cities by improving existing ponds and constructing new ponds, providing techniques and equipment for pond management and strengthening the support facilities for production and marketing of fish. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Association may agree upon from time to time to achieve such objective: Part A: Pond Development In the Project Cities, establishment of about 11,100 ha of new ponds and improvement of about 6,100 ha of existing ponds, including provision of water supply, drainage, power supply, farm roads, buildings, pond lining, flood protection and slope protection. Part B: Support Facilities Construction and equipping of support facilities for the FDCs, including: (a) about 14 feed mills, about 4 cold storage plants and about 6 technical service centers; and (b) about 7 trade centers and about 10 other support facilities such as tilapia overwintering facilities, vaccine factories and hatcheries. Part C: Construction Equipment and Vehicles Provision of construction equipment to the FDCs and about 2,085 vehicles to the FDCs, the Fish Farms and the Project Offices for the purposes of Parts A and B above. Part D: Production Equipment and Materials Provision to the Fish Farms of: (a) production equipment; and (b) production materials including: (i) fertilizers, fish meal and vitamins; and (ii) fingerlings. - 14 - Part E: Training and Technical Assistance Provision of local and overseas training and study tours for staff from MAAF, Project Cities and Project Counties and consul- tants' services to assist in conducting local training programs and fishery research. The Project is expected to be completed by December 31, 1990. - 15 - Annex to Schedule 2 Fisheries Project Cities Development Corporations 1. Chengdu in Sichuan Province Chengdu Aquatic Products Cultivation Corporation 2. Chongqing in Sichuan Province Chongqing Aquatic Products Cultivation Corporation 3. Hangzhou in Zhejiang Province Hangzhou Aquatic Products Cultivation Corporation 4. Harbin in Heilongjiang Province Harbin Fisheries Development Corporation 5. Nanchang in Jiangxi Province Nanchang Aquatic Products Development Corporation 6. Shenyang in Liaoning Province Shenyang Aquatic Products General Corporation 7. Municipality of Beijing Beijing Freshwater Fishery Corporation 8. Municipality of Shanghai - 16 - SCHEDULE 3 Procurement and Consultants' Services Section I. Procurement of Goods and Works Part A: International Competitive Bidding 1. Except as provided in Part C hereof, goods shall be procured under contracts awarded in accordance with procedures consistent with those set forth in Sections I and II of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1985 (the Guidelines). 2. To the extent practicable, contracts for goods to be procured on the basis of international competitive bidding shall be grouped in bid packages estimated to cost the equivalent of $5,000,000 or more each. Part B: Preference for Domestic Manufacturers In the procurement of goods in accordance with the proce- dures described in Part A.1 hereof, goods manufactured in China may be granted a margin pf preference in accordance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraphs I through 4 of Appendix 2 thereto. Part C: Other Procurement Procedures 1. Earthworks under Part A of the Project may be procured by force account or other procedures acceptable to the Association. 2. Laboratory and audio-visual equipment for the technical service centers, the vaccine factory and the hatchery under Part B of the Project and production materials and production equipment under Part D of the Project, may be procured under contracts awarded on the basis of comparison of price quotations solicited from a list of at least three suppliers eligible under the Guidelines, in accordance with procedures acceptable to the Association. Part D: Review by the Association of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: - 17 - (a) With respect to each contract for goods estimated to cost the equivalent of $200,000 or more, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract required to be furnished to the Association pursuant to said paragraph 2 (d) shall be furnished to the Association prior to the making of the first payment out of the Special Account in respect of such contract. (b) With respect to each contract not governed by the pre- ceding paragraph, the procedures set forth in paragraphs 3 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract together with the other information required to be furnished to the Association pursuant to said paragraph 3 shall be furnished to the Association as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 5 to this Agreement. (c) The provisions of the preceding subparagraphs (a) and (b) shall not apply to contracts on account of which the Associa- tion has authorized withdrawals from the Credit Account on the basis of statements of expenditure. Such contracts shall be retained in accordance with Section 4.01 (c) (ii) of this Agree- ment. 2. The figure of 15% is hereby specified for purposes of paragraph 4 of Appendix 1 to the Guidelines. Section II. Employment of Consultants In order to assist the Borrower and the Project Cities in carrying out Part E of the Project, the Borrower shall employ cotultants whose qualifications, experience and terms and condi- tions of employment shall be satisfactory to the Association. Such consultants sjhall be selected in accordance with principles and procedures sncisfactory to the Association on the basis of the "Guidelines for the Use of Consultants by World Bank Bor- rowers and by the World Bank as Executing Agency" published by the Bank in August 1981. - 18 - SCHEDULE 4 Onlending and Project Implementation Agreements Except as the Association shall otherwise agree, each On- lending and Project Implementation Agreement shall include, inter alia, the following arrangements: 1. The Project Cities shall carry out, or cause to be carried out, their respective parts of the Project with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and fishery practices. 2. The Borrower shall relend the proceeds of the Credit to each of the Project Cities for the purposes of its respective part of the Project under the following terms and conditions: Repayment period: 20 years including 5 years of grace Interest rate: fixed at 4.5% per annum Foreign exchange risk: to be borne by the Project Cities 3. The Project Cities shall make, or cause to be made, avail- able the funds to be obtained from the Borrower under paragraph 2 of this Schedule to FDCs, Project Counties and the Fish Farms for the purposes of the Project by extending sub-loans (hereinafter in this paragraph 3 referred to as the Sub-loans) to such FDCs, Project Cities and Fish Farms upon the following terms and conditions: Interest rates: (i) with respect to any Sub-loans for the purposes of the trade centers and technical service centers for the FDCs under Part B of the Project, fixed at 4.5% per annum (ii) with respect to any Sub-loans for the purposes other than those referred to in (i) above, rates acceptable to the Association - 19 - Repayment periods: to be determined by criteria accept- able to the Association 4. Without limitation to paragraph 3 of this Schedule, the Project Cities shall provide, or cause to be provided, promptly as needed, all the necessary funds, facilities and resources required for the carrying out of their respective parts of the Project and in accordance with the schedules and procedures agreed between the Project Cities and the Borrower. 5. The Project Cities shall ensure that each FDC be operated in accordance with FDC operation guidelines acceptable to the Association. 6. Each of the Project Cities shall promptly inform MAAF of any amendments to the corporate charter of the Municipal FDC located within such Project City. 7. In order to facilitate the implementation of the Project, each of the Project Cities shall: (i) maintain its Project Office within its fisheries agency, with competent staff in adequate numbers; and (ii) cause each of the Project Counties located within such Project City to maintain its Project Office within its fisheries agency with competent staff in adequate numbers. 8. Each of the Project Cities shall properly install, operate and maintain, or cause to be installed, operated and maintained, any equipment procured under the Project. 9. MAAF shall be responsible for overall supervision of the implementation of the Project and shall assist the Project Cities in performing their obligations under the Project Implementation Agreement. 10. Each of the Project Cities shall furnish semi-annually to MAAF progress reports on its respective part of the Project, within two months of the end of each semester, in a format acceptable to MAAF. - 20 - SCHEDULE 5 Special Account 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (1), (2) and (3) set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (b) the term "eligible expenditures" means expenditures in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit allocated from time to time to the eligible Categories in accor- dance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorioed Allocation" means an amount equiv- alent to SDR 3,500,000 to be withdrawn from the Credit Account and deposited in the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Except as the Association shall otherwise agree, payments out of the Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Association has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Special Account may be made as follows: (a) On the basis of a request or requests by the Borrower for a deposit or deposits which add up to the aggregate amount of the Authorized Allocation, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit in the Special Account such amount or amounts as the Borrower shall have requested. (b) The Borrower shall furnish to the Association requests for replenishment of the Special Account at such intervals as the Association shall specify. On the basis of such requests, the Association shall withdraw from the Credit Account and deposit into the Special Account such amounts as shall be required to replenish the Special Account with amounts not exceeding the amount of payments made out of the Special Account for eligible - 21 - expenditures. All such deposits shall be withdrawn by the Asso- ciation from the Credit Account under the respective eligible Categories, and in the respective equivalent amounts, as shall have been justified by the evidence supporting the request for such deposit furnished pursuant to paragraph 4 of this Schedule. 4. For each payment made by the Borrower out of the Special Account for which the Borrower requests replenishment pursuant to paragraph 3 (b) of this Schedule, the Borrower shall furnish to the Association, prior to or at the time of such request, such documents and other evidence as the Association shall reasonably request, showing that such payment was made for eligible expen- ditures. 5. (a) Notwithstanding the provisions of paragraph 3 of this Schedule, no further deposit into the Special Account shall be made by the Association when either of the following situations first arises: (i) the Association shall have determined that all further withdrawals should be made directly by the Borrower from the Credit Account in accordance with the provisions of paragraph (a) of Section 2.02 of this Agreement; or (ii) the total unwithdrawn amount of the Credit allo- cated to the eligible Categories, minus the amount of any outstanding special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions with respect to the Project, shall be equal to the equivalent of twice the amount of the Authorized Allocation. (b) Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to the eligible Categories shall follow such procedures as the Association shall specify by notice to the Borrower. Such further withdrawals shall be made only after and to the extent that the Association shall have been satisfied that all such amounts remaining on deposit in the Special Account as of the date of such notice have been or will be utilized in making payments for eligible expenditures. 6. (a) If the Association shall have determined at any time that any payment out of the Special Account (i) was made for any - 22 - expenditure or in any amount not eligible pursuant to paragraph 2 of this Schedule, or (ii) was not justified by the evidence furnished pursuant to paragraph 4 of this Schedule, the Borrower shall, promptly upon notice from the Association deposit into the Special Account (or, if the Association shall so request, refund to the Association) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. No further deposit by the Association into the Special Account shall be made until the Borrower has made such deposit or refund. (b) If the Association shall have determined at any time that any amount outstanding in the Special Account will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount for crediting to the Credit Account. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Development Association. FOR SECRETARY