Loan Number 4033 RU
LOAN AGREEMENT
(MEDICAL EQUIPMENT PROJECT)
BETWEEN RUSSIAN FEDERATION AND INTERNATIONAL BANK
FOR RECONSTRUCTION AND DEVELOPMENT
(Washington, 27.VIII.1996)
Agreement, dated August 27, 1996, between Russian Federation
(the Borrower) and International Bank for Reconstruction and
Development (the Bank).
Whereas the Borrower, having satisfied itself as to the
feasibility and priority of the Project described in Schedule 2 to
this Agreement, has requested the Bank to assist in the financing
of the Project; and
Whereas the Bank has agreed, on the basis, inter alia, of the
foregoing, to extend the Loan 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 Loan and
Guarantee Agreements for Single Currency Loans" of the Bank, dated
May 30, 1995, (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 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; and
(b) "Project Preparation Advance" means the project preparation
advance granted by the Bank to the Borrower pursuant to two
exchanges of letters dated August 2, 1995 and September 6, 1995
and dated March 4, 1996 and April 2, 1996 between the Borrower and
the Bank;
(c) "MOHMI" means the Borrower's Ministry of Health and Medical
Industry;
(d) "PPIU" means the Project Preparation and Implementation
Unit, established and operating within the Borrower's Ministry of
Finance pursuant to a Regulation signed by the Deputy Minister of
Finance, the Deputy Minister of Economy and the Deputy Minister of
Health and Medical Industry, dated March 15, 1996;
(e) "Working Group" means the Interministerial Working Group
for the Establishment of the National Health Accounts System,
established pursuant to the Order signed by the First Deputy Prime
Minister, dated March 23, 1996 and headed by MOHMI;
(f) "Participating Oblast" means any oblast of the Borrower in
whose territory health facilities are located which are included,
under Part A of the Project; and
(g) "Participating Oblast Commitment" means the letter of
commitment received by the Borrower, from each Participating
Oblast according to the provisions of paragraph 2 of Schedule 5 to
this Agreement.
Article II
The Loan
Section 2.01. The Bank agrees to lend to the Borrower, on the
terms and conditions set forth or referred to in the Loan
Agreement an amount equal to two hundred seventy million dollars
(270,000,000 USD).
Section 2.02. (a) The amount of the Loan may be withdrawn from
the Loan 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 the Project described in Schedule 2 to this
Agreement and to be financed out of the proceeds of the Loan.
(b) The Borrower may, for the purposes of the Project, open and
maintain in Dollars a special deposit account in a commercial bank
on terms and conditions satisfactory to the Bank, 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 Bank shall, on
behalf of the Borrower, withdraw from the Loan 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 canceled.
Section 2.03. The Closing Date shall be June 30, 1999 or such
later date as the Bank shall establish. The Bank shall promptly
notify the Borrower of such later date.
Section 2.04. The Borrower shall pay to the Bank a commitment
charge at the rate of three-fourths of one percent (3/4 of 1%) per
annum on the principal amount of the Loan not withdrawn from time
to time.
Section 2.05. (a) The Borrower shall pay interest on the
principal amount of the Loan withdrawn and outstanding from time
to time, at a rate for each Interest Period equal to LIBOR Base
Rate plus LIBOR Total Spread.
(b) For the purposes of this Section:
(i) "Interest Period" means the initial period from and
including the date of this Agreement to, but excluding, the first
Interest Payment Date occurring thereafter, and after the initial
period, each period from and including an Interest Payment Date
to, but excluding the next following Interest Payment Date.
(ii) "Interest Payment Date" means any date specified in
Section 2.06 of this Agreement.
(iii) "LIBOR Base Rate" means, for each Interest Period, the
London interbank offered rate for six-month deposits in Dollars
for value the first day of such Interest Period (or, in the case
of the initial Interest Period, for value the Interest Payment
Date occurring on or next preceding the first day of such Interest
Period), as reasonably determined by the Bank and expressed as a
percentage per annum.
(iv) "LIBOR Total Spread" means, for each Interest Period:
(A) one half of one percent (1/2 of 1%);
(B) minus (or plus) the weighted average margin, for such
Interest Period, below (or above) the London inter- bank offered
rates, or other reference rates, for six-month deposits, in
respect of the Bank's outstanding borrowings or portions thereof
allocated by the Bank to fund single currency loans or portions
thereof made by it that include the Loan; as reasonably determined
by the Bank and expressed as a percentage per annum.
(c) The Bank shall notify the Borrower of LIBOR Base Rate and
LIBOR Total Spread for each Interest Period, promptly upon the
determination thereof.
(d) Whenever, in light of changes in market practice affecting
the determination of the interest rates referred to in this
Section 2.05, the Bank determines that it is in the interest of
its borrowers as a whole and of the Bank to apply a basis for
determining the interest rates applicable to the Loan, the Bank
may modify the basis for determining the interest rates applicable
to the Loan upon not less than six (6) months' notice to the
Borrower of the new basis. The basis shall become effective on the
expiry of the notice period unless the Borrower notifies the Bank
during said period of its objection thereto, in which case said
modification shall not apply to the Loan.
Section 2.06. Interest and other charges shall be payable April
15 and October 15 in each year.
Section 2.07. The Borrower shall repay the principal amount of
the Loan in accordance with the amortization schedule set forth in
Schedule 3 to this Agreement.
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 Part A of the Project
through the PPIU and Part B, under the overall coordination of the
PPIU, through the Working Group with due diligence and efficiency
and in conformity with appropriate administrative, financial and
public 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 Bank shall
otherwise agree, the Borrower shall cause the PPIU to carry out
Part A of the Project in accordance with the Implementation
Program set forth in Schedule 5 to this Agreement.
Section 3.02. Except as the Bank shall otherwise agree,
procurement of the goods and consultants' services required for
the Project and to be financed out of the proceeds of the Loan
shall be governed by the provisions of Schedule 4 to this
Agreement.
Section 3.03. For the purposes of Section 9.08 of the General
Conditions and without limitation thereto, the Borrower shall:
(a) prepare, on the basis of guidelines acceptable to the Bank,
and furnish to the Bank 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 Bank, a plan for the future operation
of the Project; and
(b) afford the Bank 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 Accounts for each
fiscal year audited, in accordance with appropriate auditing
principles consistently applied, by independent auditors
acceptable to the Bank;
(ii) furnish to the Bank as soon as available, but in any case
not later than six (6) months after the end of each such year, the
report of such audit by said auditors, of such scope and in such
detail as the Bank shall have reasonably requested; and
(iii) furnish to the Bank such other information concerning
said records and accounts and the audit thereof as the Bank shall
from time to time reasonably request.
(c) For all expenditures with respect to which withdrawals from
the Loan 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 Bank has
received the audit report for the fiscal year in which the last
withdrawal from the Loan Account was made. all records (contracts,
orders, invoices, bills, receipts and other documents) evidencing
such expenditures;
(iii) enable the Bank'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.
Article V
Remedies of the Bank
Section 5.01. Pursuant to Section 6.02 (1) of the General
Conditions, the following additional event is specified, namely,
that a Participating Oblast has failed to comply with the
provisions of the respective Participating Oblast Commitment.
Section 5.02. Pursuant to Section 7.01 (h) of the General
Conditions, the following additional event is specified, namely
that the event specified in Section 5.01 of this Agreement shall
occur and shall continue for a period of 30 days after notice
thereof shall have been given by the Bank to the Borrower.
Article VI
Termination
Section 6.01. 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 VII
Representative of the Borrower; Addresses
Section 7.01. The Minister of Finance or the Deputy Minister of
Finance of the Borrower is designated as representative of the
Borrower for the purposes of Section 11.03 of the General
Conditions.
Section 7.02. The following addresses are specified for the
purposes of Section 11.01 of the General Conditions:
For the Borrower:
Ministry of Finance
Ilyinka Street 9
103097 Moscow
Russian Federation
Telex:
112008
For the Bank:
International Bank for
Reconstruction and Development
1818H 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.
SCHEDULE 1
WITHDRAWAL OF THE PROCEEDS OF THE LOAN
1. The table below sets forth the Categories of items to be
financed out of the proceeds of the Loan, the allocation of the
amounts of the Loan to each Category and the percentage of
expenditures for items so to be financed in each Category:
--------------------------T------------------T-------------------¬
¦ Category ¦ Amount of the ¦ % of ¦
¦ ¦ Loan Allocated ¦ Expenditures ¦
¦ ¦ (Expressed in ¦ to be Financed ¦
¦ ¦Dollar Equivalent)¦ ¦
+-------------------------+------------------+-------------------+
¦(1) Medical ¦ 254,000,000 ¦100% of foreign ¦
¦ equipment under ¦ ¦expenditures, ¦
¦ Part A of the ¦ ¦100% of local ¦
¦ Project and ¦ ¦expenditures ¦
¦ computer equipment ¦ ¦(ex-factory ¦
¦ under Part B ¦ ¦cost) and 70% ¦
¦ of the Project ¦ ¦local expenditures ¦
¦ ¦ ¦for other items ¦
¦ ¦ ¦procured locally ¦
¦ ¦ ¦ ¦
¦(2) Consolidation ¦ 2,000,000 ¦100% of foreign ¦
¦ and forwarding ¦ ¦expenditures ¦
¦ services ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(3) Consultants' ¦ 6,000,000 ¦100% ¦
¦ services and ¦ ¦ ¦
¦ training, ¦ ¦ ¦
¦ including ¦ ¦ ¦
¦ fellowships ¦ ¦ ¦
¦ and study ¦ ¦ ¦
¦ tours ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(4) Operating cost ¦ 1,000,000 ¦100% ¦
¦ of the PPIU ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(5) Refunding of ¦ 2,000,000 ¦Amount due ¦
¦ Project Preparation ¦ ¦pursuant to ¦
¦ Advance ¦ ¦Section 2.02 (c) ¦
¦ ¦ ¦of this Agreement ¦
¦ ¦ ¦ ¦
¦(6) Unallocated ¦ 5,000,000 ¦ ¦
¦ ¦ ¦ ¦
¦ TOTAL ¦ 270,000,000 ¦ ¦
L-------------------------+------------------+--------------------
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;
(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;
(c) the term "medical equipment" means medical equipment,
including spare parts and supplies financed out of the proceeds of
the Loan and being subject to the applicable certification
requirements of the institutes authorized for certification
purposes;
(d) the term "operating cost of the PPIU" means expenditures on
account of the Project of the PPIU for salaries, office
accommodations, supplies and minor equipment, utilities, staff
travel, and training; and
(e) the term "consolidation and forwarding services" means
services pertaining to the provision of warehouse space, receipt
and inspection of goods, insurance in the Borrower's territories
and transport to health facilities included in the Project.
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 Bank may require, under such terms and conditions as the
Bank shall specify to the Borrower, withdrawals from the Loan
Account to be made on the basis of statements of expenditure for
expenditures:
(i) under Category (1) under contracts for goods costing less
than 300,000 USD equivalent;
(ii) under Category (3) under contracts for technical services
and the employment of consulting firms costing less than 100,000
USD equivalent;
(iii) under Category (3) under contracts for the employment of
individual consultants costing less than 50,000 USD equivalent;
and
(iv) for operating cost of the PPIU under such terms and
conditions as the Bank shall specify.
SCHEDULE 2
DESCRIPTION OF THE PROJECT
The objectives of the Project are to:
(i) increase the availability and range of services provided by
primary and secondary health facilities in Participating Oblasts;
and
(ii) improve the analytical framework of the health sector
through the establishment of national health accounts.
The Project consists of the following parts, subject to such
modifications thereof as the Borrower and the Bank may agree upon
from time to time to achieve such objectives:
Part A
Provision of medical equipment, related supplies, and spare
parts and related training to selected primary (polyclinics,
women's clinics and feldsher stations) and secondary (raion
hospitals and maternity homes) health care facilities in about 34
oblasts to enable such facilities to provide primary and
preventive health care and to diagnose and treat more effectively
cardiovascular disease, trauma and cancer and to strengthen their
prenatal care program.
Part B
Development and implementation of a system of national health
accounts and provision of consultants services, study tours,
computer equipment and software therefor.
The Project is expected to be completed by December 31, 1998.
SCHEDULE 3
AMORTIZATION SCHEDULE
------------------------------------T----------------------------¬
¦ Date Payment Due ¦ Payment of Principal ¦
¦ ¦(expressed in Dollars) <*> ¦
+-----------------------------------+----------------------------+
¦On each April 15 and October 15 ¦ ¦
¦ ¦ ¦
¦ beginning October 15, 2001 ¦ ¦
¦ through April 15, 2013 ¦ 11,250,000 ¦
L-----------------------------------+-----------------------------
--------------------------------
<*> The figures in this column represent the amount in Dollars
to be repaid, except as provided in Section 4.04 (d) of the
General Conditions.
SCHEDULE 4
PROCUREMENT AND CONSULTANTS'SERVICES
Section I. PROCUREMENT OF GOODS AND TECHNICAL SERVICES
Part A
General
Goods 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 and revised in
January 1996 (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 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) Preference for domestically manufactured goods
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.
(b) Notification and Advertising
The invitation to prequalify or bid for each contract estimated
to cost 10,000,000 USD equivalent or more shall be advertised in
accordance with the procedures applicable to large contracts under
paragraph 2.8 of the Guidelines.
Part C
Other Procurement Procedures
1. Limited International Bidding
Specialized equipment, including endoscopic and ultrasonic
medical equipment up to an aggregate amount not to exceed
19,400,000 USD equivalent, and consolidation and forwarding
services, up to an aggregate amount of 13,500,000 USD equivalent,
which the Bank agrees can only be obtained 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
Sets of specialized medical instruments estimated to cost less
than 300,000 USD equivalent per contract, up to an aggregate
amount not to exceed 3,400,000 USD equivalent, may be procured
under contracts awarded in accordance with the provisions of
paragraphs 3.3 and 3.4 of the Guidelines.
3. International and National Shopping
(a) Goods estimated to cost less than 300,000 USD equivalent
per contract, up to an aggregate amount not to exceed 4,300,000
USD 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 USD equivalent per
contract, up to an aggregate amount not to exceed 2,000,000 USD,
may be procured under contract awarded on the basis of national
shopping procedures, in accordance with the provisions of
paragraphs 3.5 and 3.6 of the Guidelines.
4. Direct Contracting
Goods which are of a proprietary nature and must be procured
from a particular supplier may, with the Bank's prior agreement,
up to an aggregate amount of 7,100,000 USD, be procured in
accordance with the provisions of paragraph 3.7 of the Guidelines.
5. Procurement from UN Agencies
Medical equipment and supplies may be procured from UNICEF or
other UN Agencies in accordance with the provisions of paragraph
3.9 of the Guidelines.
Part D
Review by the Bank of Procurement Decisions
1. Procurement Planning
Prior to the issuance of any invitations to prequalify for
bidding or to bid for contracts, the proposed procurement plan for
the Project shall be furnished to the Bank for its review and
approval, in accordance with the provisions of paragraph 1 of
Appendix 1 to the Guidelines. Procurement of all goods shall be
undertaken in accordance with such procurement plan as shall have
been approved by the Bank, and with the provisions of said
paragraph 1.
2. Prior Review
With respect to each contract processed in accordance with
Parts B, C.1, C.4 and C.5 of this Schedule and the first two
contracts processed in accordance with Parts C.2 and C.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
thereto as shall have been agreed by the Bank. Where no relevant
standard contract documents have been issued by the Bank, other
standard forms acceptable to the Bank shall be used.
2. Notwithstanding the provisions of paragraph 1 of this
Section, the provisions of the Consultant Guidelines requiring
prior Bank 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
USD equivalent each or (b) contracts for the employment of
individual consultants estimated to cost less than 50,000 USD
equivalent each. However, said exceptions to prior Bank 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 Bank, (d)
amendments to contracts for the employment of consulting firms
raising the contract value to 100,000 USD equivalent or above, or
(e) amendments to contracts for the employment of individual
consultants raising the contract value to 50,000 USD equivalent or
above.
SCHEDULE 5
IMPLEMENTATION PROGRAM
1. During execution of the Project, the Borrower shall:
(i) maintain the PPIU with adequate authority to carry out its
responsibilities under the Project; and
(ii) employ, at all times, a director as head of the PPIU with
adequate qualifications and experience assisted by competent staff
in adequate numbers.
2. The PPIU shall, in consultation with MOHMI and each
Participating Oblast, establish the list of medical equipment and
other goods to be provided under Part A of the Project, specify
the training to be provided in relation to such equipment, and
promptly inform the Bank prior to the initiation of procurement
actions in accordance with the provisions of Schedule 4 of this
Agreement in respect of any such goods or initiation of any such
training.
3. The PPIU shall initiate procurement actions in accordance
with the provisions of Schedule 4 of this Agreement in respect of
health facilities in any Participating Oblast, only if the
Borrower has received a letter of commitment (the Participating
Oblast Commitment) from the respective Participating Oblast which
shall be acceptable to the Bank and include the undertakings of
the respective Participating Oblast to take all necessary measures
to:
(a) assure that the medical equipment and supplies provided
under the Project shall be installed at the intended facilities
and be used exclusively for the purposes of the Project;
(b) ensure participation of the beneficiary health facilities
in ordering equipment;
(c) provide additional clinical training for staff using the
equipment provided under the Project, where needed;
(d) provide adequate resources for supplies needed to fully
utilize the equipment provided under the Project after the initial
stock has been consumed;
(e) contribute at least 10 percent of the Project costs
applicable to the activities carried out in the respective
Participating Oblast in counterpart funds and finance all
applicable customs duties and taxes;
(f) appoint an oblast-level project coordinator to liaise with
the PPIU; and
(g) submit periodic reports as requested by the PPIU) on the
status of project implementation and utilization of equipment.
4. The Borrower shall take all necessary measures to assure
that the institutes authorized for the certification of medical
equipment shall review the requests from suppliers for
certification of medical equipment and supplies financed out of
the proceeds of the Loan on a priority basis and in conformity
with a time frame agreed upon by the Borrower and the Bank.
SCHEDULE 6
SPECIAL ACCOUNT
1. For the purposes of this Schedule:
(a) the term "eligible Categories" means Categories (1) through
(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 Loan
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 1.5 million USD to be withdrawn from the Loan Account and
deposited into 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 500,000 USD until the aggregate amount of
withdrawals from the Loan Account plus the total amount of all
outstanding special commitments entered into by the Bank pursuant
to Section 5.02 of the General Conditions shall be equal to or
exceed the equivalent of 2.5 million USD.
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 Bank 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 Bank 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 Bank shall, on behalf of the
Borrower, withdraw from the Loan 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 Bank requests for deposits into the Special
Account at such intervals as the Bank shall specify.
(ii) Prior to or at the time of each such request, the Borrower
shall furnish to the Bank 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 Bank shall, on behalf of the
Borrower, withdraw from the Loan 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 Bank
from the Loan 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 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 Borrower directly from
the Loan 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 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 Special Account;
(c) if, at any time, the Bank 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 Loan Account pursuant to the
provisions of Section 6.02 of the General Conditions; or
(d) once the total unwithdrawn amount of the Loan 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 Loan Account of the remaining
unwithdrawn amount of the Loan allocated to the eligible
Categories shall follow such procedures as the Bank shall specify
by notice to the Borrower. 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
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 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 Borrower shall, promptly upon notice from the Bank:
(A) provide such additional evidence as the Bank may request;
or
(B) deposit into the 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 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 Bank 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 Bank, refund to the Bank such
outstanding amount.
(c) The Borrower may, upon notice to the Bank, refund to the
Bank all or any portion of the funds on deposit in the Special
Account.
(d) Refunds to the Bank made pursuant to paragraphs 6 (a), (b)
and (c) of this Schedule shall be credited to the Loan Account for
subsequent withdrawal or for cancellation in accordance with the
relevant provisions of this Agreement, including the General
Conditions.
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