Conformed Copy - C1824 - Forestry Rehabilitation Project - DANIDA Grant Agreement

Page 1 DANIDA GRANT RELATED TO CREDIT NUMBER 1824 UG DANIDA Grant Agreement (Forestry Rehabilitation Project) between THE REPUBLIC OF UGANDA and INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of Grant Funds Provided by the DANISH INTERNATIONAL DEVELOPMENT AGENCY Dated January 11, 1988 DANIDA GRANT RELATED TO CREDIT NUMBER 1824 UG DANIDA GRANT AGREEMENT AGREEMENT, dated January 11, 1988, between THE REPUBLIC OF UGANDA (the Recipient) and the INTERNATIONAL DEVELOPMENT ASSOCIATION, as Administrator (the Administrator) of Grant Funds Provided by the DANISH INTERNATIONAL DEVELOPMENT AGENCY (DANIDA). WHEREAS: (A) the Recipient has requested the assistance of the International Development Association (the Association) and DANIDA in the financing of the Forestry Rehabilitation Project (the Project) described in Schedule 2 to Development Credit Agreement Number 1824-UG, dated July 6, 1987, between the Recipient and the Association (the Development Credit Agreement); (B) the Association has granted a Credit for this purpose on the terms and conditions set forth in the Development Credit Agreement; (C) DANIDA wishes to make available to the Recipient a grant in an amount equivalent to seven million five hundred thousand dollars ($7,500,000) (the DANIDA Grant) to assist the Recipient in carrying out part of the Project on the terms and conditions hereinafter set forth; (D) pursuant to arrangements, dated November 12, 1987, between DANIDA and the Association, DANIDA has requested the Association, and the Association has accepted, to administer the DANIDA Grant in accordance with the provisions of those arrangements; and (E) the Recipient acknowledges that the financial assistance Page 2 extended to the Recipient under this DANIDA Grant Agreement shall be considered as part of the bilateral development aid extended by DANIDA to the Recipient; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Development Credit Agreements of the Association", dated January 1, 1985 (the General Conditions), constitute an integral part of this Agreement subject, however, to the following modifications thereof: (a) the term "Association", wherever used in the General Conditions, means the International Development Association, acting as Administrator of the DANIDA Grant, pursuant to the arrangements between DANIDA and the Association referred to in the Preamble to this Agreement, except in the phrase "member of the Association" in Sections 2.01 (5) and 6.02 (e); (b) the term "Development Credit Agreement", wherever used in the General Conditions, means this Agreement; (c) the term "Credit", wherever used in the General Conditions, means the DANIDA Grant extended to the Recipient under this Agreement; (d) the term "Credit Account", wherever used in the General Conditions, shall be amended to read "DANIDA Grant Account"; (e) Section 4.01. Shall be modified to read: "Withdrawals from the DANIDA Grant Account shall be made in dollars; provided, however, that, if the expenditures to be financed out of the proceeds of the DANIDA Grant have been paid or are payable in another currency, the Administrator shall, at the request of the Recipient and at the time of a withdrawal from the DANIDA Grant Account, purchase such currency with the proceeds of such with- drawal." (f) in Section 6.02, the term "Association" shall also include the International Development Association acting in its own capacity; (g) Section 9.06 (c) shall be modified to read: "(c) Not later than six months after the Closing Date or such later date as may be agreed for this purpose between the Recipient and the Administrator, the Recipient shall prepare and furnish to the Administrator a report, of such scope and in such detail as the Administrator shall reasonably request, on the execution of the Project referred to in the Preamble to the DANIDA Grant Agreement, the performance by the Recipient and the Administrator of their respective obligations under the DANIDA Grant Agreement and the accomplishment of the purposes of the DANIDA Grant"; (h) Sections 3.02, 3.03, 3.04, 3.05, 4.01, 4.03, 4.04, 4.06, 6.05, 7.01, 8.01 (a), 12.02 and 12.05 are deleted; and (i) the term Borrower, whenever used in the General Conditions, means the Recipient. Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions, in the Preamble to this Agreement and in the Development Credit Agreement have the respective meanings therein set forth, and the term DANIDA Special Account means the Special Account referred to in Section 2.02 (b) of this Agreement. ARTICLE II The Grant Page 3 Section 2.01. The Administrator agrees to extend to the Recipient, on the terms and conditions set forth or referred to herein, a grant in an amount of seven million five hundred thousand dollars ($7,500,000). Section 2.02. (a) The amount of the DANIDA Grant may be withdrawn from the DANIDA Grant 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 Recipient and the Administrator. (b) The Recipient shall, for the purposes of Part B of the Project, open and maintain in dollars a special account in a commercial bank, through the Bank of Uganda, on terms and conditions satisfactory to the Administrator. Deposits into and payments out of the DANIDA Special Account shall be made in accordance with Schedule 2 to this Agreement. Section 2.03. (a) Except as the Administrator shall otherwise agree, contracts for goods and services to be financed out of the proceeds of the DANIDA Grant shall be procured in accordance with the provisions of Schedule 3 to the Development Credit Agreement, which is hereby incorporated into this Agreement with the same force and effect as if it were fully set forth herein. The references to the Association in said Schedule shall be deemed to be references to the Association, acting as Administrator of the DANIDA Grant. (b) If the Administrator shall have reasonably determined that the procurement of any item is inconsistent with the procedures set forth or referred to in paragraph (a) above, no expenditures for any such item shall be financed out of the proceeds of the DANIDA Grant, and the Administrator may, by notice to the Recipient, without in any way restricting or limiting any other right, power or remedy of the Administrator under this Agreement, cancel such amount of the DANIDA Grant as, in the Administrator's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the DANIDA Grant. Section 2.04. The Closing Date shall be December 31, 1994, or such later date as the Administrator shall establish. The Administrator shall promptly notify the Recipient of such later date. ARTICLE III Execution of the Project Section 3.01. Except as otherwise expressly provided herein, Articles III and IV of the Development Credit Agreement are hereby incorporated into this Agreement with the same force and effect as if they were fully set forth herein. All references to the Association in said Articles shall be deemed to be references to the Administrator of the DANIDA Grant under this Agreement, all references to the Credit and the Credit Account shall be deemed to be references to the DANIDA Grant and the DANIDA Grant Account, respectively, and all references to the Borrower shall be deemed to be references to the Recipient. ARTICLE IV Representation; Transfer of Rights and Obligations Section 4.01. The Minister of Finance of the Recipient shall be the representative of the Recipient for the purposes of Section 11.03 of the General Conditions. Section 4.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Recipient: Ministry of Finance P.O. Box 8147 Kampala Uganda Cable address: Telex: Page 4 FINSEC 61170 Kampala For the Administrator: 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) Section 4.03. In accordance with the arrangements referred to in the Preamble to this Agreement, the rights and obligations of the Administrator under this Agreement may be transferred to DANIDA. The Recipient accepts and agrees that, upon notice to that effect by the Administrator to the Recipient, DANIDA shall, ipso facto, from the date specified in such notice, be substituted in all rights and obligations of the Administrator under this Agreement as if DANIDA had been an original party to this Agreement, without any further action or formality required on the part of any party, and, from such date, the Administrator shall cease to have any rights or obligations as a party under this Agreement. ARTICLE V Termination Section 5.01. This Agreement shall continue in effect until the DANIDA Grant has been fully disbursed, and the parties to this Agreement have fulfilled their obligations hereunder. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, 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. THE REPUBLIC OF UGANDA By /s/ Francis Katana Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of Grant Funds Provided by the DANISH INTERNATIONAL DEVELOPMENT AGENCY By /s/ Callisto Madavo Acting Regional Vice President Africa SCHEDULE 1 Withdrawal of the Proceeds of the DANIDA Grant The table below sets forth the Categories of items to be financed out of the proceeds of the DANIDA Grant, the allocation of the amounts of the DANIDA Grant to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Page 5 Grant Allocated % of (Expressed in Expenditures CategoryDollar Equivalent) to be Financed (1) Civil Works 1,200,000 100% of foreign expenditures and 90% of local expenditures (2) Technical 1,500,000 100% Assistance and Training (3) Vehicles, 2,700,000 100% of foreign Furniture, expenditures and Equipment, 90% of local Tools and expenditures Materials (4) Incremental 1,400,000 90% for with- recurrent drawals up to costs in- an aggregate cluding staff amount equiva- allowances lent to $500,000; 80% for with- drawals exceed- ing an aggregate amount equivalent to $500,000 but not exceeding $1,000,000; and 60% for with- drawals exceeding an aggregate amount equivalent to $1,000,000 but not exceeding $1,400,000. (5) Unallocated 700,000 TOTAL 7,500,000 SCHEDULE 2 DANIDA Special Account 1. For the purposes of this Schedule: (a) the term "Eligible Categories" means Categories (1) through (4) set forth in the table in Schedule 1 to this Agreement; (b) the term "Eligible Expenditures" means expenditures in respect of the reasonable cost of goods and services required for Part B of the Project and to be financed out of the proceeds of the DANIDA Grant allocated from time to time to the Eligible Categories in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount of $500,000 to be withdrawn from the DANIDA Grant Account and deposited into the DANIDA Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Except as the Administrator shall otherwise agree, payments out of the DANIDA Special Account shall be made exclusively for Eligible Expenditures in accordance with the provisions of this Schedule. 3. After the Administrator has received satisfactory evidence that the DANIDA Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the DANIDA Special Account may be made as follows: (a) On the basis of a request or requests by the Recipient for a Page 6 deposit or deposits which add up to the aggregate amount of the Authorized Allocation, the Administrator shall, on behalf of the Recipient, withdraw from the DANIDA Grant Account and deposit into the DANIDA Special Account such amount or amounts as the Recipient shall have requested. (b) The Recipient shall furnish to the Administrator requests for replenishment of the DANIDA Special Account at such intervals as the Administrator shall specify. On the basis of such requests, the Administrator shall withdraw from the DANIDA Grant Account and deposit into the DANIDA Special Account such amounts as shall be required to replenish the DANIDA Special Account with amounts not exceeding the amount of payments made out of the DANIDA Special Account for Eligible Expenditures. All such deposits shall be withdrawn by the Administrator from the DANIDA Grant 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 Recipient out of the DANIDA Special Account for which the Recipient requests replenishment pursuant to paragraph 3 (b) of this Schedule, the Recipient shall furnish to the Administrator, prior to or at the time of such request, such documents and other evidence as the Administrator shall reasonably request, showing that such payment was made for Eligible Expenditures. 5. (a) Notwithstanding the provisions of paragraph 3 of this Schedule, no further deposit into the DANIDA Special Account shall be made by the Administrator when either of the following situations first arises: (i) the Administrator shall have determined that all further withdrawals should be made by the Recipient directly from the DANIDA Grant Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or (ii) the total unwithdrawn amount of the Grant allocated to the Eligible Categories for Part B of the Project, minus the amount of any outstanding special commitment entered into by the Administrator pursuant to Section 5.02 of the General Conditions with respect to Part B of the Project, shall be equal to the equivalent of twice the amount of the Authorized Allocation. (b) Thereafter, withdrawal from the DANIDA Grant Account of the remaining unwithdrawn amount of the Grant allocated to the Eligible Categories for Part B of the Project shall follow such procedures as the Administrator shall specify by notice to the Recipient. Such further withdrawals shall be made only after and to the extent that the Administrator shall have been satisfied that all such amounts remaining on deposit in the DANIDA Special Account as of the date of such notice will be utilized in making payments for Eligible Expenditures. 6. (a) If the Administrator shall have determined at any time that any payment out of the DANIDA 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 furnished pursuant to paragraph 4 of this Schedule, the Recipient shall, promptly upon notice from the Administrator, deposit into the DANIDA Special Account (or, if the Administrator shall so request, refund to the Administrator) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. No further deposit by the Administrator into the DANIDA Special Account shall be made until the Recipient has made such deposit or refund. (b) If the Administrator shall have determined at any time that any amount outstanding in the DANIDA Special Account will not be required to cover further payments for Eligible Expenditures, the Recipient shall, promptly upon notice from the Administrator, refund to the Administrator Page 7 such outstanding amount for crediting to the DANIDA Grant Account.