Conformed Copy - C2314 - Structural Adjustment Credit - Norwegian Grant Agreement

Page 1 NORWEGIAN GRANT RELATED TO CREDIT NUMBER 2314 UG Norwegian Grant Agreement (Structural Adjustment Program) between REPUBLIC OF UGANDA and INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of development aid funds provided by the ROYAL MINISTRY OF FOREIGN AFFAIRS OF THE KINGDOM OF NORWAY Dated September 30, 1993 NORWEGIAN GRANT RELATED TO CREDIT NUMBER 2314 UG NORWEGIAN GRANT AGREEMENT AGREEMENT, dated September 30, 1993, between REPUBLIC OF UGANDA (the "Grantee") and INTERNATIONAL DEVELOPMENT ASSOCIATION acting as Administrator (the "Administrator") of the Norwegian Grant (as hereinafter defined) provided by the Royal Ministry of Foreign Affairs of the Kingdom of Norway ("Norway"). WHEREAS the Administrator has received a letter, dated October 25, 1991 from the Grantee describing a program of actions, objectives and policies designed to achieve structural adjustment of the Grantee's economy (the "Program"); WHEREAS the Grantee has requested the assistance of the International Development Association (the "Association") and Norway in the financing of goods and services required during the execution of the Program; WHEREAS the Association has extended a credit to the Grantee on the terms and conditions set forth in the Development Credit Agreement No. 2314 UG dated December 12, 1991, between the Grantee and the Association (the "Development Credit Agreement"); WHEREAS Norway has authorized the Administrator to extend to the Grantee for the financing of part of the goods and services required during the Program a grant (the "Norwegian Grant") to assist the Grantee on the terms and conditions hereinafter set forth; WHEREAS Norway has requested, and the Association Page 2 has accepted by a letter dated September 10, 1993, to administer the Norwegian Grant in accordance with the provisions of an agreement (the "Administration Agreement") relating to a Special Program of Assistance of Sub-Saharan African Countries entered into between Norway and the Association on October 3, 1991; WHEREAS the Grantee acknowledges that the financial assistance extended to the Grantee under this Agreement (the "Norwegian Grant Agreement") shall be considered as part of the bilateral development aid extended by Norway to the Grantee; and WHEREAS the Administrator has agreed on the basis, inter alia, of the foregoing, to extend the Norwegian Grant to the Grantee upon the terms and conditions set forth in this Agreement; 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 Norwegian Grant pursuant to the Administration Agreement, except in the phrase "member of the Association" in Sections 2.01 (5), 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 Norwegian Grant extended to the Grantee under this Agreement; (d) the term "Credit Account", whenever used in the General Conditions, means the trust account opened by the Administrator in its books in the name of the Grantee to which the amount of the Norwegian Grant is credited (the "Trust Account"); (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 Norwegian Grant Agreement, the performance by the Grantee and the Administrator of their respective obligations under the Norwegian Grant Agreement and the accomplishment of the purposes of the Norwegian Grant."; and Page 3 (g) Sections 3.02, 3.03, 3.04, 3.05, 4.02, 4.03, 4.04, 4.06, 6.05, 7.01, 8.01 (a), and Article XII are deleted. Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions, in the Administration Agreement, 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 "Norwegian Kroner" and "NOK" mean the currency of Norway. ARTICLE II The Grant Section 2.01. (a) 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 million Norwegian Kroner (NOK 30,000,000) or such other amount as shall have been made available by Norway to the Administrator for this purpose pursuant to the Administration Agreement. (b) The Norwegian Grant shall not be repaid and shall bear no interest or other charges. Section 2.02. (a) The amount of the Norwegian Grant may be withdrawn from the Trust Account in accordance with Schedule 1 to the Development Credit Agreement, and as such Schedule may be amended from time to time by Agreement between the Grantee and the Administrator for the financing of expenditures made (or if the Administrator shall so agree, to be made) in respect of the reasonable cost of goods and petroleum products required for the Program. (b) Notwithstanding the provisions of paragraph (a) above, no withdrawals shall be made in respect of payments for taxes levied by, or in the territory of, the Grantee on goods and services or in the importation, manufacture, procurement or supply thereof. (c) The Grantee shall, for the purposes of the Program, open and maintain in Norwegian Kroner a special deposit account in a commercial bank, in the name of its Central Bank for the purposes of the Program, on terms and conditions satisfactory to the Administrator, including appropriate protection against set-off, seizure or attachment. Deposits into, or payments out of, the Norwegian Grant Special Account shall be made in accordance with the provisions of the Schedule to this Agreement. Section 2.03. (a) Except as the Administrator shall otherwise agree, contracts f or goods to be financed out of the proceeds of the Norwegian Grant shall be procured in accordance with the provisions of Schedule 2 to the Development Credit Agreement, it being understood that the references in said Schedule to the "Association" and the "Credit Account" shall be deemed to be references to the Administrator of the Norwegian Grant and the Trust 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 Norwegian Page 4 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 Norwegian 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 Norwegian Grant. Section 2.04. The Closing Date shall be July 15, 1994 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 and Schedule 2 thereto 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 and Schedules to the "Association", the "Borrower" and the "Credit Account" shall be deemed to be references to the Administrator, the Grantee and the Trust Account, respectively. ARTICLE IV Representatives of the Borrower; Addresses Section 4.01. The Minister of the Grantee responsible for Finance 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: Minister 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 United States of America Cable address: Telex: INDEVAS 197688 (TRT) Washington, D.C. 248423 (RCA) 64145 (WUI) or 82987 (FTCC) ARTICLE V Transfer of Rights and Obligations Section 5.01. In accordance with the provisions of Page 5 the Administration Agreement, the rights and obligations of the Administrator under this Agreement may be transferred to Norway. The Grantee accepts and agrees that, upon notice by the Administrator to the Grantee to that effect, Norway 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 Norway 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 VI Effectiveness Section 6.01. This Agreement shall become effective as of the date first above written and shall continue in effect until the Norwegian 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. REPUBLIC OF UGANDA By /s/ Stephen Katenta-Apuli Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of the Norwegian Grant By /s/ Edward V.K. Jaycox Regional Vice President Africa SCHEDULE 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 and to be financed out of the proceeds of the Grant; and (b) the term "Authorized Allocation" means an amount of NOK 13,000,000 to be withdrawn from the Trust Account and deposited into the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Except as the Administrator shall otherwise agree, payments out of the Special Account shall be made exclusively for Eligible Expenditures in accordance with the provisions of this Schedule. Page 6 3. After the Administrator has received evidence satisfactory to the Administrator that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Special Account shall be made as follows: (a) On the basis of a request or requests by the Grantee for a deposit or deposits which add up to the aggregate amount of the Authorized Allocation, the Administrator shall, on behalf of the Grantee, deposit into the Special Account such amount or amounts out of the proceeds of the Grant as the Grantee shall have requested. (b) The Grantee shall furnish to the Administrator requests for replenishment of the Special Account at such intervals as the Administrator shall specify. On the basis of each such request, the Administrator shall deposit into the Special Account such amount out of the proceeds of the Grant as shall be required to replenish the Special Account with amounts not exceeding the amount of payments made out of the Special Account for Eligible Expenditures. All such deposits shall be made by the Administrator in the respective equivalent amounts, as shall have been justified by said documents and other evidence supporting the request for such deposits furnished pursuant to paragraph 4 of this Schedule. 4. For each payment made by the Grantee out of the Special Account for which the Grantee requests replenishments 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 showing that such payment was made exclusively for Eligible Expenditures. 5. (a) Notwithstanding the provisions of paragraph 3 of this Schedule, no further deposit into the 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 directly to the Grantee; or (ii) the total unwithdrawn amount of the Grant shall be equal to the equivalent of twice the amount of the Authorized Allocation. (b) Thereafter, withdrawal from the Grant proceeds remaining unwithdrawn shall follow such procedures as the Administrator shall specify by notice 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 an deposit in the Special Account as of the date of such notice will be utilized in making payments for Eligible Expenditures. 6. If the Administrator shall have determined at any time that any payment out of the Special Account: (i) was made f or an expenditure or in an amount not eligible pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence furnished to the Administrator pursuant to paragraph 4 of this Schedule, the Grantee shall, promptly upon notice from the Administrator, deposit into the 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 Special Account shall be made until the Grantee has Page 7 made such deposit or refund. 7. If the Administrator shall have determined at any time that any amount outstanding in the 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 which will be added to the unwithdrawn amount of the Grant.