Somalia - Power Rehabilitation And Recovery Project : Credit 1850 - Project Agreement - Conformed

OFFICIAL DOCUMENTS CREDIT NUMBER 1850 SO Project Agreement (Power Rehabilitation and Energy Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and ENTE-NAZIONALE ENERGIA ELETTRICA (ENEE) Dated a /j , 1987 CREDIT NUMBER 1850 SO PROJECT AGREEMENT AGREEMENT, dated , 1 , 1987, btween INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and ENTE-NAZIONALE ENERGIA ELETTRICA (ENEE). WHEREAS (A) by the Development Credit Agreement of even date herewith between Somali Democratic Republic (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to nine million seven hundred thousand Special Drawing Rights (SDR 9,700,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that ENEE agree to undertake such obligations toward the Association as are set forth in this Agreement; (B) by a subsidiary loan agreement to be entered into between the Borrower and ENEE, the proceeds of the credit provided for under the Development Credit Agreement will be made available to ENEE on the terms and conditions set forth in said Subsidiary Loan Agreement; and WHEREAS ENEE, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Unless the context otherwise requires, the several terms defined in the Development Credit Agreement, the Preamble to this Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. ENEE declares its commitment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement and, to this end, shall carry out the Project with due diligence and efficiency and in conformity with appro- priate administrative, financial, engineering and environmental -2- practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the Project. Section 2.02. 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 1 to this Agreement. Section 2.03. ENEE shall carry out the obligations set forth in Sections 9.03 through 9.08 of the General Conditions (relating to insurance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition, respectively) in respect of the Project Agreement. Section 2.04. ENEE shall duly perform all its obligations under the Subsidiary Loan Agreement. Except as the Association shall otherwise agree, ENEE shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the Subsidiary Loan Agreement or any provision thereof. Section 2.05. (a) ENEE shall, at the request of the Associa- tion, exchange views with the Association with regard to the pro- gress of the Project, the performance of its obligations under this Agreement and under the Subsidiary Loan Agreement, and other matters relating to the purposes of the Credit. (b) ENEE shall promptly inform the Association of any condi- tion which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Credit, or the performance by ENEE of its obligations under this Agreement and under the Subsidiary Loan Agreement. ARTICLE III Management and Operations of ENEE Section 3.01. ENEE shall carry on its operations and conduct its affairs in accordance with sound administrative, financial, engineering and public utility practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. Section 3.02. ENEE shall at all times operate and maintain its plant, machinery, equipment and other property, and from time to time, promptly as needed, make all necessary repairs and -3- renewals thereof, all in accordance with sound engineering and financial practices. Section 3.03. ENEE shall take out and maintain with respon- sible insurers, or make other provision satisfactory to the Asso- ciation for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. ARTICLE IV Financial Covenants Section 4.01. (a) ENEE shall maintain records and accounts adequate to reflect in accordance with sound accounting practices, its operations and financial condition. (b) ENEE shall: (i) have its records, accounts and financial statements (balance sheets, statements of income and expenses and related statements) 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 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 Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, accounts and financial statements as well as the audit thereof, as the Association shall from time to time reasonably request. Section 4.02. (a) Except as the Association shall otherwise agree, ENEE shall not incur any debt unless a reasonable forecast of the revenues and expenditures of ENEE shows that the estimated net revenues of ENEE for each fiscal year during the term of the debt to be incurred shall be at least 1.5 times the estimated debt service requirements of ENEE in such year on all debt of ENEE including the debt to be incurred. -4- (b) For the purposes of this Section: (i) The term "debt" means any indebtedness of ENEE maturing by its term more than one year after the date on which it is originally incurred. (ii) Debt shall be deemed to be incurred: (A) under a loan contract or agreement or other instrument providing for such debt or for the modification of its terms of payment on the date of such contract, agreement or instrument; and (B) under a guarantee agreement, on the date the agreement providing for such guarantee has been entered into. (iii) the term "net revenues" means the difference between: (A) the sum of revenues from all sources related to operations and net non-operating income; and (B) the sum of all expenses related to operations including administration, adequate mainte- nance, taxes and payments in lieu of taxes, but excluding provision for depreciation, other non-cash operating charges and interest and other charges on debt. (iv) The term "net non-operating income" means the dif- ference between: (A) revenues from all sources other than those related to operations; and (B) expenses, including taxes and payments in lieu of taxes, incurred in the generation of reve- nues in (A) above. (v) The term "debt service requirements" means the aggregate amount of repayments (including sinking fund payments, if any) of, and interest and other charges on, debt. (vi) The term "reasonable forecast" means a forecast prepared by ENEE not earlier than twelve months prior to the incurrence of the debt in question, -5- which both the Association and ENEE accept as rea- sonable and as to which the Association has noti- fied ENEE of its acceptability, provided that no event has occurred since such notification which has, or may reasonably be expected in the future to have, a material adverse effect on the financial condition or future operating results of ENEE. (vii) Whenever, for the purposes of this Section, it shall be necessary to value, in terms of the currency of the Borrower, debt payable in another currency, such valuation shall be made on the basis of the prevailing lawful rate of exchange at which such other currency is, at the time of such valuation, obtainable for the purposes of servicing such debt, or, in the absence of such rate, on the basis of a rate of exchange acceptable to the Association. Section 4.03. (a) Except as the Association shall otherwise agree, ENEE shall produce, for each of its fiscal years after its fiscal year ending on December 31, 1987, funds from internal sources equivalent to not less than (i) 1% of the annual investment program for fiscal year 1988; (ii) 10% of the annual investment program for fiscal year 1989; (iii) 15% of the annual investment program for fiscal year 1990; (iv) 20% of the annual investment program for fiscal year 1991; and (v) 30% of the annual investment program for fiscal year 1992 and thereafter. (b) For the purposes of this Section, the term "annual investment program" means the annual tranche of the RIP as modified from time to time. Section 4.04. (a) Except as the Association shall otherwise agree, ENEE shall earn, for each of its fiscal years after its fiscal year ending on December 31, 1989, an annual return of not less than 8% of the average current net value of ENEE's fixed revalued assets in operation. (b) Before September 30 in each of its fiscal years, ENEE shall, on the basis of forecasts prepared by ENEE and satisfactory to the Association, review whether it would meet the requirements set forth in paragraph (a) in respect of such year and the next following fiscal year and shall furnish to the Association the results of such review upon its completion. -6- (c) If any such review shows that ENEE would not meet the requirements set forth in paragraph (a) for ENEE's fiscal years covered by such review, ENEE shall promptly take all necessary measures (including, without limitation, adjustments of the struc- ture or levels of its tariffs) in order to meet such requirements. (d) For the purposes of this Section: (i) The annual return shall be calculated by dividing ENEE's net operating income for the fiscal year in question by one half of the sum of the current net value of ENEE's fixed revalued assets in operation at the beginning and at the end of that fiscal year. (ii) The term "net operating income" means total operat- ing revenues less total operating expenses. (iii) The term "total operating revenues" means revenues from all sources related to operations. (iv) The term "total operating expenses" means all expenses related to operations, including admini- stration. adequate maintenance, taxes and payments in lieu of taxes, and provision for depreciation of the average current gross value of ENEE's fixed revalued assets in operation, or other basis acceptable to the Association, but excluding interest and other charges on debt. (v) The average current gross value of ENEE's fixed revalued assets in operation shall be calculated as one half of the sum of the gross value of ENEE's fixed revalued assets in operation at the beginning and at the end of the fiscal year, as valued from time to time in accordance with sound and consis- tently maintained methods of valuation satisfactory to the Association. (vi) The term "current net value of ENEE's fixed reva- lued assets in operation" means the gross value of ENEE's fixed revalued assets in operation less the -7- amount of accumulated depreciation, as valued from time to time in accordance with sound and con- sistently maintained methods of valuation satis- factory to the Association. Section 4.05. ENEE shall take all measures necessary to ensure that its accounts receivable on electricity sales and accounts payable on non-payroll cash operating expenditures are reduced to 120 days by December 31, 1988, and to 90 days for fiscal year 1989 and thereafter. Section 4.06. (a) ENEE shall, at the end of every Fiscal Year, review the RIP in consultation with the Association and revise it as necessary after obtaining the approval of the Association. (b) Until the completion of the Project, ENEE shall obtain the approval of the Association prior to making any changes and/or making additional investiment not contained in the RIP as agreed with the Association, if any, such new investment would be in excess of: (i) the value of one percent (1%) of ENEE's gross fixed revalued assets as defined in Section 4.04 of this Agreement; or (ii) the equivalent of $1 million, whichever is the smaller. Section 4.07. ENEE shall: (a) not later than December 31, 1988, submit to the Association for review its asset registry and asset revaluation manual; and (b) promptly thereafter carry out asset revaluation taking into account the Association's views. 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 Development Credit Agreement becomes effective. Section 5.02. (a) This Agreement and all obligations of the Association and of ENEE thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) the date 20 years after the date of this Agreement. -8- (b) If the Development Credit Agreement terminates in accor- dance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify ENEE of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. 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 desig- nated by notice to the party giving such notice or making such request. The addresses so specified are: 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) For ENEE: P.O. Box 1 Mogadishu, Somalia Telex: 630 ENEE-MOG -9- 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 ENEE, or by ENEE on behalf of the Borrower under the Development Credit Agreement, may be taken or executed by the General Manager of ENEE or such other person or persons as ENEE shall designate in writing, and ENEE shall furnish to the Association sufficient evidence of the authority and the authenti- cated 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 collec- tively 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 DEVELOPMENT ASSOCIATION By// 6Lc '. Regional Vice President Africa ENTE-NAZIONALE ENERGIA ELETTRICA ByAuthrize Represen Authorized Representative - 10 - SCHEDULE 1 Procurement and Consultants' Services Section I: Procurement of Goods Part A: International Competitive Bidding Exce?t as provided in Part C hereof, power station units, auxiliary plant replacement parts and non-proprietory spare parts shall be procured under contracts awarded in accordance with pro- cedures consistent with those set forth in Sections I and Il of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1985 (the Guidelines). Part B: Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A.1 hereof, goods manufactured in Somalia 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 Contracts for spare parts for proprietary generation and transmission equipment may, with the prior approval of the Asso- ciation, be procured under contracts negotiated with the res- pective equipment manufacturers. Part D: Review by the Association of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: The procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply to all contracts for procurement. Where payments fpr 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. 2. The figure of 15% is hereby specified for purposes of para- graph 4 of Appendix 1 to the Guidelines. - 11 - Section II: Employment of Consultants In order to assist ENEE in carrying out the Project, ENEE shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Such consultants shall be selected in accordance with principles 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. - 13 - 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) Spare Parts 870,000 100% of foreign under Part A expenditures and of the Project 100% of local expenditures (ex- factory costs). (2) Power Station 1,210,000 100% of foreign Auxilliaries expenditures, and under Part A 100% of local of the Project expenditures (ex- factory costs). (3) Vehicles, Computers ) 100% of foreign and other office ) expenditures equipment under: ) (a) Part A of the 270,000 ) Project ) (b) Parts B.3, 45,000 ) C.1 and C.2 ) of the Project ) (c) Part B.4 of 45,000 ) the Project ) -14 - Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (4) Consultants' ) 100% of foreign services and ) expenditures studies for: ) (a) Parts B.1 3,860,000 ) and B.2 of ) the Project ) (b) Parts B.3, 740,000 ) B.4 and C of ) the Project ) (5) Training for: ) (a) ENEE 640,000 ) ) 100% (b) EPD 67,000 ) (c) NWP 23,000 ) (6) Refunding of 1,160,000 Amount due pur- Project Prepara- suant to Section tion Advances 2.02 (c) of this Agreement (7) Unallocated 770,000 TOTAL 9,700,000 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. - 15 - 3. Notwithstanding the provisions of paragraph 1 above, no with- drawals shall be made in respect of payments made for expenditures prior to the date of this Agreement. - 16 - SCHEDULE 2 Description of the Project The objective of the Project is to assist the Borrower: (a) improve the efficiency and reliability of power supply; (b) meet the demand for power in Mogadishu; (c) develop its capability in energy planning; and (d) promote energy conservation measures. 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: Power Generation and Transmission 1. (a) Rehabilitation and maintenance of power generation plants at the Gezira power station through the provision of one new power engine for a diesel generator, fire detection and prevention equipment and installation of a high intensity lighting scheme. (b) Rehabilitation and maintenance of power generation plants at Centrale through the provision of a fuel treatment plant, fire detection and prevention equipment. 2. Installation of about 10 MW of heavy fuel-oil burning diesel generation at the North sub-station, and a 15 MW heavy fuel-oil fired steam unit at Gezira. 3. (a) Improving the power transmission system through the: (i) provision of materials and construction of a 33 kV over-head and underground feeder network; (ii) provision of materials and con- struction of 33 kV and 33/15 kV sub-stations; and (iii) provision of materials for power extensions to existing switch yards. (b) Rehabilitation and maintenance of the 15 kV power system at Gezira through: (i) the provision of materials and the instal- lation of a new 15 kV reticulation system; and (ii) the provision of materials for supplying power to about 20,000 new consumer units and replacement and upgrading of power distribution system to about 5,000 consumer units. 4. Provision of vehicles and repair tools, a radio communication system, computers, accounting and billing machinery, and other power-related equipment to ENEE. 5. Provision of spare parts for power generation equipment and for vehicles.. - 17 - Part B: Technical Assistance 1. Improving ENEE's ability in Project management, procurement, engineering design, construction supervision and commissioning of the Project. 2. Strengthening ENEE's management through the provision of technical assistance to carry out line-management functions. 3. Strengthening EPD's ability to carry out energy planning and administration functions through the provision of technical assistance and logistical back-up resources. 4. Strengthening NWPs ability to carry out work on store design, testing, marketing and distribution through the provision of technical assistance and logistical back-up resources. Part C: Studies 1. Carrying out studies on petroleum procurement, refining, and marketing and on pricing of petroleum products; 2. Developing household energy supply and demand management strategies and power sub-sector investment analyses; and 3. Carrying out studies on wood fuel supplies and end-use. Part D: Training Local and overseas training for: (1) ENEE staff, (2) EPD staff and (3) NWP staff in various fields of energy planning. The Project is expected to be completed by December 31, 1991. - 18 - SCHEDULE 3 Special Account A 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (1), (2), (3)(a), (4)(a) and (5)(a) set forth in the table in para- graph 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 equiva- lent to $800,000 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 expenditures. All such deposits shall be withdrawn by the Associa- tion from the Credit Account under the respective eligible - 19 - 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 and other evidence as the Association shall reasonably request, show- ing that such payment was made for eligible expenditures. 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 by the Borrower directly from the Credit Account in accordance with the provisions of Article V of the General Condi- tions and 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 Part A of 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 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 into the Special Account as of the date of such notice 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 expenditure or in any amount not eligible pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence fur- nished pursuant to paragraph 4 of this Schedule, the Borrower shall, promptly upon notice from the Association, deposit into the - 20 - 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. - 21 - SCHEDULE 4 Special Account B 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (4)(b) and (5)(b) 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 equiva- lent to $100,000 to be withdrawn from the Credit Account and depo- sited 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 expenditures. All such deposits shall be withdrawn by the Asso- ciation from the Credit Account under the respective eligible - 22 - Categories, and in the respective equivalent amounts, as shall have been justifi.ed 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 and other evidence as the Association shall reasonably request, show- ing that such payment was made for eligible expenditures. 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 by the Borrower directly from the Credit Account in accordance with the provisions of Article V of the General Condi- tions and 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 Parts B, C and D of 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 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 into the Special Account as of the date of such notice 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 expenditure or in any amount not eligible pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence fur- nished pursuant to paragraph 4 of this Schedule, the Borrower shall, promptly upon notice from the Association, deposit into the - 23 - 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 foreL,:ing is a true copy of the original in the archives of the International Development Association. FOR SECRETARY