Conformed Copy - C2087 - Second Economic Recovery Credit - Agreement 2

Page 1 AGREEMENT RELATED TO CREDIT NUMBER 2087 UG Agreement between THE GOVERNMENT OF SWEDEN (Second Economic Recovery Credit) and INTERNATIONAL DEVELOPMENT ASSOCIATION for the Administration of Certain Funds to be made available by THE SWEDISH INTERNATIONAL DEVELOPMENT AUTHORITY Dated August 26, 1991 AGREEMENT RELATED TO CREDIT NUMBER 2087 UG AGREEMENT AGREEMENT, dated August 26, 1991, between the GOVERNMENT OF SWEDEN (Sweden) and the INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) to provide for the administration, by the Association, of certain funds to be made available by Sweden to the Republic of Uganda (Uganda). WHEREAS: (A) the administration agreement, dated 18 May 1989, between Sweden and the Association provides the framework for cofinancing of development projects by the parties thereto: (B) Sweden wishes to make available to Uganda a grant not exceeding fifty million Swedish Kroner (SEK 50,000,000) (the Grant) to assist Uganda in financing the imports needed during the execution of the Economic Recovery Program (the Program) referred to in the Development Credit Agreement (Credit 2087-UG) dated February 8, 1990, between Uganda and the Association (the Development Credit Agreement); (C) Sweden wishes that the proceeds of the Grant should be incremental to the Development Credit and extended for the same purposes by the Association pursuant to the Development Credit Agreement; and WHEREAS the Association has agreed, on the basis, inter alia, of the foregoing, to administer the Grant upon the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Page 2 Section 1.01. The Association, as Administrator on behalf of Sweden, shall review and approve withdrawal requests submitted by Uganda for financing the reasonable cost of goods and services required during the execution of the program in accordance with the provisions of Schedule 1 of the Development Credit Agreement. The amounts to be withdrawn shall not be repaid and shall bear no interest or other charges. Section 1.02. The Association, as Administrator on behalf of Sweden, shall have the sole responsibility for the supervision of the Project. Section 1.03. For the purposes of the Project, the Association will require Uganda to open and maintain in dollars a special account in a commercial bank on terms and conditions satisfactory to the Association. Deposits into, and payments out of the Special Account shall be made in accordance with Schedule 4 of the Development Credit Agreement; it being understood that the amount of the Authorized Allocation shall be deemed to be the equivalent of twenty-five million Swedish kroner (SEK 25,000,000). Section 1.04. 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 Sweden in respect thereof. ARTICLE II Section 2.01. (a) For the purpose of this Agreement, Sweden shall deposit an amount of fifty million Swedish Kroner (SEK 50,000,000) in one tranche in a general account with the Sveriges Riksbank in the name of the Association (the T-Account). (b) The funds in the T-Account shall be freely exchangeable by the Association with other currencies as may facilitate their administration. Section 2.02. The Association shall disburse from the T-Account such amounts as from time to time shall be needed to meet the reasonable costs of goods financed, or to be financed, pursuant to Section 1.01 of this Agreement. Such disbursement shall be effected on the basis of withdrawal applications for eligible expenditures submitted by Uganda to the Association, in accordance with the Association's normal procedures for withdrawal of proceeds of credits made by the Association. Section 2.03. In order to assist in defraying of the costs of administration and other expenses incurred by the Association under this Agreement, the Association may invest and reinvest the funds in the T- Account, pending their disbursement to Uganda, and may retain for its own account the income from any such investment or reinvestment. Section 2.04. The Closing Date shall be December 31, 1992, or such later date as the Association shall establish. The Association shall promptly notify Uganda of such later date. ARTICLE III Section 3.01. (a) The Association shall: (i) maintain separate records and accounts in respect of the funds in the T-Account disbursed by the Association pursuant to the provisions of this Agreement; and (ii) furnish on a quarterly basis to Sweden a statement of account on such records and accounts. (b) Promptly after all funds made available under this Agreement have been disbursed from the T-Account to Uganda, or upon termination of this Agreement, the Association shall cause such records and accounts to be audited and certified by the Association's external auditors and shall furnish the report of such audit by said auditors to Sweden. ARTICLE IV Section 4.01. Sweden and the Association shall consult from time to time at the request of each other on all matters arising out of this Agreement. Section 4.02. The Association shall keep Sweden informed of the Page 3 progress of the Program. To that end, the Association shall furnish to Sweden all relevant progress, performance and assessment reports related to the Program. Section 4.03. The Association shall inform Sweden of any forthcoming major missions and meetings in connection with the Program and shall afford representatives of Sweden the opportunity to participate in such missions and meetings. Section 4.04. The Association shall inform Sweden of any proposed significant modification to the Development Credit Agreement and shall afford Sweden a reasonable opportunity to exchange views with the Association before effecting any such modification. ARTICLE V Section 5.01. The Swedish International Development Authority, SIDA, shall be competent to represent Sweden for the application of this Agreement. ARTICLE VI Section 6.01. This Agreement shall become effective upon signature and, subject to the provisions of this Article, shall continue in effect until 31 December 1992 or until all funds made available under this Agreement have been disbursed from the T-Account to Uganda and all other formalities incidental thereto have been completed. Section 6.02. If at any time it appears to either party that the purposes of this Agreement can no longer effectively or appropriately be carried out, this Agreement may be terminated at the initiative of such party on ninety (90) days notice in writing. Section 6.03. Upon termination of this Agreement, unless the parties agree on another course of action, any funds of Sweden held hereunder by the Association shall be returned to Sweden, and the Association's administration shall be considered terminated. ARTICLE VII Section 7.01. This Agreement may be amended only by written agreement of the parties hereto. Section 7.02. 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, mail, fax, cable or telex 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 addresses as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: For Sweden: Swedish International Development Authority S-105 25 Stockholm Sweden Telephone: 8-728 51 00 Telex: SIDA 11450 For the Association: International Development Association 1818 H. Street N.W. Washington, D.C. 20433 U.S.A. Telex: 197688 (ITT) 248423 (RCA) Page 4 64145 (WUI) 82987 (FTCC) IN WITNESS WHEREOF, the undersigned duly authorized thereto, have signed this Agreement. GOVERNMENT OF SWEDEN By /s/ Percy Westerlund Date August 22, 1991 INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Callisto Madavo Date August 26, 1991