Conformed Copy - C2916 - Ecodevelopment Project - Global Environment Facility Trust Fund Grant Agreement

Page 1 CONFORMED COPY GEF TRUST FUND GRANT NUMBER TF028479 IN GEF Trust Fund Grant Agreement Related to Credit Number 2916 IN Global Environment Facility Trust Fund Grant Agreement (Ecodevelopment Project) between INDIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT acting as an Implementing Agency of the Global Environment Facility Dated September 30, 1996 GEF TRUST FUND GRANT NUMBER TF028479 IN GEF Trust Fund Grant Agreement related to Credit Number 2916 IN GLOBAL ENVIRONMENT FACILITY TRUST FUND GRANT AGREEMENT AGREEMENT, dated September 30, 1996 between INDIA, acting by its President (the Recipient) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank) acting as an implementing agency of the Global Environment Facility (GEF) in respect of grant funds provided to the Global Environment Facility Trust Fund (GEF Trust Fund) by certain members of the Bank as participants of the GEF. WHEREAS (A) the Bank, pursuant to Resolution No. 91-5 of March 14, 1991, of the Executive Directors of the Bank, established the GEF to assist in the protection of the global environment and promote thereby environmentally sound and sustainable economic development; (B) following the restructuring of the GEF, such arrangements are continued in place on the basis set forth in Resolution No. 94-2 (Resolution No. 94-2) of the Executive Directors of the Bank, dated May 24, 1995, establishing the GEF Trust Fund; (C) the Recipient, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to the Development Credit Agreement, has requested assistance from the resources of the GEF in the financing of the Project, and the Bank has determined that Page 2 such assistance would be in accordance with the provisions of Resolution No. 94-2 referred to above; (D) The Recipient has also requested the International Development Association (the Association) to provide additional funds towards the financing of the Project described in Schedule 2 to the Development Credit Agreement, and by an agreement of even date herewith between the Recipient (therein referred to as the Borrower) and the Association, the Association has agreed to provide such assistance in an aggregate principal amount equivalent to nineteen million five hundred thousand Special Drawing Rights (SDR 19,500,000) (the Credit). (E) Parts A, B, C and D of the Project will be carried out by the States of Bihar, Gujarat, Karnataka, Kerala, Madhya Pradesh, Rajasthan and West Bengal (the Project States), with the Recipient's assistance, and as part of such assistance, the Recipient will make available to the Project States part of the proceeds of the GEF Trust Fund Grant as provided in this Agreement; and WHEREAS the Bank has agreed, on the basis, inter alia, of the foregoing, to extend a GEF Trust Fund Grant (the Grant) to the Recipient upon the terms and conditions set forth in this Agreement and in the Project Agreement of even date herewith among the Associa- tion, the Bank and the Project States; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. (a) The following provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated January 1, 1985, with the modifications set forth in paragraph (b) of this Section (the "General Conditions") constitute an integral part of this Agreement: (i) Article I; (ii) Sections 2.01 (1), (2), (3), (4), (6), (8), (9), (10), (11), (15), (18) and (20); 2.02 and 2.03; (iii) Section 3.01; (iv) Section 4.01 and the first sentence of Section 4.09; (v) Article V; (vi) Sections 6.01, 6.02 (a), (c), (d), (e), (f), (i) and (k), 6.03, 6.04 and 6.06; (vii) Section 8.01 (b); (viii) Sections 9.01 (a) and (c), 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09; (ix) Sections 10.01, 10.03 and 10.04; (x) Article XI; and (xi) Sections 12.01 (c); 12.03, and 12.04. (b) The General Conditions shall be modified as follows: (i) a new paragraph shall be added to the end of Section 2.01 to read as follows: "the term "Special Drawing Rights" and the symbol "SDR" mean special drawing rights as valued by the International Monetary Fund in accordance with its Articles of Agreement"; (ii) the term "Bank", wherever used in the General Conditions, other than in Sections 2.01 (8) and 6.02 (f) thereof and Page 3 the last use of such term in Section 5.01 thereof, means the Bank except that in Section 6.02, the term "Bank" shall also include the International Bank for Recon- struction and Development acting in its own capacity; (iii) the term "Borrower", wherever used in the General Conditions, means the Recipient; (iv) the term "Loan Agreement", wherever used in the General Conditions, means this Agreement; (v) the term "Loan" and "loan" wherever used in the General Conditions, means the Grant; (vi) the term "Loan Account" wherever used in the General Conditions, means the Grant Account; (vii) the second sentence of Section 5.01 is modified to read: "Except as the Bank and the Recipient shall otherwise agree, no withdrawals shall be made: (a) on account of expenditures in the territories of any country which is not a member of the Bank or for goods produced in, or services supplied from, such territories; or (b) for the purpose of any payment to persons or entities, or for any import of goods, if such payment or import, to the knowledge of the Bank, is prohibited by a decision of the United Nations Security Council taken under Chapter VII of the Charter of the United Nations"; and (viii) a new subparagraph is added after subparagraph (j) in Section 6.02 of the General Conditions, as follows: "an extraordinary situation shall have arisen in which any further disbursement under the Grant would exceed the resources available for disbursement from the GEF Trust Fund." Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions, the Recitals to this Agreement, and the Development Credit Agreement (as such term is defined hereinafter) have the respective meanings therein set forth, and the following terms have the following meanings: (a) "Development Credit Agreement" means the agreement, of even date herewith, between the Recipient (therein referred to as the Borrower) and the International Development Association in respect of the Ecodevelopment Project, as such agreement may be amended from time to time, and as such term includes all schedules and agreements supplemental to the Development Credit Agreement; and (b) "Grant Special Account" means the account referred to in Section 2.02 (b) of this Agreement. ARTICLE II The Grant Section 2.01. The Bank agrees to make available to the Recipient, on the terms and conditions set forth or referred to in this Agreement, the Grant in an amount in various currencies equivalent to thirteen million nine hundred thousand Special Drawing Rights (SDR 13,900,000). Section 2.02. (a) The amount of the Grant may be withdrawn from the Grant Account in accordance with the provisions of Schedule 1 to this Agreement for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for carrying out the Project and to be financed out of the proceeds of the Grant. (b) The Recipient may, for the purposes of the Project, open and maintain in dollars a special deposit account in the Reserve Bank of India on terms and conditions satisfactory to the Bank. Deposits into, Page 4 and payments out of, the Grant Special Account shall be made in accordance with the provisions of Schedule 2 to this Agreement. Section 2.03. The Closing Date shall be June 30, 2002, or such later date as the Bank shall establish. The Bank shall promptly notify the Recipient of such later date. ARTICLE III Execution of the Project Section 3.01. (a) Subject to paragraph (b) of this Section, Sections 3.01, 3.02 and 4.01 of the Development Credit Agreement and Schedules 2, 3 and 5 thereto, except Part F and the references to Part F thereof, are incorporated in the Grant Agreement, with the following modifications in said Sections and Schedules 2, 3 and 5 unless the context otherwise requires: (i) the term "Association" shall be read as "Bank"; (ii) the term "Credit" and "Credit Account" shall be read as "Grant" and "Grant Account"; and (iii) the term "this Agreement" shall be read as "the Development Credit Agreement". (b) So long as any part of the Credit provided for under the Development Credit Agreement shall remain outstanding, and unless the Recipient has been notified otherwise by the Bank: (i) all actions taken, including approvals given, by the Association pursuant to any of the Sections of, and Schedules to, the Development Credit Agreement enumerated in paragraph (a) of this Section shall be deemed to be taken or given in the name and on behalf of both the Association and the Bank; and (ii) all information or documentation furnished by the Borrower to the Association pursuant to the provisions of any of such Sections of the Development Credit Agreement or Schedules thereto shall be deemed to be furnished to both the Association and Bank. Section 3.02. The Recipient and the Bank hereby agree that the obligations set forth in Sections 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09 of the General Conditions (relating to insurance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition, respectively) in respect of Parts A, B, C and D of the Project shall be carried out by the Project States pursuant to Section 2.03 of the Project Agreement. ARTICLE IV Remedies of the Bank Section 4.01. Pursuant to Section 6.02 (k) of the General Conditions, the events set out in Section 5.01 of the Development Credit Agreement are specified as additional events, provided, however, that the term "Association" wherever it appears in such Section shall be read as "Bank". ARTICLE V Effective Date; Termination Section 5.01. The following event is specified as an additional condition to the effectiveness of this Agreement within the meaning of Section 12.01 (c) of the General Conditions, namely that all conditions precedent to the effectiveness of the Development Credit Agreement have been fulfilled. Section 5.02. The date ninety (90) days after the date of this Page 5 Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.03. This Agreement shall continue in effect until the Grant has been fully disbursed and the parties to this Agreement have fulfilled all their obligations hereunder. Section 5.04. If the Development Credit Agreement terminates prior to the termination of this Agreement, the provisions of the Development Credit Agreement referred to in this Agreement shall continue in full force and effect between the Recipient and the Bank. ARTICLE VI Representative of the Recipient; Addresses Section 6.01. The Minister of Finance of the Recipient is designated as representative of the Recipient for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Recipient: Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi, India Cable address: Telex: ECOFAIRS 353-3166175 New Delhi For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 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. INDIA By /s/ Sudhakar Rao Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND DEVELOPMENT acting as an implementing agency of the Global Environment Facility Page 6 By /s/ Heinz Vergin Acting Regional Vice President South Asia SCHEDULE 1 Withdrawal of the Proceeds of the Grant 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Grant, the allocation of the amounts of the Grant to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Grant Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Civil works for Parts A, 1,900,000 40% C, D and E of the Project (2) Equipment, materials, 700,000 50% of foreign vehicles and draft expenditures, 50% of animals for Parts A, local expenditures B (a), C, D and E of the (ex-factory cost) Project and 40% of local expenditures for other items procured locally (3) Civil works, equipment, 6,600,000 37% materials and livestock for Parts B (b) and B (c) of the Project (4) Consultants' services 4,000,000 50% (including NGO's services), training and workshops for Parts A, B, C, D and E of the Project (5) Project management 200,000 40% travel costs (6) Unallocated 500,000 _________ TOTAL 13,900,000 ========== 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Recipient for goods or services supplied from the territory of any country other than that of the Recipient; (b) the term "local expenditures" means expenditures in the currency of the Recipient or for goods or services supplied from the territory of the Recipient; and (c) the term "Project management travel costs" means the travel costs by the staff of the Forest Departments of the Project States and MOEF in connection with management and supervision of the Project. 3. Notwithstanding the provisions of paragraph 1 above, no with- drawals shall be made in respect of payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not to exceed SDR 1,400,000 may be made on account Page 7 of payments made for expenditures before that date but after December 31, 1995. 4. The Bank may require withdrawals from the Grant Account to be made on the basis of statements of expenditure for expenditures for (a) goods and works under contracts not exceeding $100,000 equi- valent; (b) services under contracts not exceeding $100,000 equivalent for employment of consulting firms and $50,000 equivalent for employ- ment of individual consultants, respectively; (c) training and fellowships; (d) Project management travel costs; and (e) works procured under direct contracting, force account, or community participation, all under such terms and conditions as the Bank shall specify by notice to the Recipient. SCHEDULE 2 Grant Special Account 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (1), (2), (3), (4) and (5) 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 Grant 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 $2,000,000 to be withdrawn from the Grant Account and deposited in the Special Account pursuant to paragraph 3 (a) of this Schedule, provided, however, that, unless the Bank shall otherwise agree, the Authorized Allocation shall be limited to an amount equivalent to $1,500,000 until the aggregate amount of withdrawals from the Grant Account plus the total amount of all outstanding special commitments entered by the Bank pursuant to Section 5.02 of the General Conditions shall be equal to or exceed the equivalent of SDR 3,500,000. 2. (a) Payments out of the Grant Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. (b) Each payment (including a payment under a letter of credit) for an eligible expenditure in an amount equal to or less than the equivalent of $500,000 shall be made exclusively out of the Grant Special Account. The Bank may from time to time, by notice to the Recipient, revise the threshold amount specified in the preceding sentence. 3. After the Bank has received evidence satisfactory to it that the Grant Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Grant Special Account shall be made as follows: (a) For withdrawals of the Authorized Allocation, the Recipient shall furnish to the Bank 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 Bank shall, on behalf of the Recipient, withdraw from the Grant Account and deposit in the Grant Special Account such amount or amounts as the Bank shall have requested. (b) (i) For replenishment of the Grant Special Account, the Recipient shall furnish to the Bank requests for deposits into the Grant Special Account at such intervals as the Bank shall specify. (ii) Prior to or at the time of each such request, the Recipient shall furnish to the Bank the documents and other evidence required pursuant to paragraph 4 Page 8 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Bank shall, on behalf of the Recipient, withdraw from the Grant Account and deposit into the Grant Special Account such amount as the Recipient shall have requested and as shall have been shown by said documents and other evidence to have been paid out of the Grant Special Account for eligible expenditures. All such deposits shall be withdrawn by the Bank from the Grant 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 Recipient out of the Grant Special Account, the Recipient shall, at such time as the Bank shall reasonably request, furnish to the Bank 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 Bank shall not be required to make further deposits into the Special Account: (a) if, at any time, the Bank shall have determined that all further withdrawals should be made by the Recipient directly from the 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 (b) if the Recipient shall have failed to furnish to the Bank, within the period of time specified in Section 4.01 (b) (ii) of this Agreement, any of the audit reports required to be furnished to the Bank pursuant to said Section in respect of the audit of the records and accounts for the Grant Special Account; (c) if, at any time, the Bank shall have notified the Recipient of its intention to suspend in whole or in part the right of the Recipient to make withdrawals from the Grant Account pursuant to the provisions of Section 6.02 of the General Conditions; and (d) once the total unwithdrawn amount of the Grant allocated to the eligible Categories, minus the total amount of all outstanding special commitments entered into by the Bank 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 Grant Account of the remaining unwith- drawn amount of the Grant allocated to the eligible Categories shall follow such procedures as the Bank shall specify by notice to the Recipient. Such further withdrawals shall be made only after and to the extent that the Bank shall have been satisfied that all such amounts remaining on deposit in the Grant Special Account as of the date of such notice will be utilized in making payments for eligible expenditures. 6. (a) If the Bank shall have determined at any time that any payment out of the Grant 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 Bank, the Recipient shall, promptly upon notice from the Bank: (A) provide such additional evidence as the Bank may request; or (B) deposit into the Grant Special Account (or, if the Bank shall so request, refund to the Bank) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. Unless the Bank shall otherwise agree, no further deposit by the Bank into the Grant Special Account shall be made until the Recipient has provided such evidence or made such deposit or refund, as the case may be. (b) If the Bank shall have determined at any time that any Page 9 amount outstanding in the Grant Special Account will not be required to cover further payments for eligible expenditures, the Recipient shall, promptly upon notice from the Bank, refund to the Bank such outstanding amount. (c) The Recipient may, upon notice to the Bank, refund to the Bank all or any portion of the funds on deposit in the Grant Special Account. (d) Refunds to the Bank made pursuant to paragraphs 6 (a), (b) and (c) of this Schedule shall be credited to the Grant Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions.