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CONFORMED COPY
CREDIT NUMBER 3513 ALB
Development Credit Agreement
(Social Services Delivery Project)
between
ALBANIA
and
INTERNATIONAL DEVELOPMENT ASSOCIATION
Dated July 3, 2001
CREDIT NUMBER 3513 ALB
DEVELOPMENT CREDIT AGREEMENT
AGREEMENT, dated July 3, 2001, between ALBANIA (the Borrower) and INTERNATIONAL 
DEVELOPMENT ASSOCIATION (the Association).
WHEREAS (A) the Borrower, having satisfied itself as to the feasibility and 
priority of the Project described in Schedule 2 to this Agreement, has requested the 
Association to assist in the financing of the Project;
(B)
the Borrower intends to obtain grant financing from the Department for 
International Development of the United Kingdom in an amount of two million five 
hundred thousand Dollars ($2,500,000) (the DFID Grant ) to assist in financing Parts 
A.2, B and C.2 of the Project on the terms and conditions set forth in an agreement to 
be entered into between the Borrower and DFID (the DFID Grant Agreement);
WHEREAS the Association has agreed, on the basis, inter alia, of the foregoing, 
to extend the Credit to the Borrower upon the terms and conditions set forth in this 
Agreement;
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 (as amended through October 6, 
1999), with the modifications set forth below (the General Conditions), constitute an 
integral part of this Agreement:
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(a)
A new paragraph (12) is added to Section 2.01 to read as set forth below, 
and the existing paragraphs (12) through (14) of said Section are accordingly 
renumbered as paragraphs (13) through (15):
"12.
‘Participating Country’ means any country that the Association 
determines meets the requirements set forth in Section 11 of Resolution No. 
194 of the Board of Governors of the Association, adopted on April 8, 1999; 
and ‘Participating Countries’ means, collectively, all such countries." ; and
(b)
The second sentence of Section 5.01 is modified to read:
"Except as the Borrower and the Association shall otherwise agree, no 
withdrawals shall be made: (a) on account of expenditures in the territories 
of any country which is not a Participating Country 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)
"Beneficiary" means any community, organization or agency eligible for 
assistance under the Project;
(b)
"Eligible Categories" means categories (1) through (4) set forth in the 
table in Part A.1 of Schedule 1 to this Agreement;
(c)
"Eligible Expenditures" means the expenditures for goods and services 
referred to in Section 2.02 of this Agreement;
(d)
"GASS" means the General Administration of Social Services, which is an 
agency within the Ministry of Labor and Social Affairs of the Borrower;
(e)
"Implementing Agency" means any community-based organization or agency 
identified by a Beneficiary to be responsible for implementation of a Sub-project on 
behalf of a Beneficiary;
(f)
"MIS" means the Management Information System, including software, 
established by the Borrower to provide the current data on the Project monitoring 
indicators and implementation progress; 
(g)
"Operations Manual" means the manual, satisfactory to the Association, 
setting forth the implementation rules and procedures for the Project, including 
selection criteria for the sub-projects and provision of grants for community-based 
social care services and the functioning of the PCU; 
(h)
"PCU" means the Project Coordination Unit, established and maintained by 
the Borrower within the GASS pursuant to the provision of paragraph 7 of Schedule 4 to 
this Agreement for the purposes of Project management;
(i)
"Project Management Report" means each report prepared in accordance with 
Section 4.02 of this Agreement;
(j)
"Regional Approval Committee" means the committee to be organized in 
every participating region involving representatives from each regional government, 
beneficiary community and civil society; 
(k)
"Special Account" means the account referred to in Part B of Schedule 1 
to this Agreement; and
(l)
"Sub-project" means a set of activities to be carried out by an 
Implementing Agency in utilization of assistance made available to a Beneficiary.
ARTICLE II
The Credit
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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 seven million nine hundred thousand Special Drawing 
Rights (SDR 7,900,000).
Section 2.02. 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 and to be financed out of the 
proceeds of the Credit.
Section 2.03. The Closing Date shall be March 31, 2008 or such later date as the 
Association shall establish. The Association shall promptly notify the Borrower of 
such later date.
Section 2.04. (a) The Borrower shall pay to the Association a commitment charge 
on the principal amount of the Credit not withdrawn from time to time at a rate to be 
set by the Association as of June 30 of each year, but not to exceed the rate of 
one-half of one percent (1/2 of 1%) per annum.
(b)
The commitment charge shall accrue: (i) from the date sixty days after 
the date of this Agreement (the accrual date) to the respective dates on which amounts 
shall be withdrawn by the Borrower from the Credit Account or canceled; 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 
semiannually on January 15 and July 15 in each year.
Section 2.07. (a)  Subject to paragraphs (b), (c) and (d) below, the Borrower 
shall repay the principal amount of the Credit in semiannual installments payable on 
each January 15 and July 15 commencing July 15, 2011 and ending January 15, 2041. Each 
installment to and including the installment payable on January 15, 2021 shall be one 
percent (1%) of such principal amount, and each installment thereafter shall be two 
percent (2%) of such principal amount.
(b)
Whenever: (i) the Borrower’s per capita gross national product (GNP), as 
determined by the Association, shall have exceeded for three consecutive years  the 
level established annually by the Association for determining eligibility to access 
the Association's resources; 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 
repayment of installments under paragraph (a) above by: (A) 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; and (B) requiring the Borrower to commence 
repayment of the principal amount of the Credit as of the first semiannual payment 
date referred to in paragraph (a) above falling six months or more after the date on 
which the Association notifies the Borrower that the events set out in this paragraph 
(b) have occurred, provided, however, that there shall be a grace period of a minimum 
of five years on such repayment of principal.
(c)
If so requested by the Borrower, the Association may revise the 
modification referred to in paragraph (b) above 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.
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(d)
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 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 administrative and financial 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 Operations Manual and the 
Implementation Program set forth in Schedule 4 to this Agreement.
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 9.06 of the General Conditions and 
without limitation thereto, 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 a financial management system, 
including records and accounts, and prepare financial statements in a format 
acceptable to the Association, adequate to reflect the operations, resources and 
expenditures related to the Project.
(b)
The Borrower shall:
(i)
have the records, accounts and financial statements referred to in 
paragraph (a) of this Section and the records and accounts for the 
Special Account for each fiscal year audited, in accordance with 
auditing standards acceptable to the Association, 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 copies of the financial statements referred to in 
paragraph (a) of this Section for such year as so audited; and (B) 
an opinion on such statements, records and accounts and report of 
such audit, by said auditors, of such scope and in such detail as 
the Association shall have reasonably requested; and
(iii)
furnish to the Association such other information concerning such 
records and accounts, and the audit thereof, and concerning said 
auditors, as the Association may from time to time reasonably 
request.
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(c)
For all expenditures with respect to which withdrawals from the Credit 
Account were made on the basis of Project Management Reports or statements of 
expenditure, the Borrower shall:
(i)
maintain or cause to be maintained, in accordance with paragraph 
(a) of this Section, records and separate accounts reflecting such 
expenditures;
(ii)
retain, until at least one year after the Association has received 
the audit report 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 Project Management Reports or 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. (a) Without limitation upon the provisions of Section 4.01 of this 
Agreement, the Borrower shall carry out a time-bound action plan acceptable to the 
Association for the strengthening of the financial management system referred to in 
paragraph (a) of said Section 4.01 in order to enable the Borrower, not later than 
September 30, 2001, or such later date as the Association shall agree, to prepare 
quarterly Project Management Reports, acceptable to the Association, each of which:
(i)
(A) sets forth actual sources and applications of funds for the 
Project, both cumulatively and for the period covered by said 
report, and projected sources and applications of funds for the 
Project for the six-month period following the period covered by 
said report; and (B) shows separately expenditures financed out of 
the proceeds of the Credit during the period covered by said 
report and expenditures proposed to be financed out of the 
proceeds of the Credit during the six-month period following the 
period covered by said report;
(ii)
(A) describes physical progress in Project implementation, both 
cumulatively and for the period covered by said report; and (B) 
explains variances between the actual and previously forecast 
implementation targets; and
(iii)
sets forth the status of procurement under the Project and 
expenditures under contracts financed out of the proceeds of the 
Credit, as at the end of the period covered by said report.
(b)
Upon the completion of the action plan referred to in paragraph (a) of 
this Section, the Borrower shall prepare, in accordance with guidelines acceptable to 
the Association, and furnish to the Association not later than 45 days after the end 
of each calendar quarter a Project Management Report for such period.
ARTICLE V
Remedies of the Association
Section 5.01. Pursuant to Section 6.02 (1) of the General Conditions, the 
following additional events are specified:
(a)
The Operations Manual shall have been amended, suspended, abrogated, 
repealed or waived, or other legal provisions shall have been enacted, so as to affect 
materially and adversely, in the opinion of the Association, the carrying out of the 
Project. 
(b)
The right of the Borrower to withdraw the proceeds of the DFID Grant made 
to the Borrower for the financing Parts A.2, B and C.2 of the Project shall have been 
suspended, canceled or terminated in whole or in part, pursuant to the terms of the 
DFID Grant Agreement; provided, however, that the provisions of this paragraph shall 
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not apply if the Borrower establishes to the satisfaction of the Association that: (i) 
such suspension, cancellation or termination is not caused by the failure of the 
Borrower to perform any of its obligations under such agreement; and (ii) adequate 
funds for the Project are available to the Borrower from other sources on terms and 
conditions consistent with the obligations of the Borrower under this Agreement.
Section 5.02. Pursuant to Section 7.01 (h) of the General Conditions, the 
following additional events are specified, namely, that any events specified in 
Section 5.01 of this Agreement shall occur.
ARTICLE VI
Effective Date; Termination
Section 6.01. The following events are specified as additional condition to the 
effectiveness of the Development Credit Agreement within the meaning of Section 12.01 
(b) of the General Conditions, namely, that the Borrower has approved budgetary 
allocations adequate for the first year of Project implementation.
Section 6.02. 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 VII
Representative of the Borrower; Addresses
Section 7.01. The 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
Bulevardi "Deshmoret e Kombit"
Tirana
Albania
Facsimile:
355 42 28494
For the Association:
International Development Association
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address:
Telex:
Facsimile:
INDEVAS
248423 (MCI) or
(202) 477-6391
Washington, D.C.
 64145 (MCI)
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.
ALBANIA
By /s/ Fatos Tarifa
Authorized Representative
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INTERNATIONAL DEVELOPMENT ASSOCIATION
By /s/ Christiaan Poortman
Acting Regional Vice President
Europe and Central Asia
SCHEDULE 1
Withdrawal of the Proceeds of the Credit
A. General
1.
The table below sets forth the Categories of items to be financed out of the 
proceeds of the Credit, the allocation of the amounts of the Credit to each Category 
and the percentage of expenditures for items so to be financed in each Category:
Amount of the
Credit Allocated
   % of
(Expressed in Expenditures
Category
SDR Equivalent)
to be Financed
(1)
Works 
(a)
for Part C.1
   1,740,000
85%
of the Project
(b)
other than Part C.1    160,000
75%
of the Project
(2)
Goods
(a)
for Part C.1
   1,500,000
100% of foreign
of the Project
expenditures,
100% of local
(b)
other than Part C.1    320,000
expenditures (ex-factory
cost) and 85% of local 
expenditures for other
items procured locally
(3)
Consultants’ Services
100%
and Training
(a)
for Part C.1 of the 
   1,770,000
Project
(b)
other than Part C.1  1,220,000 
of the Project
(4)
Incremental 
     790,000
90%
Operating Costs
(5)
Unallocated
     400,000
TOTAL
7,900,000
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 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; and
(c)
the term "incremental operating costs" means incremental expenses 
incurred by the PCU on account of Project implementation, management and monitoring, 
including salaries of PCU staff, excluding those of civil servants, communications, 
maintenance and operation of the equipment and office supplies for the Project, 
training and study tours, studies and field trip expenditure for staff in GASS and the 
Ministry of Labor and Social Affairs, related to project implementation and 
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monitoring.
3.
Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be 
made in respect of:
(a)
payments made for expenditures prior to the date of this Agreement; and
(b)
payments made for expenditures under Category (3) (b) for consultants’ 
services and training, unless the DFID Grant Agreement shall have become effective.
4.
The Association may require withdrawals from the Credit Account to be made on 
the basis of statements of expenditure for expenditures: (i) for goods under contracts 
costing less than $25,000, (ii) for works under contracts costing less than $20,000; 
(iii) for services under contracts for consulting firms costing less than $50,000 
equivalent each; (iv) for services under contracts for individual consultants costing 
less than $10,000 equivalent each; and (v) incremental operating costs and training, 
under such terms and conditions as the Association shall specify by notice to the 
Borrower.
B.
Special Account
1.
The Borrower shall open and maintain in Dollars a special deposit account, on 
terms and conditions satisfactory to the Association, including appropriate protection 
against set-off, seizure and attachment.
2.
After the Association has received evidence satisfactory to it that the Special 
Account has been opened, withdrawals from the Credit Account of amounts to be 
deposited into the Special Account shall be made as follows:
(a)
until the Association shall have received: (i) the first Project 
Management Report referred to in Section 4.02(b) of this Agreement; and (ii) a request 
from the Borrower for withdrawal on the basis of Project Management Reports, 
withdrawals shall be made in accordance with the provisions of Annex A to this 
Schedule 1; and
(b)
upon receipt by the Association of a Project Management Report pursuant 
to Section 4.02(b) of this Agreement, accompanied by a request from the Borrower for 
withdrawal on the basis of Project Management Reports, all further withdrawals shall 
be made in accordance with the provisions of Annex B to this Schedule 1.
3.
Payments out of the Special Account shall be made exclusively for Eligible 
Expenditures. 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.
4.
Notwithstanding the provisions of Part B.2 of this Schedule, the Association 
shall not be required to make further deposits into the Special Account:
(a)
if the Association determines at any time that any Project Management 
Report does not adequately provide the information required pursuant to Section 4.02 
of this Agreement;
(b)
if the Association determines at any time that all further withdrawals 
should be made by the Borrower directly from the Credit Account; or
(c)
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: (A) the records and accounts for the Special Account; or (B) 
the records and accounts reflecting expenditures with respect to which withdrawals 
were made on the basis of Project Management Reports.
5.
The Association shall not be required to make further deposits into the Special 
Account in accordance with the provisions of Part B.2 of this Schedule 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 Section 6.02 of the General Conditions. Upon such notification, the 
Association shall determine, in its sole discretion, whether further deposits into the 
Special Account may be made and what procedures should be followed for making such 
deposits, and shall notify the Borrower of its determination.
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6.
(a)
If the Association determines at any time that any payment out of the 
Special Account was made for an expenditure which is not an Eligible Expenditure, or 
was not justified by the evidence furnished to the Association, the Borrower shall, 
promptly upon notice from the Association, provide such additional evidence as the 
Association may request, or 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.  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 determines at any time that any amount outstanding in 
the Special Account will not be required to cover payments for Eligible Expenditures 
during the six-month period following such determination, 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 sub-paragraphs (a), (b) or 
(c) of this paragraph 6 shall be credited to the Credit Account for subsequent 
withdrawal or for cancellation in accordance with the provisions of the Development 
Credit Agreement.
Annex A to SCHEDULE 1
Operation of Special Account
When Withdrawals Are Not Made
On the Basis of Project Management Reports
1.
For the purposes of this Annex:
(a)
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 2 of this Annex; 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 equal or 
exceed the equivalent of SDR 2,000,000.
2.
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 in the aggregate do not exceed the Authorized Allocation.  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.
(b)
For replenishment of the Special Account, the Borrower shall furnish to 
the Association requests for deposit into the Special Account at such intervals as the 
Association shall specify. 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 
Part B.3 of Schedule 1 to this Agreement 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. Each such deposit into the Special Account shall be 
withdrawn by the Association from the Credit Account under one or more of the Eligible 
Categories.
3.
The Association shall not be required to make further deposits into the Special 
Account, once the total unwithdrawn amount of the Credit minus the total amount of all 
outstanding special commitments entered into by the Association pursuant to Section 
5.02 of the General Conditions, 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 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 
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utilized in making payments for Eligible Expenditures.
Annex B to SCHEDULE 1
Operation of Special Account
When Withdrawals Are Made
On the Basis of Project Management Reports
1
Except as the Association may otherwise specify by notice to the Borrower, all 
withdrawals from the Credit Account shall be deposited by the Association into the 
Special Account in accordance with the provisions of Schedule 1 to this Agreement. 
Each such deposit into the Special Account shall be withdrawn by the Association from 
the Credit Account under one or more of the Special Account’s Eligible Categories.
2.
Each application for withdrawal from the Credit Account for deposit into the 
Special Account shall be supported by a Project Management Report.
3.
Upon receipt of each application for withdrawal of an amount of the Credit, the 
Association shall, on behalf of the Borrower, withdraw from the Credit Account and 
deposit into the Special Account an amount equal to the lesser of: (a) the amount so 
requested; and (b) the amount which the Association has determined, based on the 
Project Management Report accompanying said application, is required to be deposited 
in order to finance Eligible Expenditures during the six-month period following the 
date of such report; provided, however, that the amount so deposited, when added to 
the amount indicated by said Project Management Report to be remaining in the Special 
Account, shall not exceed the equivalent of $500,000.
SCHEDULE 2
Description of the Project
The objective of the Project is to improve standards of living of the poor and 
vulnerable population of the Borrower through: (i) increasing their access to 
effective social care services; and (ii) assisting the Borrower to develop effective 
social care policy and improve its capacity for delivery and monitoring of social care 
services.
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:
Policy Development
1.
Provision of equipment, training and consultants’ services to support the 
institutional framework and capacity development of the Borrower to collect, analyze 
and disseminate reliable and timely statistical information at the household level for 
poverty monitoring and evaluation of social programs.
2. 
Provision of training and Consultants’ services for development of capacity of 
the Borrower for policy development, including: (a) establishment of standards for 
social care services, and monitoring of such standards; (b) dissemination of public 
information to raise awareness and outreach programs on social exclusion problems; (c) 
development of legal and regulatory framework and definition of responsibilities for 
monitoring and administration of social care services; (d) development of sustainable 
financing system and framework for donor participation and coordination in financing 
community-based social care services.
3. 
Provision of consultants’ services and training to support the effective 
utilization of the current pension policy modeling tools and assess possible reform 
options.
Part B:
Monitoring and Administration of Social Services
1. 
Provision of equipment, consultants’ services and training to improve the 
Borrower’s capacity for monitoring and administering of community-based social 
services.
2. 
Provision of consultants’ services and training to enhance the Borrower’s 
capacity for social work training and develop a system for regular training of social 
workers for community-based social services.
Part C:
Community-based Social Services
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1. 
Provision of grants for Sub-projects to establish community-based social 
services for targeted population groups based on the eligibility criteria set forth in 
the Operations Manual, and the Sub-project Selection Procedure and Criteria set forth  
in Schedule 5 of this Agreement.
2. 
Provision of consultants’ services and training to local governments and service 
providers for management of community-based social services, social work and case 
management. 
Part D:
Project Management and Monitoring
Provision of equipment, training, consultants’ services and incremental 
operating costs to assist effective implementation of Project activities and 
development of the Project monitoring and information management system. 
* * *
The Project is expected to be completed by September 30, 2007.
SCHEDULE 3
Procurement and Consultants’ Services
Section I.
Procurement of Good and Works
Part A:
General
1.
Goods and works shall be procured in accordance with (a) 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 and August 1996, 
September 1997 and January 1999 (the Guidelines) and the provisions of the following 
Parts of this Section I.
2.
In paragraphs 1.6 and 1.8 of the Guidelines, the references to "Bank member 
countries" and "member country" shall be deemed to be references, respectively, to 
"Participating Countries" and "Participating Country".
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 and works to be procured under 
contracts awarded in accordance with the provisions of paragraph 1 of this Part 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.
Part C:
Other Procurement Procedures
1.
National Competitive Bidding
Works estimated to cost less than $100,000 equivalent per contract, up to an 
aggregate amount not to exceed $2,200,000 equivalent, may be procured under contracts 
awarded in accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines.
2.
International Shopping
Goods estimated to cost less than $100,000 equivalent per contract, up to an 
aggregate amount not to exceed $1,000,000 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.
3.
National Shopping
Goods estimated to cost less than $25,000 equivalent per contract, up to an 
aggregate amount not to exceed $1,000,000 equivalent, may be procured under contracts 
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awarded on the basis of national shopping procedures in accordance with the provisions 
of paragraphs 3.5 and 3.6 of the Guidelines.
4.
Procurement from UN Agencies
As an alternative to shopping procedures, procurement of goods maybe arranged 
through the Inter-Agency Procurement Services Office (IAPSO) of the United Nations 
Development Program (UNDP), in accordance with paragraph 3.9 of the Guidelines. 
Office equipment and vehicles may be procured from Interagency Procurement Services 
Office in accordance with the provisions of paragraph 3.9 of the Guidelines.
5.
Procurement of Small Works
Works estimated to cost less than $20,000 equivalent per contract, up to an 
aggregate amount not to exceed $500,000 equivalent, may be procured under lump-sum, 
fixed-price contracts awarded on the basis of quotations obtained from three (3) 
qualified domestic contractors in response to a written invitation. The invitation 
shall include a detailed description of the works, including basic specifications, the 
required completion date, a basic form of agreement acceptable to the Association, and 
relevant drawings, where applicable. The award shall be made to the contractor who 
offers the lowest price quotation for the required work, and who has the experience 
and resources to complete the contract successfully.
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
(a)
With respect to each contract under Part B, with respect to the first 
five contracts under paragraph 1 of Part C and with respect to the first three 
contracts under paragraph 5 of Part C, the procedures set forth in paragraphs 2 and 3 
of Appendix 1 to the Guidelines shall apply.
(b)
With respect to the first three contracts under paragraphs 2 and 3 of 
Part C, the following procedures shall apply:
(i)
prior to the selection of any supplier under shopping procedures, 
the Borrower shall provide to the Association a report on the 
comparison and evaluation of quotations received;
(ii)
prior to the execution of any contract procured under shopping 
procedures, the Borrower shall provide to the Association a copy 
of the specifications and the draft contract; and
(iii)
the procedures set forth in paragraphs 2(f), 2(g) 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
Part A:
General
1.
Consultants’ services shall be procured in accordance with: (a) the provisions 
of the Introduction and Section IV of the "Guidelines:  Selection and Employment of 
Consultants by World Bank Borrowers" published by the Association in January 1997 and 
revised in September 1997 and January 1999, subject to the modifications thereto set 
forth in paragraph 2 of this Part A (the Consultant Guidelines); and (b) the 
provisions of the following Parts of this Section II.
2.
In paragraph 1.10 of the Consultant Guidelines, the references to "Bank member 
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countries" and "member country" shall be deemed to be references, respectively, to 
"Participating Countries" and "Participating Country".
Part B:
Quality- and Cost-based Selection
Except as otherwise provided in Part C of this Section, consultants’ services 
shall be procured under contracts awarded in accordance with the provisions of Section 
II of the Consultant Guidelines, paragraph 3 of Appendix 1 thereto, Appendix 2 
thereto, and the provisions of paragraphs 3.13 through 3.18 thereof applicable to 
quality- and cost-based selection of consultants.
Part C:
Other Procedures for the Selection of Consultants 
1.
Selection Based on Consultants’ Qualifications
Services for development of standards, planning, capacity building and case 
management administration estimated to cost less than $100,000 equivalent per contract 
may be procured under contracts awarded in accordance with the provisions of 
paragraphs 3.1 and 3.7 of the Consultant Guidelines.
2.
Individual Consultants
Services for tasks that meet the requirements set forth in paragraph 5.1 of the 
Consultant Guidelines shall be procured under contracts awarded to individual 
consultants in accordance with the provisions of paragraphs 5.1 through 5.3 of the 
Consultant Guidelines.
Part D:
Review by the Association of the Selection of Consultants
1.
Selection Planning
Prior to the issuance to consultants of any requests for proposals, the proposed 
plan for the selection of consultants under 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 Consultant Guidelines.  Selection of all consultants’ 
services shall be undertaken in accordance with such selection plan as shall have been 
approved by the Association, and with the provisions of said paragraph 1.
2.
Prior Review
(a)
With respect to each contract for the employment of consulting firms for 
Part B and paragraph 1 of Part C, the procedures set forth in paragraphs 1, 2 (other 
than the third subparagraph of paragraph 2(a)) and 5 of Appendix 1 to the Consultant 
Guidelines shall apply.
(b)
With respect to the first five contracts for the employment of individual 
consultants for paragraph 2 of Part C, the qualifications, experience, terms of 
reference and terms of employment of the consultants shall be furnished to the 
Association for its prior review and approval.  The contract shall be awarded only 
after the said approval shall have been given.
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 Consultant Guidelines shall 
apply.
SCHEDULE 4
Implementation Program
1.
The Borrower shall:
(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 and the achievement of the objectives 
thereof;
(b)
prepare, under terms of reference satisfactory to the Association, and 
furnish to the Association, on or about September 30, 2004, 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 
Page  14
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  December 31, 2004, 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’s views on the 
matter.
2.
The Borrower shall prepare and submit to the Association an annual work program 
for the Project by March 1 in each year.
3.
The Borrower shall:
(a)
complete a first beneficiary assessment and submit to the Association by 
December 31, 2003, a beneficiary impact assessment report; and
(b)
carry out a beneficiary impact assessment every 2 years and submit to the 
Association by June 30 in the following year a beneficiary impact assessment report.
4.
The Borrower shall:
(a)
complete the first procurement and technical audit and submit to the 
Association by December 31, 2004, the procurement and technical audit report; and 
(b)
carry out the final procurement and technical audit and submit to the 
Association by April 30, 2007.
5.
The Borrower shall, by December 31, 2001, amend its Decision No. 52 dated August 
8, 1996 in respect of General Administration of Social Services in order to redefine 
the role of GASS in the monitoring and administering of such services.
6.
The Borrower shall, by October 31, 2001, install the first version of the MIS 
software.
7.
The Borrower shall annually make allocations required for the Project in its 
fiscal budget during implementation of the Project.
8.
The Borrower shall maintain, until completion of the Project, the PCU, with 
resources, staff and terms of reference satisfactory to the Association.
SCHEDULE 5
Sub-project Selection Procedure and Criteria
1.
The central GASS and the PCU shall be responsible for the selection of the 
proposals for Sub-projects.
2.
The regional office of GASS shall launch a promotion campaign, followed by the 
publication of request of proposals for Sub-projects in collaboration with the 
regional governments to invite municipalities, private sector and NGOs to submit their 
proposals for social services.
3.
The applicant shall meet the pre-selection criteria set forth in the Operations 
Manual with regard to: (a) compliance with documentation requirement; (b) groups of 
intended beneficiaries; (c) type of projects eligible for funding; and (d) amount and 
cofinancing requirement. The local government shall contribute at least 10 % of the 
investment cost and 100% of the recurrent cost of the Sub-project.
4.
The regional office of GASS shall evaluate the proposals based on the following: 
(a) the impact to society; (b) institutional capacity to implement the service 
intended by the Sub-project; (c) financing viability; and (d) technical and 
environmental safety.
5.
The regional office of GASS shall forward the report summarizing the evaluation 
of proposals to the central GASS and the PCU.
6.
The PCU will register the results in the Project MIS and forward the summary 
report to the Regional Approval Committee for the final approval of selected proposals 
for Sub-projects. 
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