Conformed Copy - C2087 - Second Economic Recovery Credit - Dutch Grant Agreement

Page 1 DUTCH GRANT RELATED TO CREDIT NUMBER 2087 UG Dutch Grant Agreement (Second Economic Recovery Credit) between THE REPUBLIC OF UGANDA and INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of Dutch Funds provided by the MINISTER FOR DEVELOPMENT COOPERATION OF THE NETHERLANDS Dated December 20, 1991 DUTCH GRANT RELATED TO CREDIT NUMBER 2087 UG DUTCH GRANT AGREEMENT AGREEMENT, dated December 20, 1991, between THE REPUBLIC OF UGANDA (the Grantee) and INTERNATIONAL DEVELOPMENT ASSOCIATION acting as Administrator (the Administrator) of the Dutch Grant (as hereinafter defined) provided by the Minister for Development Cooperation of the Netherlands (the Minister). WHEREAS the Grantee has requested the assistance of the International Development Association (the Association) and of the Minister in the financing of the urgently needed imports required under the Grantee's program of actions, objectives and policies designed to achieve the recovery of the Grantee's economy (the Program) referred to in the Preamble to the Development Credit Agreement (Credit No. 2087 UG) dated February 8, 1990 between the Grantee and the Association (the Development Credit Agreement); WHEREAS the Association has granted a Credit for this purpose on the terms and conditions set forth in the Development Credit Agreement; WHEREAS the Minister wishes to make available to the Grantee a grant in the amount of thirty-five million Dutch Guilders (Dfls 35,000,000) (the Dutch Grant) to assist the Grantee in carrying out the Program on the terms and conditions hereinafter set forth; WHEREAS by an amendment dated August 9, 1991 to the Schedule to the arrangements dated December 11, 1986 between the Minister, the International Bank for Reconstruction and Development and the Association (the Arrangements), the Minister has requested the Association, and the Page 2 Association has accepted, to administer, inter alia, the Dutch Grant in accordance with the provisions of the Arrangements; and WHEREAS the Grantee acknowledges that the financial assistance extended to the Grantee under this Dutch Grant Agreement shall be considered as part of the bilateral development aid extended by the Government of the Netherlands to the Grantee; 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 Dutch Grant pursuant to the Arrangements, except in the phrase "member of the Association" in Sections 2.01 (5), 4.02 (b) and 6.02 (e); (b) the term "Development Credit Agreement", whenever used in the General Conditions, means this Agreement; (c) the term "Credit", whenever used in the General Conditions, means the Dutch Grant extended to the Grantee under this Agreement; (d) the term "Credit Account", whenever used in the General Conditions, means the Dutch Grant Account, the account opened by the Administrator in its books in the name of the Grantee to which the amount of the Dutch Grant is credited; (e) in Section 6.02 the term "Association" shall also include the International Development Association acting in its own capacity; (f) 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 Grantee and the Administrator, the Grantee 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 Program referred to in the Preamble to the Dutch Grant Agreement, the performance by the Grantee and the Administrator of their respective obligations under the Dutch Grant Agreement and the accomplishment of the purposes of the Dutch Grant"; and (g) Sections 3.02, 3.03, 3.04, 3.05, 4.01, 4.02, 4.03, 4.04, 4.06, 6.05, 7.01, 8.01 (a), 12.02 and 12.05 are deleted. Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement and in the Development Credit Agreement have the respective meanings therein set forth. Section 1.03. Wherever used in this Agreement, the terms "Dutch Guilders" and "Dfls" mean the currency of the Netherlands. ARTICLE II The Grant Section 2.01. The Administrator agrees to extend to the Grantee, on the terms and conditions herein set forth or referred to, a grant in an amount of thirty-five million Dutch Guilders (Dfls 35,000,000). Section 2.02. (a) The proceeds of the Dutch Grant may be withdrawn from the Dutch Grant Account for expenditures made (or, if the Administrator shall so agree, to be made) in respect of the reasonable cost of the goods Page 3 required for the Program. (b) The Grantee shall, for the purpose of the Program, open and maintain in U.S. 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 Dutch Special Account shall be made in accordance with the Schedule to this Agreement. Section 2.03. (a) Except as the Administrator shall otherwise agree, contracts for goods to be financed out of the proceeds of the Dutch Grant shall be procured in accordance with the provisions of Schedule 2 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, it being understood that the references in said Schedule to the "Association" and the "Credit Account" shall be deemed to be references to the Association acting as Administrator of the Dutch Grant and the Dutch Grant Account, respectively. (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 such item shall be financed out of the proceeds of the Dutch Grant, and the Administrator may, without in any way restricting or limiting any other right, power or remedy of the Administrator under this Agreement, by notice to the Grantee, cancel such amount of the Dutch 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 Dutch Grant. Section 2.04. The Closing Date shall be September 30, 1992 or such later date as the Administrator shall establish. The Administrator shall promptly notify the Grantee 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, it being understood that all references in said Articles III and IV to "the Association" shall be deemed to be references to the Administrator of the Dutch Grant under this Agreement and all references to the "Credit" and the "Credit Account" shall be deemed to be references to the Dutch Grant and the Dutch Grant Account, respectively. ARTICLE IV Representation; Transfer of Rights and Obligations Section 4.01. The Minister of Finance of the Grantee shall be the representative of the Grantee 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 Grantee: Ministry of Finance P.O. Box 8147 Kampala, Uganda Cable address: Telex: FINSEC 61170 Kampala For the Administrator: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 Page 4 United States of America Cable address: Telex: INDEVAS 197688 (TRT) Washington, D.C. 248423 (RCA) 64145 (WUI) or 82987 (FTCC) Section 4.03. In accordance with the Arrangements, the rights and obligations of the Administrator under this Agreement may be transferred to the Minister. The Grantee accepts and agrees that, upon notice by the Administrator to the Grantee to that effect, the Minister 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 the Minister had been an original party to this Agreement, without any further action or formality being 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 Effectiveness Section 5.01. This Agreement shall become effective as of the date first above written and shall continue in effect until the Dutch Grant has been fully disbursed and the parties to this Agreement have fulfilled their obligations under this Agreement. 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/ Stephen K. Katenta-Apuli Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of Dutch Funds provided by the MINISTER FOR DEVELOPMENT COOPERATION OF THE NETHERLANDS By /s/ Edward V.K. Jaycox Regional Vice President Africa SCHEDULE Dutch Special Account 1. For the purposes of this Schedule: (a) the term "Eligible Expenditures" means expenditures in respect of the reasonable cost of goods and services required for the Program which are to be financed out of the proceeds of the Dutch Grant; and (b) the term "Authorized Allocation" means an amount of US$1,000,000 to be withdrawn from the Dutch Grant Account and deposited into the Dutch Special Account pursuant to paragraph 3 (a) of this Schedule. Page 5 2. Except as the Administrator shall otherwise agree, payments out of the Dutch 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 Dutch Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Dutch Special Account may be made as follows: (a) On the basis of a request or requests by the Recipient for a deposit or deposits which add up to the aggregate amount of the Authorized Allocation, the Administrator shall, on behalf of the Grantee, withdraw from the Dutch Grant Account and deposit into the Dutch Special Account such amount or amounts as the Grantee shall have requested. (b) The Recipient shall furnish to the Administrator requests for replenishment of the Dutch Special Account at such intervals as the Administrator shall specify. On the basis of such requests, the Administrator shall withdraw from the Dutch Grant Account and deposit into the Dutch Special Account such amounts as shall be required to replenish the Dutch Special Account with amounts not exceeding the amount of payments made out of the Dutch Special Account for Eligible Expenditures. All such deposits shall be withdrawn by the Administrator from the Dutch Grant Account as justified by the evidence supporting the request for such deposits furnished pursuant to paragraph 4 of this Schedule. 4. For each payment made by the Recipient out of the Dutch Special Account for which the Grantee requests replenishment pursuant to paragraph 3 (b) of this Schedule, the Grantee 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 payments were made for Eligible Expenditures. 5. (a) Notwithstanding the provisions of paragraph 3 of this Schedule, no further deposit into the Dutch 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 Grantee directly from the Dutch 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 withdrawn amount of the Dutch Grant, minus the amount of any outstanding special commitment entered into by the Administrator, pursuant to Section 5.02 of the General Conditions, shall be equal to the equivalent of twice the amount of the Authorized Allocation. (b) Thereafter, withdrawal from the Dutch Grant Account of the remaining unwithdrawn amount of the Dutch Grant shall follow such procedures as the Administrator shall specify by notice to the Gurantee. Such further withdrawals shall be made only after and to the Grantee. 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 Dutch 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 Dutch 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 Dutch 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 Dutch Special Account shall be Page 6 made until the Grantee has made such deposit or refund. (b) If the Administrator shall have determined at any time that any mount outstanding in the Dutch Special Account will not be required to cover further payments for Eligible Expenditures, the Grantee shall, promptly upon notice from the Administrator, refund to the Administrator such outstanding amount for crediting to the Dutch Grant Account.