Conformed Copy - C2371 - Public Works and Capacity Building Project - Development Credit Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2371 MLI (Public Works and Capacity Building Project) between REPUBLIC OF MALI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated July 17, 1992 CREDIT NUMBER 2371 MLI DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated July 17, 1992, between REPUBLIC OF MALI (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Associa- tion). WHEREAS (A) the Borrower, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Association to assist in the financing of the Project; and (B) the Borrower intends to obtain from other donors loans or grants in an amount of $6,000,000 to assist in financing part of the Project; WHEREAS the Association has agreed on the basis, inter alia, of the foregoing, to extend the Credit to the Borrower upon the terms and conditions set forth in this Agreement; Page 2 NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Develop- ment Credit Agreements" of the Association, dated January 1, 1985, with the last sentence of Section 3.02 deleted (the General Conditions) constitute an integral part of this Agreement. Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement; (b) "Agetipe-Mali" and "Executing Agency" mean Agence d'Execution des Travaux d'Interct Public pour l'Emploi du Mali, established pursuant to the statutes adopted by its General Assembly held on March 7, 1992 and modified on May 2, 1992; (c) "Project Preparation Advance" means the project preparation advance granted by the Association to the Borrower pursuant to an exchange of letters dated November 2, 1990 and December 13, 1990, and August 17, 1991 and October 4, 1991, respectively, between the Borrower and the Association; (d) "Convention" means the Agreement, dated April 6, 1992, signed between the Borrower and Agetipe-Mali, as the same may be amended from time to time; and such term includes the Manuel de Procedures and all annexes to the Convention; (e) "Sub-project" means any activities described as such in Schedule 2 to this Agreement, and to be financed out of the proceeds of the Credit or in accordance with the provisions of Section 3.01 (c) (i) B of this Agreement; (f) "CFA Franc" means the currency of the Borrower; and (g) "DGMP" means "Direction Generale des Marches Publics". ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount in various currencies equivalent to fourteen million and seven hundred fifty thousand Special Drawing Rights (SDR 14,700,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Credit. (b) The Borrower shall, for the purposes of the Project, open and maintain in CFA Francs a special deposit account in a commercial bank on terms and conditions satisfactory to the Association, including appropriate protection against set-off, seizure or attachment. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 5 to this Agreement. (c) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit Account Page 3 and pay to itself the amount required to repay the principal amount of the Project Preparation Advance withdrawn and outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advance shall thereupon be cancelled. Section 2.03. The Closing Date shall be March 31, 1997 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.04. (a) The Borrower shall pay to the Association a commitment charge on the principal amount of the Credit not withdrawn from time to time at a rate to be set by the Association as of June 30 of each year, but not to exceed the rate of one-half of one percent (1/2 of 1%) per annum. (b) The commitment charge shall accrue: (i) from the date sixty days after the date of this Agreement (the accrual date) to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or cancelled; and (ii) at the rate set as of the June 30 immediately preceding the accrual date and at such other rates as may be set from time to time thereafter pursuant to paragraph (a) above. The rate set as of June 30 in each year shall be applied from the next date in that year specified in Section 2.06 of this Agreement. (c) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without restric- tions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one percent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Commitment charges and service charges shall be payable semi-annually on April 1 and October 1 in each year. Section 2.07. (a) Subject to paragraphs (b) and (c) below, the Borrower shall repay the principal amount of the Credit in semi- annual installments payable on each April 1 and October 1 commencing October 1, 2002 and ending April 1, 2032. Each installment to and including the installment payable on April 1, 2012 shall be one percent (1%) of such principal amount, and each installment thereafter shall be two percent (2%) of such principal amount. (b) Whenever (i) the Borrower's gross national product per capita, as determined by the Association, shall have exceeded $790 in constant 1985 dollars for five consecutive years and (ii) the Bank shall consider the Borrower creditworthy for Bank lending, the Association may, subsequent to the review and approval thereof by the Executive Directors of the Association and after due consider- ation by them of the development of the Borrower's economy, modify the terms of repayment of installments under paragraph (a) above by requiring the Borrower to repay twice the amount of each such installment not yet due until the principal amount of the Credit shall have been repaid. If so requested by the Borrower, the Association may revise such modification to include, in lieu of some or all of the increase in the amounts of such installments, the payment of interest at an annual rate agreed with the Association on the principal amount of the Credit withdrawn and outstanding from time to time, provided that, in the judgment of the Association, such revision shall not change the grant element obtained under the above-mentioned repayment modification. (c) If, at any time after a modification of terms pursuant to paragraph (b) above, the Association determines that the Borrower's economic condition has deteriorated significantly, the Page 4 Association may, if so requested by the Borrower, further modify the terms of repayment to conform to the schedule of installments as provided in paragraph (a) above. Section 2.08. The currency of the French Republic is hereby specified for the purposes of Section 4.02 of the General Condi- tions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement and, to this end and without any limitation or restriction upon any of its obligations under this Agreement, shall carry out the Project through Agetipe-Mali, in accordance with the provisions of the Convention with due diligence and efficiency and in conformi- ty with appropriate administrative, financial, engineering and public works practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) The Borrower shall exercise its rights under the Convention in such manner as to protect the interests of the Borrower and the Association and to accomplish the purposes of the Credit, and except as the Association shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive the Convention or any provision thereof. (c) Without limitation upon the provisions of Section 3.01 (a) of this Agreement the Borrower shall: (i) Exercise its rights under the Convention to cause the Executing Agency to: (A) adopt not later than six months after the Effective Date the final versions, satis- factory to the Association, of the Action Plan for technical and managerial assis- tance referred to in Section 7.01 (c) of this Agreement. (B) execute, not later than September 30, 1996, a program of new subprojects representing an aggregate cost of $2.22 million equiva- lent, out of which: subprojects represent- ing an aggregate amount of at least $450,000 equivalent shall be completed during the twelve months ending Septem- ber 30, 1993; subprojects representing $600,000 equivalent shall be completed during the twelve months ending Septem- ber 30, 1994; and subprojects representing $750,000 equivalent shall be completed during the twelve months ending Septem- ber 30, 1995; and (C) submit to the Association for approval, in addition to the initial program of selected subprojects submitted prior to the Effective Date, not later than Septem- ber 30, 1993, September 30, 1994, and September 30, 1995, annual programs of subprojects representing respectively an aggregate amount of at least $6.3 million equivalent, $7.4 million equivalent and $7.8 million equivalent. (ii) make available to the Agency out of its own resources all the necessary funds needed for the execution of the subprojects referred to in sub- Page 5 paragraph (i) (B) of this Section. (d) For the purposes of obtaining the Association's approval to any of the annual programs referred to in sub-paragraph (c) (i) (C) of this Section, the Borrower shall furnish to the Association satisfactory evidence attesting that pursuant to paragraph (a) and paragraph (c) (ii) of this Section, the Borrower has (i) paid its contribution for the previous year and (ii) made budgetary provi- sions for its contribution for the current year. Section 3.02. The Borrower shall exercise its rights under the Convention to keep the position of Director General of Agetipe-Mali filled, at all times, by a person having experience and qualifica- tions acceptable to the Borrower and the Association. Section 3.03. Except as the Association shall otherwise agree, procurement of the goods, works and consultants' services required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to this Agreement. Section 3.04. Without any limitation to or restriction upon its other reporting requirements under the General Conditions and this Agreement, the Borrower, Agetipe-Mali and the Association shall not later than October 31, 1993 or such other date as the Borrower and the Association shall agree upon carry out a mid-term review with regard to (i) the progress of the Project and sub-projects, (ii) the management of the operations of Agetipe-Mali, the perfor- mance by Agetipe-Mali of its obligations under the Convention (including procurement procedures), (iii) the performance by the Agetipe-Mali and implementing enterprises of their respective obligations under sub-project agreements, and other matters relating to the purposes of the Credit. The recommendations agreed upon between the Association and the Borrower during such review shall be implemented with due diligence. Section 3.05. The Borrower shall (a) submit to the Association quarterly reports on the number and amount of contracts monitored by DGMP; (b) Not later than October 31, 1993, carry out with the Association an assessment of the implementation of the Borrower's procurement reforms. (c) After such assessment, take all necessary measures, including revisions of the legal and regulatory framework of procurement procedures satisfactory to the Association, to implement the recommendations thereof, for further implementation of Part D of the Project. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall cause Agetipe-Mali to maintain records and accounts adequate to reflect in accordance with sound accounting practices the operations and financial condition of Agetipe-Mali. (b) The Borrower shall cause Agetipe-Mali to: (i) have its records, accounts and financial state- ments (balance sheets, statements of income and expenses and related statements) and the records and accounts for the Special Account for each six months audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Associa- tion; (ii) furnish to the Association as soon as available, but in any case not later than three months after the end of the period referred to sub-paragraph Page 6 (i) above, (A) certified copies of its financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning such records, accounts, financial statements and the audit thereof as the Associa- tion shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Borrower shall cause Agetipe-Mali to: (i) maintain, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until one year after the Association has received the audit report for the fiscal year in which the last disbursement from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association's representatives to examine such records; and (iv) ensure that such records and accounts are includ- ed in the semi-annual audit referred to in para- graph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expendi- ture submitted during such period together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. ARTICLE V Other Covenants Section 5.01. The Borrower shall exercise its rights under the Convention to cause Agetipe-Mali: (a) to take out and maintain with responsible insurers, or to make other provision satisfactory to the Association, for insurance against such risks and in such amounts as shall be consistent with appropriate practice; (b) to carry out its operations and conduct its affairs in accordance with sound administrative, financial, engineering and public works practices under the supervision of qualified and experienced management acceptable to the Association assisted by competent staff in adequate numbers; and (c) at all times to operate and to maintain its equipment and other property, and from time to time, promptly as needed, to make all necessary repairs and renewals thereof, all in accordance with sound engineering, financial and public works practices. Section 5.02. The Borrower and the Association hereby agree that the obligations set forth in Sections 9.03, 9.04, 9.05, 9.06 and 9.07 of the General Conditions (relating to insurance, use of goods and services, plans and schedules, records and reports, and maintenance, respectively) shall be carried out by Agetipe-Mali. ARTICLE VI Remedies of the Association Page 7 Section 6.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional events are specified: (a) as a result of events which have occurred after the date of this Agreement, a situation shall have arisen which shall make it improbable that Agetipe-Mali will be able to perform its obligations under the Convention; (b) the Statutes of Agetipe-Mali shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of Agetipe-Mali to perform any of its obligations under the Convention; (c) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of the Executing Agency, or for the suspension of its operations; (d) the Borrower or the Executing Agency shall have failed to perform any of their respective obligations under the Convention; (e) the Convention shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the Project or the performance by the Executing Agency of its obligations under the Convention; (f) (i) Subject to subparagraph (ii) of this paragraph: (A) the right of the Borrower to withdraw the proceeds of any grant or loan made to the Borrow- er for the financing of the Project shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agree- ment providing therefor, or (B) any such loan shall have become due and payable prior to the agreed maturity thereof. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satis- faction of the Association that: (A) such suspen- sion, cancellation, termination or prematuring is not caused by the failure of the Borrower to perform any of its obligations under such agree- ment; and (B) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consistent with the obliga- tions of the Borrower under this Agreement. Section 6.02. Pursuant to Section 7.01 (d) of the General Conditions, the following additional events are specified: (a) any event specified in paragraph (d) of Section 6.01 of this Agreement shall occur and shall continue for a period of thirty (30) days after notice thereof shall have been given by the Association to the Borrower; (b) any event specified in paragraphs (b), (c) or (e) of Section 6.01 of this Agreement shall occur; and (c) any event specified in paragraph (f) (i) (B) of Section 6.01 of this Agreement shall occur, subject to the proviso of paragraph (f) (ii) of that Section. ARTICLE VII Effective Date; Termination Section 7.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) An operational accounting system consistent with the Manuel de Procedures and satisfactory to the Association has been set up in Agetipe-Mali; Page 8 (b) the auditors referred to in Section 4.01 (b) of this Agreement, have been appointed; (c) the Association has approved an initial action plan for the carrying out of Part B of the Project and final action plans for the implementation of the program under Part C.2 of the Project; and (d) the Association has approved an initial program of selected sub-projects representing an aggregate estimated cost of the equivalent of $4,600,000 or more; and (e) An "arrcte on the exemptions granted under the Conven- tion, satisfactory to the Association, has been signed by the relevant minister of the Borrower. Section 7.02. The following is specified as an additional matter, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association, namely, that the Convention has been duly authorized or ratified by the Borrower and Agetipe-Mali, and is legally binding upon the Borrower and Agetipe-Mali in accordance with its terms. Section 7.03. The date ninety (90) days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VIII Representative of the Borrower; Addresses Section 8.01. The Minister of the Borrower at the time responsible for finances is designated as representative of the Borrower for the purposes of Section 11.03 of the General Condi- tions. Section 8.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministry of Economy and Finance Bamako, Mali Telex: 972559 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 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 MALI Page 9 By /s/ Mahamar Oumar Maiga Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Edward V.K. Jaycox Regional Vice President Africa SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Public works 8,800,000 100% under Part A of the Project (2) Consultants' 1,800,000 100% services and training under Parts B and C of the Project (3) Equipment for 275,000 100% Agetipe-Mali (4) Operating 1,300,000 100% costs of Agetipe-Mali (5) Under Part D of 100% the Project: (a) Equipment, 500,000 office supplies and vehicles (b) Consultants' 265,500 services and training Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (6) Refunding of 1,000,000 Amounts due pur- Project Pre- suant to Section paration 2.02 (c) of this Advance Agreement (7) Unallocated 760,000 __________ TOTAL 14,700,000 Page 10 ========== 2. For the purposes of this Schedule "operating costs" means the costs incurred by Agetipe-Mali under the Project on account of local staff salaries and allowances, operation and maintenance of vehicles and equipment, office rent, supplies and services. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expendi- tures prior to the date of this Agreement. SCHEDULE 2 Description of the Project The objectives of the Project are: (a) to create temporary employment during project implementation by means of labor-intensive technologies, and contribute to employment creation in the long run by showing that such technologies are indeed feasible; (b) to improve the viability of Bamako and its vicinity by means of a program of urgently needed, small-scale public works; (c) to increase the capacity of the public sector to orient and manage efficiently its demand for works, goods and services; (d) to demonstrate the feasibility of less cumbersome and more transparent procurement procedures and contract administration; (e) to strength- en the capacity of the private sector to design, implement and supervise a wide range of public works; and (f) to carry out reforms of Borrower's procurement procedures. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Association may agree upon from time to time to achieve such objectives: Part A: Preparation and implementation of a program of essential, small-scale public works aimed at rehabilitating and maintaining urban infrastructure, using labor intensive technologies. Part B: Services related to work organization, management and labor force training, to local contractors for the execution of works under Part A above. Part C: 1. Training to improve the capacity of local governments to identify subprojects and the capacity of consulting firms to prepare feasibility studies and technical proposals; 2. Program of information dissemination and consciousness raising measures aimed at increasing beneficiaries' participation in subproject identification, execution and maintenance; and 3. Monitoring of the implementation of the Project. Part D: Assistance to DGMP for the implementation of the Borrower's on-going procurement reforms, including: training of staff of DGMP and technical ministries, strengthening of DGMP's capacity to implement the reforms and drafting of standard bidding and contracts conditions. * * * The Project is expected to be completed by September 30, 1996. SCHEDULE 3 Procurement and Consultants' Services Page 11 Section I. Procurement of Goods and Works Part A: International Competitive Bidding Except as provided in Part D hereof, goods and works shall be procured under contracts awarded in accordance with procedures consistent with those set forth in Sections I and II of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1985 (the Guidelines). Part B: Preference for Domestic Contractors In the procurement of works in accordance with the procedures described in Part A hereof, the Borrower may grant a margin of preference to domestic contractors in accordance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraph 5 of Appendix 2 thereto. Part C: Other Procurement Procedures Contracts for works estimated to cost the equivalent of $539,000 or less per contract may be awarded on the basis of local competitive bidding, in accordance with procedures satisfactory to the Association, amongst bidders who have been prequalified on the basis of criteria acceptable to the Association. Part D: Review by the Association of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract for works estimated to cost the equivalent of $180,000 or more, or for which less than 5 bids have been received the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract required to be furnished to the Association pursuant to said paragraph 2 (d) shall be furnished to the Association prior to the making of the first payment out of the Special Account in respect of such contract. (b) With respect to each contract not governed by the pre- ceding paragraph, the procedures set forth in paragraphs 3 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract together with the other information required to be furnished to the Association pursuant to said paragraph 3 shall be furnished to the Association as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 4 to this Agreement. (c) The provisions of the preceding subparagraph (b) shall not apply to contracts on account of which withdrawals from the Credit Account are to be made on the basis of statements of expenditure. 2. The figure of 15% is hereby specified for purposes of para- graph 4 of Appendix 1 to the Guidelines. Section II. Employment of Consultants In order to assist the Borrower in carrying out the Project the Borrower shall cause Agetipe-Mali to employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. Page 12 SCHEDULE 4 Special Account 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories 1 to 4 set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (b) the term "eligible expenditures" means expenditures in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit 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 equivalent to CFAF 400,000,000 to be withdrawn from the Credit Account and deposited into the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Payments out of the Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Association has received evidence satisfactory to it 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) For withdrawals of the Authorized Allocation, the Borrower shall furnish to the Association a request or requests for a deposit or deposits which do not exceed the aggregate amount of the Authorized Allocation. On the basis of such request or requests, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account such amount or amounts as the Borrower shall have requested. (b) (i) For replenishment of the Special Account, the Borrower shall furnish to the Association re- quests for deposits into the Special Account at such intervals as the Association shall specify. (ii) Prior to or at the time of each such request, the Borrower shall furnish to the Association the documents and other evidence required pursuant to paragraph 4 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account such amount as the Borrower shall have requested and as shall have been shown by said documents and other evidence to have been paid out of the Special Account for eligible expenditures. All such deposits shall be withdrawn by the Association from the Credit Account under the respective eligible Categories, and in the respective equivalent amounts, as shall have been justified by said documents and other evidence. 4. For each payment made by the Borrower out of the Special Account, the Borrower shall, at such time as the Association shall reasonably request, furnish to the Association such documents and other evidence showing that such payment was made exclusively for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Schedule, the Association shall not be required to make further deposits into the Special Account: Page 13 (a) if, at any time, the Association shall have determined that all further withdrawals should be made by the Borrower directly from the Credit Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or (b) once the total unwithdrawn amount of the Credit allocated to the eligible Category less the amount of any outstand- ing special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions with respect to the Project, shall equal the equivalent of twice the amount of the Authorized Allocation. Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to the eligible Category shall follow such procedures as the Association shall specify by notice to the Borrower. Such further withdrawals shall be made only after and to the extent that the Association shall have been satisfied that all such amounts remaining on deposit in the Special Account as of the date of such notice will be utilized in making payments for eligible expenditures. 6. (a) If the Association shall have determined at any time that any payment out of the Special Account: (i) was made for 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 Association, the Borrower shall, promptly upon notice from the Association: (A) provide such additional evidence as the Association may request; or (B) deposit into the Special Account (or, if the Association shall so request, refund to the Association) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association 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 Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to paragraphs 6 (a), (b) and (c) of this Schedule shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions.