Conformed Copy - C2852 - Health Project - Development Credit Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2852 GE Development Credit Agreement (Health Project) between GEORGIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated May 9, 1996 CREDIT NUMBER 2852 GE DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated May 9, 1996, between GEORGIA (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS (A) The Association has received a Statement of Development Objectives (SDO) dated February 14, 1996 from the Borrower describing a program of actions, objectives and policies in the health sector; (B) 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 (C) 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; 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, with the modifications thereof set forth below (the General Conditions) constitute Page 2 an integral part of this Agreement: (a) The last sentence of Section 3.02 is deleted. (b) The second sentence of Section 5.01 is modified to read: "Except as the Association and the Borrower 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 Association 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 Association, is prohibited by a decision of the United Nations Security Council taken under Chapter VII of the Charter of the United Nations." Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Local Contribution Account" means the account to be opened in accordance with the provisions of Section 5.01 (b) of this Agreement; (b) "MOH" means the Borrower's Ministry of Health; (c) "PCU" means the Project Coordination Unit, established within MOH referred to in paragraph 1 of Schedule 4 to this Agreement; (d) "Programs" means health promotion and preventive programs to be carried out under Part A.2 of the Project and which are eligible for financing out of the proceeds of the Credit; (e) "Project Preparation Advance" means the project preparation advance granted by the Bank to the Borrower pursuant to an exchange of letters dated July 3, 1995 and August 21, 1995 between the Borrower and the Association; (f) "SHF" means State Health Fund established pursuant to the Decree No. 400 issued by the Head of State on December 23, 1994; and (g) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement. 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 nine million seven hundred thousand Special Drawing Rights (SDR 9,700,000). 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 may, for the purposes of the Project, open and maintain in U.S. dollars a special deposit account (the Special 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, Page 3 on behalf of the Borrower, withdraw from the Credit Account 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 June 30, 2001 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 (60) 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 restrictions 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, 2006 and ending April 1, 2031. Each installment to and including the installment payable on April 1, 2016 shall be one and one-fourth percent (1-1/4%) of such principal amount, and each installment thereafter shall be two and one-half percent (2-1/2%) 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 consideration 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 Association may, if so requested by the Borrower, further modify the terms of repayment Page 4 to conform to the schedule of installments as provided in paragraph (a) above. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. 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, shall carry out the Project through the PCU with due diligence and efficiency and in conformity with appropriate financial, administrative and health practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) Without limitation upon the provisions of paragraph (a) of this Section and except as the Borrower and the Association shall otherwise agree, the Borrower shall carry out the Project in accordance with the Implementation Program set forth in Schedule 4 to this Agreement. (c) Without limitation upon the provisions of paragraph (a) of this Section, the Borrower shall, in order to ensure the timely availability of the funds required for the Project, maintain the Local Contribution Account within its National Bank and replenish such account in quarterly intervals with such amounts as shall be needed to reestablish a balance in the equivalent of $400,000. Section 3.02. 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 3.03. For the purposes of Section 9.07 of the General Conditions, the Borrower shall: (a) prepare, on the basis of guidelines acceptable to the Association, and furnish to the Association not later than six (6) months after the Closing Date or such later date as may be agreed for this purpose between the Borrower and the Association, a plan for the future operation of the Project; and (b) afford the Association a reasonable opportunity to exchange views with the Borrower on said plan. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a) of this Section, including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association, as soon as available, but in any case not later than six months after the end of each such year, a certified copy of the report of such audit by said auditors, of such scope and in such Page 5 detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, accounts and the audit thereof as the Association 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: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit for the fiscal year in which the last withdrawal 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 included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. Section 4.02. The Borrower shall: (i) take all necessary measures to ensure the financial viability of the SHF without narrowing the scope of the basic benefit package supported by it; and (ii) monitor closely the financial performance of the SHF and prepare quarterly reports in such scope and such detail as the Association shall reasonably request. Section 4.03. (a) The Borrower shall contribute to financing of the Programs from the SHF's budget, provided that the annual aggregate amount of such contribution shall equal 1% of the yearly income of the SHF. (b) For the purpose of this Section, the term "income of the SHF" means its revenues out of the state budget, payroll tax and tax on hazardous products. ARTICLE V Effective Date; Termination Section 5.01. 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) The Borrower has issued regulations setting a ceiling, acceptable to the Association, on new entrants in medical schools, effective for the academic year 1996-97 and thereafter; and (b) The Borrower has opened the Local Contribution Account in its National Bank and deposited an amount equivalent to $400,000 into such account. Section 5.02. 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 VI Page 6 Representative of the Borrower; Addresses Section 6.01. The Ministry of Finance of the Borrower is designated as representative of the Borrower 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 Borrower: Ministry of Finance 70 E. Abashidze St. 380062 Tbilisi Georgia Telex: 212348 MOFIN SV 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. GEORGIA By /s/ Tedo Japaridze Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Basil Kavalsky Acting Regional Vice President Europe and Central Asia 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 Page 7 (1) Civil works 4,100,000 80% (2) Equipment supplies 2,400,000 100% of foreign and vehicles expenditures; 100% of local expenditures (ex- factory cost) and 80 % of local expenditures for other items procured locally (3) Consultants' services, 1,400,000 100% training and study tours (4) Refunding of Project 400,000 Amount due pursuant Preparation Advance Section 2.02 (c) of this Agreement (5) Unallocated 1,400,000 ________ TOTAL 9,700,000 ========= 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 Borrower for goods or services supplied from the territory of any country other than that of the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expenditures prior to the date of this Agreement. 4. The Association may require withdrawals from the Credit Account to be made on the basis of statements of expenditure for expenditures: (a) for works under contracts not exceeding $300,000 equivalent; (b) for goods under contract not exceeding $300,000 equivalent; (c) for services provided by consulting firms under contracts not exceeding $100,000 equivalent; and (d) for services provided by individual consultants under contracts not exceeding $50,000 equivalent, under such terms and conditions as the Association shall specify by notice to the Borrower. SCHEDULE 2 Description of the Project The objective of the Project is to support the health reform efforts initiated by the Borrower to improve the health of the Borrower's population. 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: Health System Reorientation 1. Provision of technical assistance, training and equipment to strengthen the Department of Public Health of MOH and upgrade its facilities. 2. Provision of technical assistance, training, minor equipment and materials, for the carrying out of community-based and national health promotion Programs in the following areas: drug addiction and hepatitis; Page 8 AIDS and sexually-transmitted diseases; cardio-vascular diseases; anti-smoking; family planning; traffic accidents; and other priority areas as identified by MOH. 3. Provision of technical assistance, training, materials and equipment for: (a) the strengthening of the Department of Maternal and Child Health of MOH; (b) development of national policies and guidelines for the care of women and children, including protocols for a minimum benefits package of care, guidelines for health services, guidelines for licensing of staff and accreditation of health services, guidelines for privatizing and reorganizing health services, and establishment of a perinatal mortality surveillance system; (c) organization of the delivery of perinatal care in three localities: Tsageri, Kutaisi and Tbilisi; (d) development of pilot referral systems in Tbilisi and Kutaisi; (e) development of training modules in maternal and child health and residency programs in obstetrics and pediatrics; and (f) creation of a national task force for child and maternal survival. 4. Provision of technical assistance, fellowships, training educational materials and equipment, medical and laboratory equipment, computers and software, vehicles, office equipment and furniture for: (a) reform of the licensing system for health care providers to perform clinical activities and establishment of a data base of registered doctors and nurses; (b) improvement of registration, licensing and inspection of health care facilities through the establishment of a data base of physical resources to ensure quality standards; (c) development of internal quality assurance programs in selected health care institutions; and (d) reorganization of the Department of Pharmaceuticals and Pharmaceutical Industry of MOH and improvement of the registration of products, quality assurance, inspection and information activities. Part B: Rehabilitation and Maintenance of Health Facilities and Equipment Provision of technical assistance, furniture, office and medical equipment, vehicles, computers, software, testing instruments and carrying out of civil works for the: (1) partial rehabilitation of two blocks in Tbilisi City Hospital #2; (2) merger of Kutaisi Maternity and Pediatric Hospital into a single building and partial rehabilitation of their facilities; (3) partial rehabilitation of the facilities of the maternal and prenatal service in the Tsageri District Hospital; (4) reinforcement and modernization of the MOH to improve the setting of standards for programming, design, rehabilitation and construction of health facilities, as well as of the standardization, need identification, setting procurement rules and technology assessment of medical equipment; and (5) training of specialists and hospital staff in facilities design, construction and medical technology. Part C: Development of Health Human Resources Provision of technical assistance, fellowships, training, books and journals, equipment and teaching materials, vehicles, and furniture and carrying out of civil works for the: (1) strengthening of the National Health Management Center to create a system for accrediting medical schools, develop a curriculum for post-graduate physician and nursing education, support the development of professional associations, and develop health service research to support the MOH in policy making; and (2) creation and initial operation of the Center for Continuing Education within the National Health Management Center, carrying out of training programs in continuing health education, development of Page 9 training the trainers activities, creation of a desk-top publishing unit and provision of continuing education for the operational needs of other components of the Project. Part D: Modernizing the Health Financing System Provision of technical assistance, training, equipment and furniture for: (1) development of a management information system and strengthening of the financial procedures and accounting and planning capacity within the SHF and its regional branches; (2) development of accounting and financial management systems, and interface between health care providers and SHF including its regional branches; (3) organization of training in health financing and management, hospital and health management; and (4) collection of data on utilization and expenditures of health services not included in the basic benefits package in order to monitor private expenditure on health and the accessibility and affordability of services. Part E: Assistance in Project Administration Provision of technical assistance and office equipment to the PCU. *** The Project is expected to be completed by June 30, 2000. SCHEDULE 3 Procurement and Consultants' Services Section I. Procurement of Goods and Works Part A: General Goods and works shall be procured in accordance with the provisions of Section I of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in January 1995 (the Guidelines) and the following provisions of this Section, as applicable. Part B: International Competitive Bidding 1. Except as otherwise provided in Part C of this Section, goods and works shall be procured under contracts awarded in accordance with the provisions of Section II of the Guidelines and paragraph 5 of Appendix 1 thereto. 2. The following provisions shall apply to goods to be procured under contracts awarded in accordance with the provisions of paragraph 1 of this Part B: (a) Grouping of contracts To the extent practicable, contracts for goods shall be grouped in bid packages estimated to cost the equivalent of $300,000 or more each. (b) Preference for domestically manufactured goods and domestic contractors The provisions of paragraphs 2.54 and 2.55 of the Guidelines and Appendix 2 thereto shall apply to goods manufactured in the territory of the Borrower, and works to be carried out by domestic contractors. Page 10 Part C: Other Procurement Procedures 1. Limited International Bidding Specialized medical and laboratory equipment, which the Bank agrees can only be purchased from a limited number of suppliers, regardless of the cost thereof, may be procured under contracts awarded in accordance with the provisions of paragraph 3.2 of the Guidelines. 2. National Competitive Bidding Works estimated to cost less than $500,000 equivalent per contract, up to an aggregate amount not to exceed $800,000 equivalent, shall be procured under contracts awarded in accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines and the Borrower shall use the Standard Bidding Documents, Procurement of Works, Smaller Contracts, issued by the Bank in September, 1995 with minimum changes, acceptable to the Bank, as necessary. 3. International and National Shopping (a) Goods estimated to cost less than $300,000 equivalent per contract, up to an aggregate amount not to exceed $500,000 equivalent, may be procured under contracts awarded on the basis of international shopping procedures in accordance with the provisions of paragraphs 3.5 and 3.6 of the Guidelines. (b) Goods estimated to cost less than $50,000 equivalent per contract, up to an aggregate amount not to exceed $300,000 equivalent, may be procured under contracts awarded on the basis of national shopping procedures in accordance with the provisions of paragraphs 3.5 and 3.6 of the Guidelines. Part D: Review by the Association of Procurement Decisions 1. Procurement Planning Prior to the issuance of any invitations to bid for contracts, the proposed procurement plan for the Project shall be furnished to the Association for its review and approval, in accordance with the provisions of paragraph 1 of Appendix 1 to the Guidelines. Procurement of all goods and works shall be undertaken in accordance with such procurement plan as shall have been approved by the Association, and with the provisions of said paragraph 1. 2. Prior Review With respect to each contract estimated to cost the equivalent of $300,000 or more, and the first contract awarded on the basis of international shopping procedures in accordance with paragraph 3(a) of this Schedule, the procedures set forth in paragraphs 2 and 3 of Appendix 1 to the Guidelines shall apply. 3. Post Review With respect to each contract not governed by paragraph 2 of this Part, the procedures set forth in paragraph 4 of Appendix 1 to the Guidelines shall apply. Section II. Employment of Consultants 1. Consultants' services shall be procured under contracts awarded in accordance with the provisions 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 (the Consultant Guidelines). For complex, time-based assignments, such contracts shall be based on the standard form of contract for consultants' services issued by the Bank, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, other standard forms acceptable to the Association shall be used. Page 11 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts shall not apply to (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each or (b) contracts for the employment of individuals estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Association review shall not apply to (a) the terms of reference for such contracts, (b) single-source selection of consulting firms, (c) assignments of a critical nature, as reasonably determined by the Association, (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above, or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. SCHEDULE 4 Implementation Program 1. During execution of the project, the Borrower shall: (i) maintain the PCU with functions and responsibilities acceptable to the Association; (ii) employ, at all times, individuals for the positions of director of the PCU, procurement officers (two positions), financial officer, planning and monitoring officer and administrative assistant, whose experience and qualifications are acceptable to the Association; and (iii) employ, at all times, seven component coordinators whose experience and qualifications are acceptable to the Association. 2. The Borrower shall ensure that the Programs to be carried out under Part A.2 of the Project shall be selected on a competitive basis. 3. By January 1, 1998, the Borrower shall merge the Kutaisi Maternity Hospital into the Kutaisi Pediatric Hospital. 4. The Borrower shall take all necessary actions to implement the activities and fulfill the benchmarks set forth in the Borrower's Statement of Development Objectives (SDO) and shall review with the Association annually all actions with respect to the SDO. 5. The Borrower shall through the PCU: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with indicators satisfactory to the Association, the carrying out of the Project, the achievement of the objectives thereof, and the implementation of the statement of development objectives and report to the Association at least semi-annually on the progress of Project execution; (b) prepare, under terms of reference satisfactory to the Association, and furnish to the Association, on or about June 30, 1998 a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date of said report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Association, by September 30, 1998, or such later date as the Association shall request, the report referred to in paragraph (b) of this Section, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Association views on the matter. SCHEDULE 5 Special Account 1. For the purposes of this Schedule: Page 12 (a) the term "eligible Categories" means Categories (1), (2) and (3) 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, works 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 $500,000 to be withdrawn from the Credit Account and deposited into the Special Account pursuant to paragraph 3 (a) of this Schedule, provided, however, that unless the Association shall otherwise agree, the Authorized Allocation shall be limited to an amount equivalent to $250,000 until the aggregate amount of withdrawals from the Credit Account plus the total amount of all outstanding special commitments entered into by the Association pursuant to Section 5.02 of the General Conditions shall be equal to or exceed the equivalent of SDR 2,000,000. 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 deposit into the Special Account of an amount or amounts 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 requests 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: (a) if, at any time, the Association shall have determined that all further withdrawals should be made by the Borrower directly from Page 13 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; (b) if the Borrower shall have failed to furnish to the Association, 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 Association pursuant to said Section in respect of the audit of the records and accounts for the Special Account; (c) if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to the provisions of Section 6.02 of the General Conditions; or (d) once the total unwithdrawn amount of the Credit allocated to the eligible Categories, minus the total amount of all outstanding special commitments 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 Categories 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.