Conformed Copy - C2314 - Structural Adjustment Credit - Arrangement

Page 1 DUTCH GRANT RELATED TO CREDIT NUMBER 2314 UG Arrangements between THE MINISTER FOR DEVELOPMENT COOPERATION OF THE NETHERLANDS and INTERNATIONAL DEVELOPMENT ASSOCIATION for the Administration of Certain Funds to be made available by THE MINISTER FOR DEVELOPMENT COOPERATION OF THE NETHERLANDS in conjunction with Special Program of Assistance for Low Income, Debt-Distressed Countries (The Republic of Uganda) Date December 21, 1992 DUTCH GRANT RELATED TO CREDIT NUMBER 2314 UG ARRANGEMENTS dated as of December 21, 1992, between THE MINISTER FOR DEVELOPMENT COOPERATION OF THE NETHERLANDS (hereinafter referred to as the Netherlands) 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 a structural adjustment program (hereinafter referred to as the Program) pursuant to a Development Credit Agreement, dated December 12, 1991, between Uganda and the Association (hereinafter referred to as the Development Credit Agreement); (B) the Netherlands wishes to make available a grant (UG/92/017) in an amount equivalent to ten million Dutch Guilders (Dfls. 10,000,000) to assist Uganda in its debt service to the International Bank for Reconstruction and Development (hereinafter referred to as the Bank); and (C) the Netherlands 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 Page 2 follows: ARTICLE I Administration of the Funds Section 1.01. (a) For the purpose of the Arrangements the Netherlands shall deposit the amount of Dfls. 10,000,000 (the Grant) in the "T" Account (No. 60 01 82 673) maintained in the name of the Association with the Nederlandse Bank (hereinafter 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 these Arrangements; and receipt thereof in the Trust Account shall be confirmed by IDA to the Netherlands Ministry of Foreign Affairs, department CTR/AF/MP through the Netherlands Embassy in Washington, D.C. within fifteen days of receipt of the Grant. To facilitate the administration of trust fund assets, the Association may deposit other trust fund assets in the Trust Account. Section 1.02. The Netherlands 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 the Netherlands 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) within two weeks from the date the Grant has been withdrawn in full from the Trust Account, or by October 1, 1993, whichever is later, prepare a financial statement fully authorized by the Association's external auditors with respect to the Trust Account and forward a copy to the Netherlands. ARTICLE III Consultation Section 3.01. The Netherlands and the Association shall consult from time to time at the request of each Page 3 other on all matters arising from these Arrangements 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. These Arrangements shall become effective upon signature by the parties. Section 4.02. If at any time it appears to either party that the purposes of these Arrangements 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 the Netherlands and the Association otherwise agree, any of the Grant funds held hereunder by the Association shall be returned to the Netherlands and the Association's administration shall be considered terminated. Section 4.03. These Arrangements shall terminate when the Grant has been withdrawn and applied by the Association as provided in Section 1.02 of these Arrangements. ARTICLE V Miscellaneous Section 5.01. These Arrangements 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 these Arrangements and any agreement between the parties contemplated by these Arrangements 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 rapifax 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 the Netherlands: The Netherlands Ministry of Foreign Affairs (DGIS) P.O. Box 20061 2500 EB The Hague For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 197688 (TRT), Washington, D.C. 248423 (RCA), 64145 (WUI) or 82987 (FTCC) IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have caused these Arrangements to be signed in their Page 4 respective names as of the day and year first above written. THE MINISTER FOR DEVELOPMENT COOPERATION OF THE NETHERLANDS By /s/ Onno Ruhl Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Edward V.K. Jaycox Regional Vice President Africa