Conformed Copy - C1844 - Economic Recovery Program - Agreement 1

Page 1 NORWEGIAN GRANT RELATED TO CREDIT NUMBER 1844 UG Agreement between GOVERNMENT OF THE KINGDOM OF NORWAY and INTERNATIONAL DEVELOPMENT ASSOCIATION for the Administration of Certain Funds to be made available by the GOVERNMENT OF THE KINGDOM OF NORWAY in conjunction with Special Program of Assistance for Low Income, Debt-Distressed Countries (The Republic of Uganda) Dated December 8, 1989 NORWEGIAN GRANT RELATED TO CREDIT NUMBER 1844 UG AGREEMENT AGREEMENT dated as of December 8, 1989, between the GOVERNMENT OF THE KINGDOM OF NORWAY (hereinafter referred to as Norway) and the INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter referred to as the Association). Whereas (A) the Association has made available to the Republic of Uganda (hereinafter referred to as Uganda) a credit for an economic recovery program (hereinafter referred to as the Program) pursuant to a Development Credit Agreement, dated September 30, 1987, between Uganda and the Association (hereinafter referred to as the Development Credit Agreement); (B) the Association has provided supplemental financing for the Project and in this connection Norway wishes to make available a grant in an amount equivalent to twenty million Norwegian Krone (NOK 20,000,000) to assist Uganda in its debt service to the International Bank for Reconstruction and Development (hereinafter referred to as the Bank); and (C) Norway further wishes the Association to administer said funds until the debt service payments concerned have become due and payable by Uganda, and the Association has agreed to administer them upon the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Administration of the Funds Section 1.01. (a) For the purpose of this Agreement Norway shall deposit the amount of NOK 20,000,000 (the Grant) in the "T" Account maintained in the name of the Association with Norges Bank (hereinafter Page 2 referred to as the Trust Account). The funds in the Trust Account shall be freely exchangeable by the Association with other currencies as may facilitate their administration hereunder. (b) The Grant shall be deposited into the Trust Account promptly after the effectiveness of this Agreement. To facilitate the administration of trust fund assets, the Association may deposit other trust fund assets in the Trust Account. Section 1.02. Norway hereby appoints the Association as administrator of the Grant and authorizes the Association to: (a) hold and disburse the proceeds thereof towards making the payments of principal and interest due and payable by Uganda to the Bank; and (b) do any and all such acts and things as may be necessary or appropriate to fully accomplish the foregoing; provided, however, that in the event the Association shall have suspended Uganda's right to make withdrawals under the Development Credit Agreement, the Association may withhold disbursements of the Grant until such right of Uganda has been restored. Section 1.03. The Association shall exercise the same care in the discharge of its functions under this Agreement as it exercises with respect to the administration and management of its own affairs and shall have no further responsibility to Norway in respect thereof. Section 1.04. The Association may invest and reinvest the Grant in the Trust Account pending its withdrawal pursuant to Section 1.02 of this Agreement, and may retain for its own account the income from any such investment or reinvestment to assist in the defrayal of the costs of administration of the Grant. ARTICLE II Records, Accounts Section 2.01. The Association shall: (a) maintain separate records and ledger accounts of the Grant withdrawn from the Trust Account; and (b) when all the Grant has been withdrawn from the Trust Account, prepare a financial statement with respect to the Trust Account and forward a copy to Norway. ARTICLE III Consultation Section 3.01. Norway and the Association shall consult from time to time at the request of each other on all matters arising from this Agreement and in particular in case the Association suspends Uganda's right to make withdrawals under the Development Credit Agreement as provided in Section 1.02 above. ARTICLE IV Effectiveness, Termination Section 4,01. This Agreement shall become effective upon signature by the parties. Section 4.02. If at any time it appears to either party that the purposes of this Agreement cannot effectively or appropriately be carried out, the arrangements set forth herein may be terminated at the initiative of such party on thirty days' notice in writing to the other. Upon such termination, unless Norway and the Association otherwise agree, any of the Grant held hereunder by the Association shall be returned to Norway and the Association's administration shall be considered terminated. Section 4.03. This Agreement shall terminate when the Grant has been withdrawn and applied by the Association as provided in Section 1.02 of this Agreement. ARTICLE V Miscellaneous Page 3 Section 5.01. This Agreement may be amended only by written agreement of the parties hereto. Section 5.02. 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 mail, telephone, cable, telex or rapidfax to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or at such other address as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: For Norway: The Royal Ministry of Development Cooperation P.O. Box 8142, Oslo Dep. Norway Cable address: Telex: NORAD-N 74256 NORAD-N Oslo 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) IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have caused this Agreement to be signed in their respective names as of the day and year first above written. GOVERNMENT OF THE KINGDOM OF NORWAY By /s/ Kjeld Vibe Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Michael J. Gillette Acting Regional Vice President Africa