Ghana - Health And Education Rehabilitation Project : Credit 1653 - Credit Agreement - Conformed

CREDIT NUMBER 1653 GH -0dNMiENTS Development Credit Agreement (Health and Education Rehabilitation Project) between REPUBLIC OF GHANA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated ' LA , 1986 CREDIT NUMBER 1653 GH DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated .AL0 -& , 1986, between REPUBLIC OF GHANA (the Borrower) and INTERNATIONAL DEVEL- OPMENT ASSOCIATION (the Association). WHEREAS (A) 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 (B) 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 Con- ditions) constitute an integral part of this Agreement. Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions have the res- pective meanings therein set forth and the following additional terms have the following meanings: (a) "MOH" means the Borrower's Ministry of Health; (b) "MOE" means the Borrower's Ministry of Education; (c) "MDPI" means the Borrower's Management Development and Productivity Institute; (d) "PMU" means a Project Management Unit to be established pursuant to Section 3.01 (c) of this Agreement; (e) "Special Accounts" means the accounts referred to in Section 2.02 (b) of this Agreement; (f) "Project Accounts" means the accounts referred to in Section 3.01 (b) of this Agreement; -2- (g) "Project Manager" means a Project Manager referred to in Section 3.01 (c) of, and Section II of Schedule 3 to, this Agreement; (h) "Project Accountant" means a Project Accountant referred to in Section 3.01 (c) of, and Section II of Schedule 3 to, this Agreement; (i) "Project Architect" means the Project Architect referred to in Section 3.01 (c) of, and Section II of Schedule 3 to, this Agreement; and (j) "Project Preparation Advance" means the project prepa- ration advance granted by the Association to the Borrower pursuant to an exchange of letters dated July 11, 1985 and September 6, 1985, between the Borrower and the Association. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Bor- rower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount in various currencies equivalent to thirteen million eight hundred thousand Special Drawing Rights (SDR 13,800,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of 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 Lhe 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 two special accounts in a commercial bank on terms and conditions satisfactory to the Association. One of the Special Accounts shall be for Part A of the Project and the other for Parts B and C of the Project. Deposits into, and payments out of, the Special Accounts shall be made in accordance with the provisions of Schedule 5 to this Agreement. -3- (c) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and pay to itself the amount required to repay the prin- cipal amount of the Project Preparation Advance withdrawn and outstanding as of such date and to pay all unpaid charges there- on. The unwithdrawn balance of the authorized amount of the Project Preparation Advance shall thereupon be cancelled. Section 2.03. The Closing Date shall be December 31, 1990 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 per cent (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 pulposes 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 per cent (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 June 15 and December 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each June 15 and December 15 commencing June 15, 1996, and ending December 15, 2035. Each installment to and including the installment payable on December 15, 2005 shall be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter shall be one and one-half per cent (1-1/2%) of such principal amount. -4- 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 Fxecution of the Project and Other Covenants Section 3.01. (a) The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement, and, to this end, shall carry out the Project through MOH (Part A), MOE (Part B) and MDPI (Part C) with due diligence and efficiency and in conformity with appropriate administrative, financial, public health, educational and management practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) The Borrower shall open and maintain in a commercial bank on terms and conditions satisfactory to the Association two project accounts, one for Part A of the Project and the other for Parts B and C of the Project. The Project Accounts shall be used exclusively for payment for goods and services required for the Project. (c) The Borrower: (i) shall establish and maintain in MOH and MOE two Project Management Units, each in a form and with functions and staffing satisfactory to the Association, and (ii) shall appoint and assign: (A) to each PMU a Project Manager and Project Accountant, and (B) to MOH's PMU the Project Architect. Further provisions relating to the PMUs are set out in Schedule 4 to this Agreement. 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. Section 3.03. The Borrower: (i) shall no later than March 31, 1987 (using the findings from ongoing studies included in Part A (9) of the Project) furnish to the Association a preli- minary long-term investment plan for the health sector including cost recovery measures satisfactory to the Association, and (ii) -5- shall no later than December 31, 1987 complete the studies included in Part A (9) of the Project and the long term invest- ment plan for the health sector. Section 3.04. The Borrower shall undertake a cost recovery program which will generate revenues equivalent to at least 15% of total recurrent expenditures of MOH in 1986, 1987 and 1988. Section 3.05. The Borrower: (i) shall review annually with the Association, (A) the investments made by the Borrower in the health sector during the 12 months immediately preceding the date of any such review, and (B) the investments proposed to be made by the Borrower in the health sector during the 12 months immedi- ately following any such review; and (ii) sLall, for the purposes of the said review, provide data and other information enabling the recurrent cost implications of the Borrower's investments in the health sector to be thoroughly considered and determined by the Borrower and the Association. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained separate records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project of MOH, MOE and MDPI and any other departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall: (i) have the accounts referred to in paragraph (a) of this Section including the Project Accounts and the Special Accounts 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 nine months after the end of each such year, a certified copy of the report of each 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 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 paragraph (a) of this Section, separate records and accounts reflecting such expenditures; (ii) retain, until at least one year after the comple- tion of the audit 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 pro- ceeds of the Credit withdrawn in respect of such expenditures were used for the purposes for which they were provided. ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the establishment of the PMUs; and (b) the appointment of the Project Managers, Project Accountants and the Project Architect. -7- Section 5.02, The date ninety (90) days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Provisional National Defence Council Secretary for Finance and Economic Planning of the Borrower is designated as representative of the Borrower 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 Borrower: The Provisional National Defence Council Secretary Ministry of Finance and Economic Planning P.O. Box M 40 Accra, Ghana Cable address: Telex: ECONOMICON 2205 MIFEP GH Accra 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) -8- 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. REPUBLIC OF GHANA By /s/4 0C OL0oo Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION Regional Vice President Western Africa -9- 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 a-location 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) Civil works: (a) Part A of the 740,000 ) Project ) ) 100% of foreign (b) Part B of the 95,000 ) expenditures and Project ) 75% of local ex- ) penditures (c) Part C of the 95,000 ) Project ) (2) Equipment, furni- ture, materials and vehicles and medical supplies: (a) Part A of the 4,880,000 ) Project ) 100% of foreign ) expenditures and (b) Part B of the 95,000 ) 95% of local ex- Project ) penditures (c) Part C of the 95,000 ) Project ) (3) Technical assis- tance and train- ing: - 10 - Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (a) Part A of the ) Project: ) (i) population 460,000 ) stu,ies and ) training ) 100% (ii) other items 1,565,000 ) (b) Part B of the 95,000 ) Project ) ) (c) Part C of the 50,000 ) Project ) (4) (a) Textbooks, 2,485,000 100% of foreign teachers' expenditures and guides and 90% of local ex- school sup- penditures plies under Part B of the Project (b) Journals, 550,000 100% of foreign periodicals expenditures and library books under Part B of the Project (5) Project Operat- ing Costs: (a) Part A of the 1,015,000 ) Project ) (b) Part B of the 95,000 ) 90% Project ) (c) Part C of the 45,000 ) Project ) - 11 - Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (6) Refunding of Project 930,000 Amount due Preparation Advance pursuant to Sec- tion 2.02 (c) of this Agreement (7) Unallocated: (a) Part A of the 430,000 Project (b) Part B of the 80,000 Project TOTAL 13,800,000 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; (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; and (c) the term "Project Operating Costs" means the operating costs defined in the Annex to this Schedule, said Annex being subject to modification by agreement between the Borrower and the Association. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made: (a) in respect of expenditures prior to the date of this Agreement; and (b) in respect of expenditures under Categories (1) (c), (2) (c), (3) (c) and (5) (c) in paragraph 1 above, unless MDPI has furnished to the Association a two-year work plan satisfac- tory to the Association. - 12 - ANNEX TO SCHEDULE 1 Project Operating Cost3 The term "Project Operating Costs" shall mean with respect to: (A) Part A of the Project: (i) the costs of operation and maintenance of vehicles including fuel and spare parts, (ii) salaries and wages of, and housing assistance for, the Project Manager, Project Acountant and other staff of PMU, (iii) travel and related allowances, (iv) costs of printing project related materials and costs of office supplies, and (v) sundry other costs as deter- mined by the Borrower and the Association; (B) Part B of the Project: (i) textbook distribution costs, (ii) costs of operation and maintenance of vehicles including fuel and spare parts, (iii) travel and related allowances of PMU staff and of other textbook distribution personnel, and (iv) sundry other costs as determined by the Borrower and the Association; and (C) Part C of the Project: (i) costs of operation and main- tenance of vehicles including fuel and spare parts, (ii) travel and related allowances of MDPI, and (iii) sundry other costs as determined by the Borrower and the Association. - 13 - SCHEDULE 2 Description of the Project The objectives of the Project are to: (i) assist the Bor- rower in preventing further deterioration in its health and edu- cation systems; (ii) strengthen the Management Development and Productivity Institute (MDPI); (iii) expand health, nutrition and family planning services in the urban and rural areas; and (iv) strengthen management and planning in MOH and MOE. 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 objectives: Part A: Health 1. Strengthening of primary health care delivery and extension of community health outreach activities to the villages and to satellite "clinics" in Accra and Kumasi including: (i) re-equipping of, and provision of essential supplies to, about 100 rural health stations, 7 urban health centers in Greater Accra and 4 urban health centers in Kumasi, and (ii) rehabilitation of 2 of the health centers in Kumasi. 2. Rehabilitating the Princess Marie Louise Hospital in Accra and the Child Welfare Center in Kumasi, including the provision of medical and technical equipment, furniture, supplies and vehicles. 3. Strengthening of MOH's district health management teams responsible for the training, support and supervision of health station personnel. 4. Improvement of MOH's program of training, health and nutrition education in the rural areas, including sup- port for weaning food production, water and sanitation surveys, and construction of latrines. 5. (a) Improvement of MOH's family planning program through the design and testing of a classification and referral system. - 14 - (b) Assessment, as necessary, of the impact of the Borrower's national population policy; and imple- mentation of supporting studies and workshops leading to a multisectoral plan for population, human resources and development planning. 6. Strengthening the UNICEF supported expanded immuniza- tion program, including the rehabilitation of the cold rooms at the Kotoka International Airport and at the Kumasi regional muadical stores and the installation of solar-powered refrigerators. 7. Supporting a program of improved nutrition surveillance and the establishment of benchmark indicators to aid in long-term monitoring of nutritional status. 8. Strengthening of MOH's ability to manage and execute primary health care programs through the provision of: (i) fellowships for MOH staff in planning, management and economics; (ii) short-term overseas observation training for MOH staff; and (iii) the installation of a new radio communications system covering MOH head- quarters, the medical stores, the 10 regional health offices, two teaching hospitals and the rural training school at Kintampo. 9. Supporting studies and planning through: (a) an analysis of health policies and studies on health manpower, health care financing (including cost recovery and insurance schemes) and the drug system; (b) an inventory of health delivery, training and storage facilities in MOH; (c) a design of prototype urban and rural health centers; and (d) preparation of a long-term investment plan for the health sector. 10. Financing of operating costs, such as equipment, sup- plies, consumables, drugs, raw materials and other essential items requiring foreign exchange. - 15 - Part B: Education 1. Printing and distribution of English, mathematics and science textbooks and teachers' guides for primary and middle schools. 2. Provision of basic instructional supplies (exercise books, pens and pencils) to cover needs of primary and middle school pupils for two years. 3. Provision of textbooks for libraries of second cycle institutions. 4. (a) Strengthening of MOE in the preparation and execu- tion of education projects. (b) Provision of basic equipment, supplies and train- ing to MOE's Departments of Planning and Statis- tics and of Supplies and to PMU; and minor repairs to MOE's regional and district textbook depots. (c) Provision of core journals, library books and periodicals for the universities. Part C: MDPI Strengthening of MDPI, including the expansion and improvement of its management training, consultancy and research services, office rehabilitation and provision of necessary office equipment and supplies and vehicles. The Project is expected to be completed by June 30, 1990. - 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 and works 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. Bidders for civil works shall be prequalified as described in paragraph 2.10 of the Guidelines. 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 Ghana may be granted a margin of preference in accordance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraphs 1 through 4 of Appendix 2 thereto. Part C: Other Procurement Procedures 1. (a) Works for the Child Welfare Center and the two urban health centers in Kumasi, construction materials for Part A of the Project and printing of teachers' handbooks for Part B of the Project may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with pro- cedures satisfactory to the Association. (b) Works for the Princess Marie Louise Hospital in Accra shall continue to be executed by the State Construction Corpora- tion of Ghana in accordance with procedures, and on terms and conditions, satisfactory to the Association. (c) Repairs to regional and district textbook depots and renovation of MDPI facilities may be carried out under contracts awarded on the basis of price quotations solicited from a list of at least three contractors eligible under the Guidelines, in accordance with procedures acceptable to the Association. - 17 - 2. (a) Instructional supplies for primary and middle schools (exercise books, pens, pencils etc.) may be procured through UNICEF in accordance with procedures satisfactory to the Asso- ciation. (b) Secondary school and university textbooks and publica- tions may be purchased directly from publishers of such textbooks and publications. 3. (a) Except as provided in Part C.1(a) hereof, goods for Part A of the Project estimated to cost an amount equivalent to $75,000 or less but $10,000 or more (up to an aggregate amount not exceeding an amount equivalent to $800,000) may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association. (b) Except as provided in Part C.2 hereof, goods for all Parts of the Project estimated to cost an amount equivalent to less than $10,000 (up to an aggregate amount not exceeding an amount equivalent to (i) $200,000 for Part A of the Project, (ii) $100,000 for Part B of the Project, and (iii) $100,000 for Part C of the Project) may be procured under contracts awarded on the basis of comparison of price quotations from at least three suppliers eligible under the Guidelines, in accordance with pro- cedures satisfactory to the Association. 4. Contracts satisfactory to the Assocation for the printing of textbooks and teachers' guides estimated to cost an amount equi- valent to $75,000 or less (up to an aggregate amount not exceed- ing an amount equivalent to $1,400,000) may be awarded on the basis of competitive bidding advertised locally in accordance with procedures, and a model bidding document, satisfactory to the Association. Part D: Review by the Association of Procurement Decisions 1. Review of prequalification: With respect to the prequalification of bidders as provided in Part A.2 hereof, the procedures set forth in paragraph 1 of Appendix 1 to the Guidelines shall apply. 2. Review of invitations to bid and of proposed awards and final contracts: - 18 - (a) With respect to each contract for civil works estimated to cost an amount equivalent to $500,000 or more and each contract for goods estimated to cost an amount equivalent to $200,000 or more, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for any such contract are to be made out of a Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract required to be furnished to the Associa- tion pursuant to paragraph 2 (d) of the said Appendix 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 subparagraph, the procedures set forth in paragraphs 3 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for any such contract are to be made out of a Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract together with the other information re- quired to be furnished to the As. ,iation pursuant to the said paragraph 3 shall be furnished to Lu 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. 3. The figure of 10% is hereby specified for purposes of para- graph 4 of Appendix 1 to the Guidelines. Section II. Employment of Consultants In order to assist the Borrower in carrying out the Project, the Borrower shall employ consultants (including the Project Managers and their assistants, the Project Accountants and the Project Architect) whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Associa- tion. Such consultants shall be selected in accordance with prin- ciples and procedures satisfactory to the Association on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. - 19 - SCHEDULE 4 Project Management Units A. Health 1. The PMU shall be attached to the office of the Director of Medical Services who shall have overall responsibility for the execution of Part A of the Project. PMU's functions shall include the monitoring of project costs, the keeping of project accounts, authorization of all project expenditures, administration of the contracts of both local and foreign project consultants, and the programming and management of overseas training. 2. PMU's staff shall include a Project Manager, a procurement officer, the Project Accountant, the Project Architect, a quan- tity surveyor and 3 secretaries. 3. The PMU shall have a technical subcommittee consisting of representatives of MOH, the Universities and the Manpower Divi- sion of the Ministry of Finance and Economic Planning. The tech- nical subcommittee shall be responsible for selection of candi- dates for training under Part A of the Project. 4. Meetings of the technical subcommittee shall be chaired by the Project Manager or, in his absence, such other person as members of the subcommittee shall determine. B. Education 1. The PMU shall be attached to the office of the Provisional National Defence Council Secretary of Education and shall be provided with adequate office equipment, vehicles, supplies and staff. 2. PMU's staff shall include a Project Manager, a Project Accountant and such other staff as shall be necessary for the efficient carrying out of the PMU's functions. - 20 - SCHEDULE 5 Special Accounts 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (1) through (5) 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 "Authorized Allocation" means an amount equi- valent to $1,000,000 to be withdrawn from the Credit Account and deposited in each of the two Special Accounts pursuant to para- graph 3 (a) of this Schedule. 2. Except as the Association shall otherwise agree, payments out of the Special Accounts shall be made exclusively for eligi- ble expenditures in accordance with the provisions of this Sche- dule. 3. After the Association has received evidence satisfactory to it that a 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 a 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 a 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 accor- dance 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, less 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 an amount equivalent to twice the amount of the Authorized Allocation. (b) Thereafter, withdrawal from tne Credit Account of the remaining unwithdrawn amount of the Credit allocated to the eli- gible 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 expendi- tures. 6. (a) If the Association shall have determined at any time that any payment out of a 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 qvidence fur- nished 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 a 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 Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the 3 A day of6 wa 198 L. FOR SECRETARY