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CONFORMED COPY
CREDIT NUMBER 3261 MD
Development Credit Agreement
(Social Protection Management Project)
between
REPUBLIC OF MOLDOVA
and
INTERNATIONAL DEVELOPMENT ASSOCIATION
Dated July 6, 1999
CREDIT NUMBER 3261 MD 
DEVELOPMENT CREDIT AGREEMENT 
AGREEMENT, dated July 6, 1999, between REPUBLIC OF MOLDOVA (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; and 
(B) 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 December 2, 
1997, with the modifications set forth below (the General Conditions), constitute an 
integral part of this Agreement:
(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): 
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“12. ‘Participating Country’ means any country that the Association 
determines meets 
the requirements set forth in Section 10 of Resolution No. 183 of 
the Board of Governors of  the Association, adopted on June 26, 1996; and 
‘Participating Countries’ means, 
collectively, all such countries.”
(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 and in the Preamble to this Agreement have the respective 
meanings therein set forth and the following additional terms have the following 
meanings: 
(a)
“CU” means the Communications Unit to be established within MLSPF (as 
hereinafter defined) to design and implement a comprehensive information strategy for 
the social protection system; 
(b)
“Eligible Categories” means categories (1), (2), (3) and (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)
“Lei” means the lawful currency of the Borrower; 
(e)
“MLSPF” means the Borrower’s Ministry of Labor, Social Protection and 
Family; 
(f)
“OM” means the Operational Manual, and such term includes all attachments 
supplemental to the OM, adopted by MLSPF pursuant to the provisions of Section 6.01 
(a) of this Agreement;
(g)
“PCU” means the Project Coordination Unit established by the Borrower 
within MLSPF for purposes of Project management; 
(h)
“Project Account” means the Account to be opened by the Borrower, for 
purposes of making available its counterpart contribution to the financing of the 
Project, in accordance with the provisions of Section 6.01 (c) of this Agreement;  
(i)
“Project Management Report” means each report prepared in accordance with 
Section 4.02 of this Agreement;  
(j)
“PSC” means the Project Steering Committee established by the Borrower to 
provide oversight of Project implementation; 
(k)
“SF” means the Social Fund or any successor thereto, an administrative 
body responsible for the carrying out of the payment of social benefits, established 
under the Borrower’s Presidential Decree No. 60 of January 16, 1991, and Order No. 52 
of February 1, 1991; 
(l)
“Special Account” means the account referred to in Part B of Schedule 1 
to this Agreement; and 
(m)
“SPU” means the Social Policy Unit to be established within MLSPF to 
support the development of a consistent social protection policy framework.
ARTICLE II 
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The Credit 
Section 2.01. The Association agrees to lend to the Borrower, on the terms and 
conditions set forth or referred to in the Development Credit Agreement, an amount in 
various currencies equivalent to eight million two hundred thousand Special Drawing 
Rights (SDR 8,200,000). 
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 described in Schedule 2 to this 
Agreement and to be financed out of the proceeds of the Credit. 
Section 2.03. The Closing Date shall be March 31, 2005, 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, 2009 and ending January 15, 2034. Each 
installment to and including the installment payable on January 15, 2019 shall be one 
and one-fourth percent (1-1/4%) of such principal amount, and each installment 
thereafter shall be two and one-half percent (2-1/2%) of such principal amount.
(b)
Whenever: (i) the Borrower’s 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 
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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. 
(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 MLSPF with due diligence and efficiency and in conformity with 
appropriate financial, administrative, and social protection practices, and shall 
provide, promptly as needed, the funds, facilities, services and other resources 
required for the Project. 
(b)
Without limitation upon the provisions of paragraph (a) of this Section 
and except as the Borrower and the Association shall otherwise agree, the Borrower 
shall carry out the Project in accordance with the Implementation Program set forth in 
Schedule 4 to this Agreement.
Section 3.02. Without limitation upon any of its obligations under Section 3.01 
of this Agreement, the Borrower shall: (a) maintain the Project Account referred to in 
Section 6.01 (c) of this Agreement, and shall replenish said account promptly before 
each month with sufficient funds to enable the Borrower to meet its obligations under 
Section 3.01 of this Agreement for such period; (b) use the amount in said Project 
Account for financing the Borrower’s contribution to Project expenditures; and (c) 
ensure that sufficient annual allocations will be made in the Borrower’s budget for 
the Borrower’s counterpart contribution to the costs of the Project.
Section 3.03. 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 3.04. For the purposes of Section 9.07 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 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 for and in connection with the carrying out the Project.
(b)
The Borrower shall:
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(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 (6) 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 financial statements, records 
and accounts and a report 
of such audit by said auditors, of such scope and in 
such detail as the 
Association shall have reasonably requested; 
(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; and
(iv)
have the records, accounts and financial statements of the SF for 
each fiscal 
year beginning with the fiscal year ending on December 31, 
1999, audited in 
accordance with auditing standards acceptable to the 
Association consistently 
applied, by independent auditors acceptable to 
the Association; and, 
thereafter, furnish to the Association a 
report of such audit by said auditors 
as soon as available but in any 
case not later than six (6) months after the 
end of each such year.
(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 
expenditures, 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 statements of 
expenditure submitted during each 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 
December 31, 2000, 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 
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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 (l) of the General Conditions, the 
following additional event is specified, namely, that the OM shall have been amended, 
suspended, abrogated or waived without the Association’s prior consent. 
Section 5.02. Pursuant to Section 7.01(h) of the General Conditions, the 
following additional event is specified, namely, that the event specified in Section 
5.01 of this Agreement shall occur. 
ARTICLE VI 
Effective Date; Termination
Section 6.01. The following events are specified as additional conditions to the 
effectiveness of the Development Credit Agreement within the meaning of Section 12.01 
(b) of the General Conditions: 
(a)
the OM, satisfactory to the Association, has been adopted by the 
Borrower; 
(b)
the PCU has been established and is operating with resources, composition 
and terms of reference, satisfactory to the Association; and 
(c)
the Borrower has opened in Lei the Project Account in the National Bank 
of Moldova or in a commercial bank acceptable to the Association, and has deposited 
into said account an initial amount equivalent to $50,000. 
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
Cosmonaut Street, 7
277005 Chisinau
Republic of Moldova
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Telex:
(3732) 22810
For the Association:
International Development Association
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address:
Telex:
INDEVAS
248423 (MCI) or
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.
REPUBLIC OF MOLDOVA
By /s/ Ceslav Ciobanu 
Authorized Representative
INTERNATIONAL DEVELOPMENT ASSOCIATION
By /s/ Johannes F. Linn 
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
   410,000
85%
(2)
Goods
 4,800,000
100% of foreign 
expenditures, 
100% of local expenditures 
(ex-factory cost) and
80% of local expenditures 
for 
other items procured 
locally
(3)
Consultants’
 1,920,000
100%
services, including 
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audits for the SF, 
       and training 
(4)
PCU’s Operating Costs
   130,000
100%
(5)
Unallocated
   940,000
 _________
TOTAL
 8,200,000
 
 ========= 
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 “PCU’s Operating Costs” means auditing costs and expenditures 
incurred by the PCU on account of management of Project implementation for salaries, 
but excluding salaries of civil servants, communications, printing and publications, 
office supplies and such other expenditures as may be agreed upon by the Association. 
3.
Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be 
made in respect of payments made for expenditures prior to the date of this Agreement. 
4.
The Association may require withdrawals from the Credit Account to be made on 
the basis of statements of expenditure for expenditures for: (a) all contracts for 
works with the exception of: (i) the first contract for works to be procured on the 
basis of national competitive bidding procedures; and (ii) the first three contracts 
for works to be procured on the basis of small works procedures for which withdrawals 
may be made on this basis of statements of expenditures only after they have been 
reviewed by the Association in accordance with the provisions of Part D.2 of Section I 
of Schedule 3 to this Agreement; (b) all contracts for goods costing less than 
$100,000 equivalent each with the exception of: (i) the first contract for goods to be 
procured on the basis of international shopping procedures; and (ii) the first three 
contracts for goods to be procured on the basis of national shopping procedures, for 
which contracts withdrawals may be made on this basis of statements of expenditures 
only after they have been reviewed by the Association in accordance with the 
provisions of Part D.2 of Section I of Schedule 3 to this Agreement; (c)  contracts 
for training and study tours costing less than $10,000 equivalent each; (d) operating 
costs of the PCU; and (e) services under contracts costing less than $50,000 
equivalent each for consulting firms, and less than $25,000 equivalent each for 
individual consultants, all 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, in a 
commercial bank acceptable to the Association 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 
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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.
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-paragraph (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 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:
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 
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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 
$200,000 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 750,000.
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 
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 $2,000,000.
SCHEDULE 2
Page  11
Description of the Project
The objectives of the Project are to: (a) improve the Borrower’s capacity to 
implement pension reform; and (b) support the development of an efficient and 
sustainable social protection system. 
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:
Social Protection Analysis, Monitoring and Evaluation
Provision of goods, works, technical assistance and training to develop MLSPF’s 
social protection policies through: (a) development of a business plan for the SPU; 
(b) monitoring the implementation of reformed pension policies; (c) preparing a 
regular social report; and (d) developing a social protection database.
Part B:
Social Protection Administration
Provision of goods, works, technical assistance and training to strengthen the 
capacity of the social protection system administration through: (a) rationalization 
of the organizational structure and functions of the administration; (b) design and 
implementation of a human resource development plan; (c) strengthening of financial 
management; and (d) developing a comprehensive information technology infrastructure.
Part C:
Public Information Provision and Communication
Provision of goods, works and technical assistance to improve the communication 
of information regarding social protection policies and services by: (a) establishing 
a communications unit in MLSPF; (b) developing a communications strategy; (c) 
producing information materials; and (d) organizing client surveys.
Part D:
Project Coordination
Provision of goods, works, technical assistance and operating costs (including 
audit costs) for the operation of the PCU.
* * * 
The Project is expected to be completed by September 30, 2004.
SCHEDULE 3 
Procurement  
Section I.
Procurement of Goods 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) subject to the modifications thereto 
set forth in paragraph 2 of this Part A; and (b) 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 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 provision shall apply to goods to be procured under contracts 
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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 for the refurbishing of the central office of the MLSPF under Part B(d) of 
Schedule 2 to this Agreement, estimated to cost more than $50,000 equivalent per 
contract, up to an aggregate amount not to exceed $150,000 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
Readily available off-the-shelf goods estimated to cost less than $100,000 
equivalent per contract, up to an aggregate amount not to exceed $530,000 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
Readily available off-the-shelf goods estimated to cost less than $25,000 
equivalent per contract, up to an aggregate amount not to exceed $325,000 equivalent, 
may be procured under contracts awarded on the basis of national shopping procedures 
in accordance with the provisions of paragraphs 3.5 and 3.6 of the Guidelines. 
4.
Procurement of Small Works
Works estimated to cost less than $50,000 equivalent per contract, up to an 
aggregate amount not to exceed $585,000 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 prequalify for bidding or 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: (i)
all contracts for goods to be procured on the 
basis of international competitive bidding procedures; and (ii) the first contract for 
works to be procured on the basis of national competitive bidding procedures, the 
procedures set forth in paragraphs 2 and 3 of Appendix 1 to the Guidelines shall 
apply.
(b)
With respect to: (i) the first contract for goods to be procured on the 
basis of international shopping procedures; (ii) the first three contracts for goods 
to be procured on the basis of national shopping procedures; and (iii) the first three 
contracts for works to be procured on the basis of small works procedures, the 
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following procedures shall apply: (A) prior to the selection of any supplier or 
contractor, the Borrower shall provide to the Association a report on the comparison 
and evaluation of quotations received; (B) prior to the execution of any contract, the 
Borrower shall provide to the Association a copy of the specifications and the draft 
contract; and (C) 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 Bank in January 1997 and revised 
in September 1997 and January 1999 (the Consultant Guidelines), subject to the 
modifications thereto set forth in paragraph 2 of this part A, 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 
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.
Least-cost Selection
Services for audits, estimated to cost up to an aggregate amount not to exceed 
$320,000 equivalent, may be procured under contracts awarded in accordance with the 
provisions of paragraphs 3.1 and 3.6 of the Consultant Guidelines. 
2.
Individual Consultants
Services for tasks that meet the requirements set forth in paragraph 5.1 of the 
Consultant Guidelines, up to an aggregate amount not to exceed $505,000 equivalent, 
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. 
3.
Selection Based on Consultants’ Qualifications
Services for training and study tours, estimated to cost up to an aggregate 
amount not to exceed $165,000 equivalent, may be procured through suitable training 
institutions identified in agreement with the Association, in accordance with the 
provisions of paragraphs 3.1 and 3.7 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. 
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2.
Prior Review
(a)
With respect to each contract for the employment of consulting firms, 
estimated to cost the equivalent of $50,000 or more, 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 each contract for the employment of individual 
consultants estimated to cost the equivalent of $25,000 or more, 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 carry out the Project, through MLSPF, in accordance with the 
requirements set forth or referred to in the OM.
2.
The Borrower shall:
(a)
prepare and furnish to the Association by March 31 in each year, for its 
review and concurrence, an annual work program for the Project; and
(b)
prepare and furnish to the Association, starting in July 2000, 
semi-annual reports on the progress of Project implementation.
3.
The Borrower shall maintain the PCU until completion of the Project, with 
resources, composition and terms of reference satisfactory to the Association.
4.
The Borrower shall maintain the PSC until completion of the Project with 
composition and terms of reference satisfactory to the Association.
5.
By December 31, 1999, the Borrower shall establish and shall, thereafter, 
maintain the SPU until completion of the Project, with composition and terms of 
reference satisfactory to the Association.
6.
By December 31, 1999, the Borrower shall establish and shall, thereafter, 
maintain until completion of the Project the CU with composition and terms of 
reference satisfactory to the Association.
7.
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 March 31, 2002, a report integrating the 
results of the monitoring and evaluation activities performed pursuant to paragraph 
(a) of this Section, on the progress achieved in the carrying out of the Project 
during the period preceding the date of said report and setting out the measures 
recommended to ensure the efficient carrying out of the Project and the achievement of 
the objectives thereof during the period following such date; and
(c)
review with the Association, by June 30, 2002, 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 
Page  15
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.