Conformed Copy - C2088 - The Alleviation of Poverty and Social Costs of Adjustment Project - Agreement

Page 1 CONFORMED COPY AGREEMENT RELATED TO CREDIT NUMBER 2088 UG Agreement (The Alleviation of Poverty and the Social Costs of Adjustment Project) between THE GOVERNMENT OF SWEDEN and INTERNATIONAL DEVELOPMENT ASSOCIATION for the Administration of Certain Funds to be made available by THE SWEDISH INTERNATIONAL DEVELOPMENT COOPERATION AGENCY Dated August 22, 1996 AGREEMENT RELATED TO CREDIT NUMBER 2088 UG AGREEMENT AGREEMENT, dated August 22, 1996, between the GOVERNMENT OF SWEDEN (Sweden) represented by the SWEDISH INTERNATIONAL DEVELOPMENT COOPERATION AGENCY (SIDA) and the INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) to provide for the administration, by the Association, of certain funds to be made available by Sweden to the Republic of Uganda (Uganda). WHEREAS: (A) the agreement, dated February 26, 1988, between Sweden and the Association provides the framework for cofinancing of development projects by the parties thereto; (B) SIDA wishes to make available to Uganda a grant not exceeding thirteen million Swedish Kroner (SEK 13,000,000), (the Grant) to assist Uganda in financing the Veterans Assistance Component described in Part G of the Project for the Alleviation of Poverty and the Social Costs of Adjustment (the Project) referred to in the Development Credit Agreement (Credit 2088-UG) dated February 8, 1990, between Uganda and the Asso- ciation, as amended in an exchange of letters dated September 4, 1992 and September 14, 1992 (the Development Credit Agreement); and (C) SIDA wishes that the proceeds of the Grant should be incremental to the proceeds of the Development Credit Agreement and extended for the same purposes by the Association pursuant to the Development Credit Agreement. Page 2 WHEREAS, the Association has agreed, on the basis, inter alia, of the foregoing, to administer the Grant upon the terms and conditions herein- after set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Section 1.01. The Association, as administrator on behalf of SIDA, shall review and approve requests submitted by Uganda to finance the reasonable costs of goods and services required during the execution of Part G of the Project in accordance with the relevant provisions of Schedule 1 to the Development Credit Agreement, except that (a) the pro- ceeds of the Grant may be used to finance 100 percent of expenditures both local and foreign, including cash payments to veterans; and (b) the amount to be withdrawn shall not be repaid and shall bear no interest or other charges. Section 1.02. The Association, as administrator on behalf of SIDA, shall have the sole responsibility for the supervision of the Project. 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 Sweden in respect thereof. ARTICLE II Section 2.01. (a) For the purpose of this Agreement, SIDA shall deposit the Grant amount of thirteen million Swedish kroner (SEK 13,000,000) into the International Bank for Reconstruction and Development (IBRD) Cash Account "T" (No. IBRDSEK2) which is maintained with Sveriges Riksbank (the T-account). When making deposits, SIDA shall: (i) instruct Sveriges Riksbank to: (A) advise the Association's Cash Management Department as to the amount received; (B) specify it is for the Alleviation of Poverty and the Social Costs of Adjustment - Veterans Assistance Project No. 25651; and (C) specify the date of the deposit; and (ii) FAX a copy of any payments instructions to Sveriges Riksbank to the Office of the Trust Funds Administrator in the Association utilizing FAX No. 202-522-3397. (b) The funds in the T-account shall be freely exchangeable by the Association with other currencies as may facilitate their administration. Section 2.02. The Association shall disburse from the T-account such amounts as, from time to time, shall be needed to meet the reasonable costs of goods and services financed, or to be financed, pursuant to Section 1.01 of this Agreement. Such disbursement shall be effected on the basis of withdrawal applications for eligible expenditures submitted by Uganda to the Association, in accordance with the Association's normal procedures for withdrawal of proceeds of credits made by the Association. Section 2.03. In order to assist in the defrayment of the costs of administration and other expenses incurred by the Association under this Agreement, the Association may invest and reinvest the funds pending their disbursement. The Association shall credit all income from such investment on a monthly basis to a separate investment income trust fund, which may also be invested. Except as SIDA and the Association may Page 3 otherwise agree, the Association may deduct from such investment income and retain for its own account an amount equal to two percent (2%) of the amounts deposited by SIDA under this Agreement. SIDA will periodically instruct the Association regarding application of any balance in such investment income trust fund following such deduction to the benefit of either this project, other projects funded by SIDA or to the effect that it be refunded to SIDA. If the amount in such investment income trust fund in any year is less than the amount the Association is entitled to retain under the agreement, SIDA will, upon request from the Association, pay such remaining amount to the Association. Section 2.04. The Closing Date shall be December 31, 1996, or such later date as the Association shall establish. The Association shall promptly notify Uganda of such later date. ARTICLE III Section 3.01. (a) The Association shall maintain separate records and accounts in respect of the funds in the T-Account disbursed by the Association pursuant to the provisions of this Agreement. (b) The Association will provide SIDA annually a management assertion together with an attestation from the Association's external auditors on the satisfactory performance of the procedures and controls used by the Association in administering trust funds. The costs of such attestations shall be borne by the Association. In addition, upon the request of SIDA, the Association shall cause the financial statement for the Project to be audited by the Association's external auditors and shall forward a copy of the auditors report to SIDA. The cost of such audit shall be met by SIDA through the Investment Income Trust Fund. ARTICLE IV Section 4.01. SIDA and the Association shall consult, from time to time, at the request of each other on all matters arising out of this Agreement. Section 4.02. The Association shall keep SIDA informed of the progress of the Project. To that end, the Association shall furnish to SIDA all relevant progress, performance and assessment reports related to the Project. Section 4.03. The Association shall inform SIDA of any forthcoming major missions and meetings in connection with the Project and shall afford representatives of SIDA the opportunity to participate in such missions and meetings . Section 4.04. The Association shall inform SIDA of any proposed significant modification to the Development Credit Agreement and shall afford SIDA a reasonable opportunity to exchange view with the Asso- ciation before effecting any such modification. ARTICLE V Section 5.01. This Agreement shall become effective upon signature, and subject to the provisions of this article, shall continue in effect until all funds made available under this Agreement have been disbursed from the T-Account to Uganda and all other formalities incidental thereto have been completed. Section 5.02. If at any time it appears to either party that the purposes of this Agreement can no longer effectively or appropriately be carried out, this Agreement may be terminated at the initiative of such party on ninety days' (90 days) notice in writing. Section 5.03. Upon termination of this Agreement, unless the parties Page 4 agree on another course of action, any funds of SIDA held hereunder by the Association shall be returned to SIDA, and the Association's administration shall be considered terminated. ARTICLE VI Section 6.01. The Swedish International Development Cooperation Agency, SIDA, shall be competent to represent Sweden for the application of this Agreement. Section 6.02. This Agreement may be amended only by written agreement of the parties hereto. Section 6.03. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement 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 by mail, telegram, cable, telex or facsimile 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 addresses as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: FOR SWEDEN: Swedish International Development Cooperation Agency S-105 25 Stockholm Sweden Telephone: 8-698-5181 Telefax: 8-698-5643 Telex: SIDA 11450 FOR THE ASSOCIATION: International Development Association 1818 H. Street, N.W. Washington, D.C. 20433 United States of America Cable Address: Telex: INDEVAS 248423 (MCI) Washington, D.C. 64145 (MCI) IN WITNESS WHEREOF, the undersigned duly authorize hereto, have signed this Agreement. GOVERNMENT OF SWEDEN By /s/ Sten Rylander Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION Page 5 By /s/ Callisto Madavo Regional Vice President Africa