Page 1 CONFORMED COPY GRANT NUMBER H066 BEN Development Grant Agreement (HIV/AIDS Project for Abidjan-Lagos Transport Corridor) between REPUBLIC OF BENIN and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated November 18, 2003 Page 2 GRANT NUMBER H066 BEN DEVELOPMENT GRANT AGREEMENT AGREEMENT, dated November 18, 2003, between REPUBLIC OF BENIN (the Recipient) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS (A) the Heads of States of the Republics of Benin, Cote d’Ivoire, Ghana, the Federal Republic of Nigeria, and the Minister of Health of the Republic of Togo have signed a Joint Declaration in Cotonou on April 30, 2002, acknowledging the importance of a multi-sectoral and regional approach to the HIV/AIDS epidemic, establishing a Project Governing Body (the “Project Governing Body”) for preparation, supervision, and monitoring activities, and designating the Republic of Benin as Recipient of the Grant on behalf of the five countries of the Abidjan-Lagos corridor; (B) the Recipient, 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; (C) the Executive Directors of the Association approved, on December 20, 2001, the Second Multi-Country HIV/AIDS Program for the Africa Region estimated in the amount of US$500,000,000 over a period of three years; (D) the Project is part of the Second Multi-Sectoral HIV/AIDS Program for the Africa Region; and WHEREAS (E) the Association has agreed, on the basis, inter alia , of the foregoing, to extend the Grant to the Recipient 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 in Schedule 6 to this Agreement (the General Conditions), constitute an integral part of this Agreement. Page 3 - 2 - 2 Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions and in the Recitals to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) “AIDS” means acquired immune deficiency syndrome; (b) “Beneficiary” means a community, group or person, including an NGO (as hereinafter defined), religious organization or private enterprise who or which has met the eligibility criteria set out in the Project Operational Manual (as hereinafter defined) and the requirements of Schedule 4 to this Agreement and as a result, has received, or is entitled to receive, a Sub-Grant (as hereinafter defined) for the carrying out of a Sub- Project (as hereinafter defined); (c) “CFA Francs” or “CFAF” means the currency of the Recipient; (d) “Financial Monitoring Report” or “FMR” means each report prepared in accordance with Section 4.02 of this Agreement; (e) “First Project Year” means the first period of twelve (12) months following the Effective Date of the Project (First Project Year); (f) “HIV” means the human immuno-deficiency virus; (g) “Member State” means any of the signatories to the Additional Protocol to the Joint Declaration of April 30 th 2002 Relating to the Abidjan-Lagos Corridor Organisation for the Fight Against STIs/HIV/AIDS (currently the Republics of Benin, Cote d’Ivoire, Ghana, the Federal Republic of Nigeria, and the Republic of Togo); (h) “NGOs” means nongovernmental organizations established and operating under the laws of the Recipient, the Republics of Cote d’Ivoire, Ghana, Togo, and the Federal Republic of Nigeria; (i) “PLWHA” means People Living With HIV/AIDS; (j) “Project Operational Manual” means the manual referred to in paragraph 3 of Schedule 4 to this Agreement, as the same may be amended from time to time in agreement with the Association, and such term includes any schedules to the Project Operational Manual; (k) “Project Preparation Advance” means the project preparation advance granted by the Association to the Recipient pursuant to the letter agreement signed on behalf of the Association on January 29, 2002 and on behalf of the Recipient on February 12, 2003; Page 4 - 3 - 3 (l) “Second Generation Special Accounts” means any of the accounts in local correspondent banks referred to in Section 2.02(b) of this Agreement, and denominated in either CFAF or Dollars; (m) “Special Accounts” mean the accounts referred to in Section 2.02(b) of this Agreement; (n) “STI” means a sexually transmitted infection; (o) “Sub-Grant” means a sub-grant made, or to be made, out of the proceeds of the Grant to finance a Sub-Project (as herein after defined); (p) “Sub-Grant Agreement” means an agreement to be entered into between the Recipient and a Beneficiary for the provision of a Sub-Grant in accordance with paragraphs 3 and 8 of Schedule 4 to this Agreement; (q) “Sub-Project” means any activity under Part B of the Project, in respect of which a Sub-Grant has been, or may be, provided; and (r) “Waste Management Plan” means the biomedical waste management plan, adopted November 13. 2002, setting out the measures and arrangements necessary to ensure proper management of hazardous waste under the Project. ARTICLE II The Grant Section 2.01. The Association agrees to make available to the Recipient, on the terms and conditions set forth or referred to in this Agreement, an amount in various currencies equivalent to twelve million two hundred thousand Special Drawing Rights (SDR 12,200,000). Section 2.02. (a) The amount of the Grant may be withdrawn from the Grant Account in accordance with the provisions of Schedule 1 to this Agreement for: (i) expenditures made (or if the Association shall so agree, to be made) 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 Grant; or (ii) amounts paid (or, if the Association shall so agree, amounts to be paid) by the Recipient on account of withdrawals made in accordance with a Sub-Grant Agreement for the benefit of a Beneficiary to meet the reasonable costs of goods, works and services required for Sub-Projects to be financed under Part B (2) of the Project, and in respect of which the withdrawal from the Grant Account is requested. (b) The Recipient may, for the purposes of the Project, open and maintain in CFA Francs (the “Special Account A”) and in Dollars (the “Special Account B”) two Page 5 - 4 - 4 separate special deposit accounts in a commercial bank on terms and conditions satisfactory to the Association, including appropriate protection against set-off, seizure or attachment. The Recipient may also open and maintain in Dollars, for project activities in the Republic of Ghana, and the Federal Republic of Nigeria, and in CFAF, for project activit ies in the Republics of Benin and Cote d’Ivoire, Second Generation Special Accounts, in local correspondent banks or branches of the commercial bank referred to above, on terms and conditions satisfactory to the Association. Deposits into, and payments out of, the Special Accounts shall be made in accordance with the provisions of Schedule 5 to this Agreement. (c) Promptly after the Effective Date, the Association shall, on behalf of the Recipient, withdraw from the Grant Account and pay to the Bank 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 July 1, 2007 or such later date as the Association shall establish. The Association shall promptly notify the Recipient of such later date. Section 2.04. (a) The Recipient shall pay to the Association a commitment charge on the principal amount of the Grant 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 Recipient from the Grant 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 2.05 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 Member States; 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. (a) Commitment charges shall be payable semiannually on June 1 and December 1 in each year. Page 6 - 5 - 5 (b) The currency of the French Republic 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 Recipient 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 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 Recipient and the Association shall otherwise agree, the Recipient shall carry out the Project in accordance with the Implementation Program set forth in Schedule 4 to this Agreement. Section 3.02. Except as the Association shall otherwise agree, procurement of the good s, works and consultants’ services required for the Project and to be financed out of the proceeds of the Grant 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 Recipient shall: (a) prepare, on the basis of guidelines acceptable to the Association, and furnish to the Association not later than six (6) months before the Closing Date or such later date as may be agreed for this purpose between the Recipient 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 Recipient on said plan. ARTICLE IV Financial Covenants Section 4.01. (a) The Recipient shall establish and 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. Page 7 - 6 - 6 (b) The Recipient 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 Accounts and Second Generation Special Accounts 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. (c) For all expenditures with respect to which withdrawals from the Grant Account were made on the basis of statements of expenditure, the Recipient shall: (i) maintain or cause to be maintained, in accordance with sound accounting practices, records and separate accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Grant Account was made; and (iii) enable the Association’s representatives to examine such records. Section 4.02. (a) The Recipient shall prepare and furnish to the Association a financial monitoring report, in form and substance satisfactory to the Association, which: (i) sets forth sources and uses of funds for the Project, both cumulatively and for the period covered by said report, showing separately funds provided under the Grant, and explains variances between the actual and planned uses of such funds; Page 8 - 7 - 7 (ii) describes physical progress in Project implementation, both cumulatively and for the period covered by said report, and explains variances between the actual and planned Project implementation ; and (iii) sets forth the status of procurement under the Project, as at the end of the period covered by said report. ( b) The first FMR shall be furnished to the Association not later than 45 days after the end of the first calendar quarter after the Effective Date, and shall cover the period from the incurrence of the first expenditure under the Project through the end of such first calendar quarter; thereafter, each FMR shall be furnished to the Association not later than 45 days after each subsequent calendar quarter, and shall cover such calendar quarter. ARTICLE V Effective Date Section 5.01. The following events are specified as additional conditions to the effectiveness of the Development Grant Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the Recipient has established a financial management and accounting system for the Project, satisfactory to the Association, and has provided satisfactory evidence that financial management reports can be produced; (b) the Recipient has adopted a Project Operational Manual including a Project implementation plan; a financial management manual; and a procurement plan for the implementation of the Project during the First Project Year, all in form and substance satisfactory to the Association; (c) the Recipient has appointed an independent auditor referred to in Section 4.01 (b) of this agreement; and (d) the Recipient has appointed a management agency to support the Executive Secretariat pursuant to Section II of Schedule 3 to this Agreement. 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. Page 9 - 8 - 8 ARTICLE VI Representative of the Recipient; Addresses Section 6.01. The Minister of Finance and Economics of the Recipient is designated as representative of the Recipient for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Recipient: Ministère des Finances et de l’Economie B.P. 302 Cotonou Republic of Benin Cable address: Telex: Telecopy: MINFINANCES 5009 or 5289 MINFIN 229315356301851 Cotonou 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) Page 10 - 9 - 9 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. REPUBLIC OF BENIN By /s/ Cyrille S. Oguin Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Nils O. Tcheyan Authorized Representative Page 11 - 10 - 10 SCHEDULE 1 Withdrawal of the Proceeds of the Grant 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Grant, the allocation of the amounts of the Grant to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Grant Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Works 500,000 90% (2) Consultants’ Services and 2,050,000 Audits 100% (3) Training 1,200,000 (4) (a) Vehicles and 250,000 100% of foreign Equipment expenditures and 90% of local expenditures (b) Drugs, Tests and 1,540,000 100% Medical Supplies (5) Sub-Grants for Sub-Projects 3,800,000 100% of amounts under Part B(2) disbursed of the Project (6) Operating Costs 1,820,000 80% (7) Refunding of 260,000 Amount due Project Preparation pursuant to Section Advance 2.02 (c) of this Agreement (8) Unallocated 780,000 ___________ TOTAL 12,200,000 ========== Page 12 - 11 - 11 2. For the purposes of this Schedule: (a) the term “foreign expenditures” means expenditures in the currency of any country other than that of Member States for goods or services supplied from the territory of any country other than that of Member States; (b) the term “local expenditures” means expenditures in the currency of the Recipient or for goods or services supplied from the territory of Member States; provided, however, that, if the currency of Member States is also that of another country from the territory of which goods or services are supplied, expenditures in such currency for such goods or services shall be deemed to be “foreign expenditures”; and (c) the term “operating costs” means incremental costs incurred under the Project on account of fuel and maintenance for vehicles, equipment operation and maintenance, utilities, office supplies, communication expenses, staff travel, subsistence, workshops, salaries for contractual and temporary staff, management fees, but excluding salaries of officials of Member States’ civil service. 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, except that withdrawals, in an aggregate amount not exceeding the equivalent of SDR 1 000,000, may be made on account of payments made for expenditures before that date but after November 1, 2002; and (b) payments for Sub-Grants unless such Sub-Grants have been made in accordance with the eligibility criteria, procedures and terms and conditions set forth or referred to in the Project Operational Manual and paragraphs 6, 7, and 8 of Schedule 4 to this Agreement. 4. The Association may require withdrawals from the Grant Account to be made on the basis of statements of expenditure for expenditures under contracts for: (a) goods and works costing less than $100,000; (b) services for consulting firms costing less than $100,000; (c) services for individual consultants costing less than $50,000; (d) Sub- Grants for Sub-Projects under Part B (2) of the Project; and (e) operating costs, all under such terms and conditions as the Association shall specify by notice to the Recipient. Page 13 - 12 - 12 SCHEDULE 2 Description of the Project The objectives of the Project are to: (a) contribute to the prevention and reduction of the spread of the HIV/AIDS epidemic along the Abidjan-Lagos corridor; (b) increase access of underserved vulnerable groups along the Abidjan-Lagos corridor to HIV/AIDS prevention, basic treatment, support and care services; and (c) strengthen the capacities of institutions along the Abidjan-Lagos corridor to implement integrated HIV/AIDS information, education and communication and behavioral change policies. The Project consists of the following parts, subject to such modifications thereof as the Recipient and the Association may agree upon from time to time to achieve such objectives: Part A : HIV/AIDS Prevention 1. Development of integrated information policies, principally concerning education, communication and behavioral change for the eight border communities along the Abidjan-Lagos corridor targeted to providers of transport services; users of transport services; local population in contact with travelers and migrants; professional sex workers, immigrants, and immigration, police and customs officials. 2. Procurement and distribution of condoms along the Abidjan-Lagos corridor among the most vulnerable populations, including providers of transport services; users of transport services; local population in contact with travelers and migrants; professional sex workers, immigrants, and immigration, police and customs officials. Part B : HIV/AIDS Treatment, Care and Support 1. Strengthening of public and private health care facilities along the Abidjan-Lagos corridor to provide services in voluntary counseling, and treatment of sexually transmitted infections, and HIV/AIDS opportunistic infections. 2. Implementation of community-based Sub-Projects, aimed at HIV/AIDS prevention, counseling, training, and support to associations of PLWHA, through provision of Sub-Grants to Beneficiaries. 3. Strengthening the capacity of the public sector in HIV/AIDS prevention, counseling, training, and support to associations of PLWHA. 4. Carrying out the Medical Waste Management Plan to dispose of medical waste resulting from Project activities. Part C: Project Coordination, Capacity Building and Policy Development Page 14 - 13 - 13 1. Coordination of activities and facilitation of partnerships along the Abidjan Lagos corridor, consisting of advocacy, development of policies affecting PLWHA, monitoring and evaluation. 2. Addressing customs and immigration barriers to smooth flow of commercial traffic along the Abidjan Lagos corridor, including carrying out of studies to understand delays and costs to traffic, provision of information to the public on documentation required, small infrastructure works at border posts, and assessment and harmonization of customs and immigration operations. 3. Strengthening the capacity of public sector and civil society organizations to develop, carry out, and coordinate local activities, facilitate social mobilization, develop and implement HIV/AIDS prevention. * * * The Project is expected to be completed by January 1, 2007. Page 15 - 14 - 14 SCHEDULE 3 Procurement 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 and revised in January and August 1996, September 1997 and January 1999 (the Guidelines) and the provisions of the following Parts of this Section. 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: Grouping of contracts To the extent practicable, contracts for goods shall be grouped in bid packages estimated to cost $100,000 equivalent or more each. Part C : Other Procurement Procedures 1. National Competitive Bidding Works estimated to cost less than $200,000 equivalent per contract, up to an aggregate amount not to exceed $490,000 equivalent, and goods estimated to cost less than $100,000 equivalent per contract, up to an aggregate amount not to exceed $470,000 equivalent, may be procured under contracts awarded in accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines. 2. International or National Shopping Goods estimated to cost less than $50,000 equivalent per contract, up to an aggregate amount not to exceed $200,000 equivalent, may be procured under contracts awarded on the basis of international or national shopping procedures in accordance with the provisions of paragraphs 3.5 and 3.6 of the Guidelines. Page 16 - 15 - 15 3. Community Participation Goods and works required for Subprojects may be procured in accordance with procedures acceptable to the Association and described in the Project Implementation Manual. 4. Procurement from UN Agencies Contracts for goods required urgently during the first Project Year may be procured from the specialized United Nations Agencies, including United Nations Development Programme, Inter-Agency Procurement Services Office, United Nations Children’s Fund Procurement and Assembly Center, United Nations Population Fund, UNAIDS, or World Health Organization in accordance with the provisions of paragraph 3.9 of the Guidelines. 5. Procurement of Small Works Works estimated to cost less than $50,000 equivalent per contract, up to an aggregate amount not to exceed $240,000 equivalent, may be procured under lump-sum, fixed-price contracts awarded on the basis of quotations obtained from three (3) qualified domestic contractors of the Member States 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 the first three contracts each contract for goods and works, and all contracts for goods and works estimated to cost the equivalent of $100,000 Page 17 - 16 - 16 or more, 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 procured under shopping procedures, 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 Consultants’ services shall be procured in accordance with the provisions of Sections I and IV of the “Guidelines: Selection and Employment of Consultants by World Bank Borrowers” published by the Bank in January 1997 and revised in September 1997, January 1999 and May 2002 (the Consultant Guidelines), paragraph 1 of Appendix 1 thereto, Appendix 2 thereto and the following provisions of this Section. Part B : Quality- and Cost-based Selection 1. 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, and the provisions of paragraphs 3.13 through 3.18 thereof applicable to quality- and cost-based selection of consultants. 2. The following provision shall apply to consultants’ services to be procured under contracts awarded in accordance with the provisions of the preceding paragraph: the short list of consultants for services estimated to cost less than $100,000 equivalent per contract, may comprise entirely national consultants from the Member States in accordance with the provisions of paragraph 2.7 and footnote 8 of the Consultant Guidelines. Page 18 - 17 - 17 Part C : Other Procedures for the Selection of Consultants 1. Selection Based on Consultants’ Qualifications Services estimated to cost less than $50,000 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. Single Source Selection Services may, with the Association’s prior agreement, be procured in accordance with the provisions of paragraphs 3.8 through 3.11 of the Consultant Guidelines. 3. Commercial Practices Services to assist Beneficiaries in carrying out Subprojects and estimated to cost less than $10,000 equivalent may be procured in accordance with commercial practices acceptable to the Association. 4. Individual Consultants Services of individual consultants for tasks that meet the requirements set forth in paragraph 5.1 of the Consultant Guidelines shall be procured under contracts awarded 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 A plan for the selection of consultants, which shall include contract cost estimates, contract packaging, and applicable selection criteria and procedures, shall be furnished to the Association for its review and approval prior to the issuance to consultants of any requests for proposals. Such plan shall be updated every 6 months during the execution of the Project, and each such updating shall be furnished to the Association for its review and approval. Selection of all consultants’ services shall be undertaken in accordance with such selection plan (as updated from time to time) as shall have been approved by the Association. 2. Prior Review (a) With respect to each contract for the employment of consulting firms estimated to cost the equivalent of $100,000 or more, and for the employment of individual consultants estimated to cost the equivalent of $50,000 or more, the procedures set forth in paragraphs 2, 3 and 5 of Appendix 1 to the Consultant Guidelines shall apply. Page 19 - 18 - 18 (b) With respect to each contract for the employment of individual consultants to be selected on a sole source basis, or estimated to cost the equivalent of $50,000 or more, the report on the comparison of the qualifications and experience of candidates, 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. The provisions of paragraph 3 of Appendix 1 to the Consultant Guidelines shall also apply to such contracts. 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. Page 20 - 19 - 19 SCHEDULE 4 Implementation Program A. Overall Project Implementation Oversight 1. The Project Governing Body shall be responsible for supervision and monitoring of Project implementation, and shall consist of representatives of the Ministries responsible for HIV/AIDS and transport of the Recipient, and the Republics of Ghana, Cote d’Ivoire, Togo and the Federal Republic of Nigeria. A representative from Nigeria shall be chair of the Project Governing Body, and a representative from Ghana shall be vice-chair. The Project Governing Body shall meet annually. 2. The Recipient shall host the Executive Secretariat with functions satisfactory to the Association. Staff of the Executive Secretariat shall be appointed by, and under the supervision of the Project Governing Body, with experience and qualifications satisfactory to the Association. 3. The Executive Secretariat shall prepare and furnish to the Association a Project Operational Manual in form and substance satisfactory to the Association, setting out details of: (a) the Project implementation plan; (b) a financial management procedures; (c) Project procurement arrangements; (d) procedures for preparation, appraisal, impelementation and supervision of Community Action Plans; (e) standard formats for Sub-Grant Agreements and Implementation Agreements; and (f) such other administrative, financial, technical and organizational arrangements as shall be required for the Project. 4. Except as the Association shall otherwise agree, the Executive Secretariat shall: (a) apply the criteria, policies, procedures and arrangements set out in the Project Operational Manual and the Biomedical Waste Management Plan; and (b) amend the Project Operational Manual and the Biomedical Waste Management Plan with the consent of the Association. 5. The Executive Secretariat shall supervise and coordinate the overall implementation of the Project in accordance with the provisions of this Agreement and the Project Operational Manual. B. Procedures and Eligibility Criteria for Sub-Projects 6. The Executive Secretariat shall approve the provision of Sub-Grants to finance community-based Sub-Projects in accordance with procedures and criteria set forth in the Project Operational Manual it being understood that: (a) the work plan has been designed in a participatory approach; and (b) the proposed Sub-Project fits into the overall work plan. Page 21 - 20 - 20 7. Sub-Grants shall be provided to Beneficiaries through Sub-Projects to community HIV/AIDS initiatives meeting the criteria set forth in the Project Operational Manual. 8. Sub-Grant Agreements shall include the following terms and conditions: (a) the obligation of the Beneficiary to carry out the Sub-Project in accordance with the Project Operational Manual, with due diligence and efficiency and in accordance with sound technical, financial, environmental and managerial standards and to maintain adequate records to reflect, in accordance with sound accounting practices, the operations, resources and expenditures in respect of the Sub-Projects; (b) the requirement that: (i) the goods, works and services to be financed from the proceeds of the Sub-Grant shall be procured in accordance with procedures acceptable to the Association; and (ii) such goods, works and services shall be used exclusively in carrying out the Sub-Project; (c) the right of the Executive Secretariat to inspect by itself, or jointly with the Association, if the Association shall so request, the goods, works, sites, plants included in the Sub-Project, the operations thereof and any relevant records and documents; (d) the right of the Executive Secretariat to obtain all information, as it or the Association shall reasonably request, regarding the administration, operation and financial management of the Sub-Project; (e) the right of the Executive Secretariat, to suspend or terminate the right of the Beneficiary to use the proceeds of the Sub-Grant upon failure by the Beneficiary to perform any of its obligations under the Sub-Grant Agreement; and (f) the rights and obligations of any agency which shall execute the Sub- Project on behalf of the Beneficiary. C. Work Plans 9. The Executive Secretariat shall cause all public and private institutions participating in the Project to prepare and furnish annual work plans in form and substance satisfactory to the Association. Page 22 - 21 - 21 E. Reports 10. The Recipient 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 November of each year, a report integrating the results of the monitoring and evaluation activities performed pursuant to subparagraph (a) of this paragraph, 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 December of each year, or such later date as the Association shall request, the report referred to in subparagraph (b) of this paragraph, 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. Page 23 - 22 - 22 SCHEDULE 5 Special Accounts 1. For the purposes of this Schedule: (a) the term “eligible Categories” means Categories (1) through (6) set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (b) the term “eligible expenditures” means expenditures in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Grant allocated from time to time to the eligible Categories in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term “CFAF Authorized Allocation” means an amount equivalent to CFAF 500,000,000 to be withdrawn from the Grant Account and deposited into Special Account A and the term “Dollars Authorized Allocation” means an amount equivalent to $ 500,000 to be withdrawn from the Grant Account and deposited into Special Account B pursuant to paragraph 3 (a) of this Schedule, provided, however, that unless the Association shall otherwise agree, the CFAF Authorized Allocation shall be limited to an amount equivalent to CFAF 350,000,000 and the Dollars Authorized Allocation shall be limited to an amount equivalent to $350,000 until the aggregate amount of withdrawals from the Grant 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 5,000,000. 2. Payments out of the Special Accounts shall be made either: (a) for Eligible Expenditures; or (b) into a Second Generation Special Account, exclusively for payments of Eligible Expenditures, all in accordance with the provisions of this Schedule. 3. After the Association has received evidence satisfactory to it that the Special Accounts have been duly opened, withdrawals of the respective Authorized Allocations and subsequent withdrawals to replenish the Special Accounts shall be made as follows: (a) For withdrawals of the respective Authorized Allocations, the Recipient shall furnish to the Association a request or requests for deposit into the respective Special Accounts of an amount or amounts which do not exceed the aggregate amount of the respective Authorized Allocation. On the basis of such request or requests, the Association shall, on behalf of the Recipient, withdraw from the Grant Account and deposit into the Special Accounts such amount or amounts as the Recipient shall have requested. (b) (i) For replenishment of the Special Accounts, the Recipient shall furnish to the Association requests for deposits into the Special Accounts at such intervals as the Association shall specify. Page 24 - 23 - 23 (ii) Prior to or at the time of each such request, the Recipient 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 Recipient, withdraw from the Grant Account and deposit into the respective Special Account such amount as the Recipient shall have requested and as shall have been shown by said documents and other evidence to have been paid out of the respective Special Account for eligible expenditures. All such deposits shall be withdrawn by the Association from the Grant Account under the respective eligible Categories, and in the respective equivalent amounts, as shall have been justified by said documents and other evidence. 4. For each payment made by the Recipient out of the Special Accounts or a Second Generation Special Account, the Recipient 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 Accounts: (a) if, at any time, the Association shall have determined that all further withdrawals should be made by the Recipient directly from the Grant Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; (b) if the Recipient 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 Accounts; (c) if, at any time, the Association shall have notified the Recipient of its intention to suspend in whole or in part the right of the Recipient to make withdrawals from the Grant Account pursuant to the provisions of Section 6.02 of the General Conditions; or (d) once the total unwithdrawn amount of the Grant allocated to the eligible Categories, minus the total amount of all outstanding special commitments entered into by the 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 respective Authorized Allocation. Thereafter, withdrawal from the Grant Account of the remaining unwithdrawn amount of the Grant allocated to the eligible Categories shall follow such procedures as the Page 25 - 24 - 24 Association shall specify by notice to the Recipient. 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 Accounts 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 Accounts: (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 Recipient shall, promptly upon notice from the Association: (A) provide such additional evidence as the Association may request; or (B) deposit into the respective 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 respective Special Account shall be made until the Recipient has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association shall have determined at any time that any amount outstanding in the Special Accounts or any Second Generation Special Account will not be required to cover further payments for eligible expenditures, the Recipient shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Recipient may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Accounts or any Second Generation Special Account. (d) Refunds to the Association made pursuant to paragraphs 6 (a), (b) and (c) of this Schedule shall be credited to the Grant Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions. 7. (a) At no time, shall the amount held in the Second Generation Special Account for Benin exceed the equivalent of CFAF 120,000,000; for the Cote d’Ivoire exceed the equivalent of CFAF 80,000,000; for Ghana exceed the equivalent of $150,000; and for Nigeria exceed the equivalent of $150,000. (b) Any withdrawal from a Second Generation Special Account must be justified to the Recipient by the same documentation and other evidence regarding eligible expenditures provided for under paragraph 3 of this Schedule. (c) If the Association or the Recipient shall have determined at any time that any amount outstanding in any Second Generation Special Account will not be required to cover further payments for Eligible Expenditures, such amount shall, promptly upon notice from the Association or Recipient, be refunded to the Special Account. Page 26 - 25 - 25 SCHEDULE 6 Modifications to the General Conditions For the purpose of this Agreement, the provisions of the General Conditions are modified as follows: 1. Sections 3.02, 3.03, 3.04 (a), 3.04 (b), 3.05, 6.05, Article VII, are deleted in their entirety. 2. Wherever used in the General Conditions, the following terms are modified to read as follows: (a) The term “Borrower” is modified to read “Recipient.” (b) The term “Credit” is modified to read “Grant.” (c) The term “credit” is modified to read “grant”; except that where used in Sections 6.02 (a) (ii) and 6.02 (c) (i), as modified below, the term “credit” shall continue to read “credit.” (d) The term “Credit Account” is modified to read “Grant Account.” (e) The term “Development Credit Agreement” is modified to read “Development Grant Agreement.” 3. (a) Article IV, Section 4.02 (a) and the heading of Section 4.02 are modified to read as follows: “ Section 4.02. Currencies in which Commitment Charges are Payable (a) The Recipient shall pay the commitment charge on the Grant in the currency specified in the Development Grant Agreement or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to paragraph (c) or (e) of this Section.” (b) Wherever used in Section 4.02 (c) and (e) of the General Conditions the words “principal and service charges” are modified to read “commitment charge.”