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CONFORMED COPY
CREDIT NUMBER 3606 GM
Development Credit Agreement
(Gateway Project)
between
REPUBLIC OF THE GAMBIA
and
INTERNATIONAL DEVELOPMENT ASSOCIATION
Dated March 21, 2002
CREDIT NUMBER 3606 GM
DEVELOPMENT CREDIT AGREEMENT
AGREEMENT, dated March 21, 2002, between REPUBLIC OF THE GAMBIA (the 
Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association).
WHEREAS (A) the Association has received a letter dated December 12, 2001, from the 
Borrower describing a program of objectives, policies and actions designed at achieving broad 
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based export-oriented and sustained growth (the Program), and declaring the Borrower’s 
commitment to implementation of the Program;
(B)
the Borrower has requested that the Association support its execution of the 
Program through a series of Credits over a period of ten years, the proceeds of such Credits to be 
utilized by the Borrower for implementing the Program;
(C)
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; 
(D)
Parts A, B, D.1 and E of the Project will be carried out by the Gambia 
Investment Promotion and Free Zones Agency (GIPFZA) with the Borrower's assistance and, as 
part of such assistance, the Borrower will make available to GIPFZA part of the proceeds of the 
Credit provided for in Article II of this Agreement (the Credit), as set forth in this Agreement; 
and
WHEREAS the Association has agreed, on the basis, inter alia, of the foregoing, to 
extend the Credit to the Borrower in support of the first phase of the Program, on the terms and 
conditions set forth in this Agreement and in the agreement of even date herewith between the 
Association and GIPFZA (the Project Agreement);
NOW THEREFORE the parties hereto hereby agree as follows:
ARTICLE I
General Conditions; Definitions
Section 1.01. The “General Conditions Applicable to Development Credit Agreements” 
of the Association, dated January 1, 1985 (as amended through October 6, 1999), with the 
modifications set forth below (the General Conditions), constitute an integral part of this 
Agreement: 
(a)
A new paragraph (12) is added to Section 2.01 to read as set forth below, and the 
existing paragraphs (12) through (14) of said Section are accordingly renumbered as paragraphs 
(13) through (15):
“12.
‘Participating Country’ means any country that the Association 
determines meets the requirements set forth in Section 11 of Resolution No. 194 of the 
Board of Governors of the Association, adopted on April 8, 1999; and ‘Participating 
Countries’ means, collectively, all such countries.” ; and
(b)
The second sentence of Section 5.01 is modified to read:
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“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)
“DOSFEA” means the Borrower’s Department of State for Finance and 
Economic Affairs;
(b)
“DOSTIE” means the Borrower’s Department of State for Trade, Industry and 
Employment;
(c)
“Eligible Categories” means categories (1), (2), (3), (4) and (5) set forth in the 
table in Part A.1 of Schedule 1 to this Agreement; 
(d)
“Eligible Expenditures” means the expenditures for goods and services referred 
to in Section 2.02 (a) of this Agreement; 
(e)
“EMPs” means the Environment Management Plans prepared for new activities 
to be carried out in the Free Zone, such activities not having been previously identified in the 
ESMP (as hereinafter defined), describing measures to mitigate against the potential 
environmental and social impacts of these activities;
(f)
“ESMP” means the Environment and Social Management Plan dated August 14, 
2001, and satisfactory to the Association, describing measures for the mitigation of the potential 
environmental and social impacts of the Project, as the same may be updated from time to time 
with the agreement of the Association;
(g)
“Free Zone” means the Free Zone to be developed at the Yundum Airport, 
established pursuant to the Borrower’s Free Zones Act No. 3 of March 1, 2001;
(h)
“GDA” means the Gambia Divestiture Agency responsible for the 
implementation of the Borrower’s divestiture program, established and operating pursuant to the 
Borrower’s Divestiture Agency Act No. 4 of March 1, 2001;
(i)
“GIPFZA” means the Gambia Investment Promotion and Free Zones Agency 
established and operating pursuant to the Borrower’s Investment Promotion Act No. 2 of March 
1, 2001;
(j)
“MOU” means the Memorandum of Understanding to be entered into between 
GIPFZA and NEA (as hereinafter defined) setting forth their respective roles in the Project’s 
environmental management, and referred to in Part B.4 of Schedule 4 to this Agreement and 
paragraph 3 (a) of the Schedule to the Project Agreement;
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(k)
“NEA” means the Borrower’s National Environmental Agency established and 
operating pursuant to the Borrower’s National Environmental Management Act No. 13 of May 
24, 1994;
(l)
“PCC” means the Project Coordination Committee responsible for the provision 
of strategic guidance to the implementing agencies under the Project, and referred to in Part B.1 
of Schedule 4 to this Agreement and paragraph 2 of the Schedule to the Project Agreement;
(m)
“Project Account” means the account referred to in Section 3.05 of this 
Agreement;
(n)
“Project Agreement” means the agreement between the Association and GIPFZA 
of even date herewith, as the same may be amended from time to time, and such term includes all 
schedules and agreements supplemental to the Project Agreement;
(o)
“Project Coordinator” means the Project Coordinator referred to in Part B.2 of 
Schedule 4 to this Agreement, and responsible for the overall coordination of the implementation 
of the Project;
(p)
“PIM” means the Project Implementation Manual referred to in Section 6.01 (d) 
of this Agreement, setting forth, 
inter alia
, the policies, procedures and guidelines for the 
implementation of the Project, including financial, accounting, procurement and environmental 
management procedures, as may be amended from time to time in consultation with the 
Association, and such term includes any schedules to the PIM;
(q)
“Project Management Report” means each report prepared in accordance with 
Section 4.02 of the Project Agreement;
(r)
“Project Preparation Advances” means the project preparation advances granted 
by the Association to the Borrower pursuant to the letter agreements signed on behalf of the 
Association on April 13, 1993, October 19, 1993, May 3, 1994 and September 25, 1998, 
respectively, and on behalf of the Borrower on April 21, 1993, March 18, 1994, July 15, 1994, 
and October 8, 1998, respectively;
(s)
“Project Quarter” means the three-month period beginning from the Effective 
Date and ending three months thereafter (the First Project Quarter) and any three-month period 
beginning at the end of the First Project Quarter, or at the end of any subsequent Project Quarter; 
(t)
“Special Account” means the account referred to in Part B of Schedule 1 to this 
Agreement; and
(u)
“Subsidiary Agreement” means the agreement to be entered into between the 
Borrower and GIPFZA, pursuant to Section 6.01 (a) of this Agreement, as the same may be 
amended from time to time, and such term includes all schedules to such Agreement.
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 twelve million, four hundred thousand Special Drawing Rights (SDR 
12,400,000).
Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in 
accordance with the provisions of Schedule 1 to this Agreement for expenditures made (or, if the 
Association shall so agree, to be made) in respect of the reasonable cost of goods and services 
required for the Project and to be financed out of the proceeds of the Credit.
(b)
Promptly after the Effective Date, the Association shall, on behalf of the 
Borrower, withdraw from the Credit Account and pay to itself the amount required to repay the 
principal amount of the Project Preparation Advances 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 Advances shall thereupon be canceled.
Section 2.03. The Closing Date shall be April 30, 2007, 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 
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March 1 and September 1 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 March 1 and 
September 1 commencing March 1, 2012 and ending September 1, 2041. Each installment to and 
including the installment payable on September 1, 2021 shall be one percent (1%) of such 
principal amount, and each installment thereafter shall be two percent (2%) of such principal 
amount.
(b)
Whenever: (i) the Borrower's per capita gross national product (GNP), as 
determined by the Association, shall have exceeded for three consecutive years  the level 
established annually by the Association for determining eligibility to access the Association's 
resources; and (ii) the Bank shall consider the Borrower creditworthy for Bank lending, the 
Association may, subsequent to the review and approval thereof by the Executive Directors of 
the Association and after due consideration by them of the development of the Borrower's 
economy, modify the repayment of installments under paragraph (a) above by:
(A)
requiring the Borrower to repay twice the amount of each such 
installment not yet due until the principal amount of the Credit shall 
have been repaid; and
(B)
requiring the Borrower to commence repayment of the principal amount 
of the Credit as of the first semiannual payment date referred to in 
paragraph (a) above falling six months or more after the date on which 
the Association notifies the Borrower that the events set out in this 
paragraph (b) have occurred, provided, however, that there shall be a 
grace period of a minimum of five years on such repayment of principal.
(c)
If so requested by the Borrower, the Association may revise the modification 
referred to in paragraph (b) above to include, in lieu of some or all of the increase in the amounts 
of such installments, the payment of interest at an annual rate agreed with the Association on the 
principal amount of the Credit withdrawn and outstanding from time to time, provided that, in the 
judgment of the Association, such revision shall not change the grant element obtained under the 
above-mentioned repayment modification.
(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
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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 Parts C and D.2 of 
the Project through the GDA, with due diligence and efficiency and in conformity with 
appropriate administrative, environmental, financial and engineering practices, and shall provide, 
promptly as needed, the funds, facilities, services and other resources required for the Project; 
and (ii) without any limitation or restriction upon any of its other obligations under the 
Development Credit Agreement shall, with respect to Parts A, B, D.1 and E of the Project, cause 
GIPFZA to perform in accordance with the provisions of the Project Agreement all of the 
obligations of GIPFZA therein set forth, shall take and cause to be taken all action, including the 
provision of funds, facilities, services and other resources, necessary or appropriate to enable 
GIPFZA to perform such obligations, and shall not take or permit to be taken any action which 
would prevent or interfere with such performance.
(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 
Parts C and D.2 of the Project in accordance with the Implementation Program set forth in 
Schedule 4 to this Agreement.
(c)
The Borrower shall make available to GIPFZA on a grant basis, the proceeds of 
the Credit allocated to categories 1, 2, 3 (a), 4 (a) and 5 of the table in Schedule 1, under a 
Subsidiary Agreement to be entered into between the Borrower and GIPFZA, for Parts A, B, D.1 
and E of the Project.
(d)
The Borrower shall exercise its rights under the Subsidiary Agreement in such 
manner as to protect the interests of the Borrower and the Association and to accomplish the 
purposes of the Credit, and except as the Association shall otherwise agree, the Borrower shall 
not assign, amend, abrogate or waive the Subsidiary Agreement, or any provision thereof.
Section 3.02.
Except as the Association shall otherwise agree, procurement of the 
goods, works and services required for the Project and to be financed out of the proceeds of the 
Credit shall be governed by the provisions of Schedule 3 to this Agreement.
Section 3.03. For the purposes of Section 9.06 of the General Conditions and without 
limitation thereto, the Borrower shall:
(a)
prepare, on the basis of guidelines acceptable to the Association, and furnish to 
the Association not later than six (6) months before 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.
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Section 3.04. The Borrower and the Association hereby agree that the obligations set 
forth in Sections 9.03, 9.04, 9.05, 9.06, 9.07 and 9.08 of the General Conditions (relating to 
insurance, use of goods and services, plans and schedules, records and reports, maintenance and 
land acquisition, respectively) for Parts A, B, D.1 and E of the Project shall be carried out by 
GIPFZA pursuant to Section 2.03 of the Project Agreement.
Section 3.05.
Without limitation to its obligations under Section 3.01 of this 
Agreement, the Borrower shall, for the purposes of making available its counterpart contribution 
for the financing of the Project:
(a) 
cause the Borrower to open and thereafter maintain, until the completion of the 
Project a Project Account in its Central Bank on terms and conditions satisfactory to the 
Association;
(b)
deposit into the Project Account an initial contribution of $240,000;
(c)
thereafter replenish said account up to the initial amount of $240,000 at the end 
of each Project Quarter until the completion of the Project, or whenever its balance shall be less 
than $120,000; and 
(d)
ensure that amounts deposited into the Project Account shall be used exclusively 
to make payments to meet expenditures made or to be made in respect of the reasonable cost of 
goods, works and services for the Project in addition to those financed from the proceeds of the 
Credit.
ARTICLE IV
Financial Covenants
Section 4.01. For all expenditures with respect to which withdrawals from the Credit 
Account were made on the basis of Project Management Reports or statements of expenditure, 
the Borrower shall:
(a)
maintain or cause to be maintained, records and separate accounts reflecting 
such expenditures;
(b)
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;
(c)
enable the Association’s representatives to examine such records; and
(d)
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 
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said auditors as to whether the Project Management Reports or statements of expenditure 
submitted during such fiscal year, together with the procedures and internal controls involved in 
their preparation, can be relied upon to support the related withdrawals.
Section 4.02.
Notwithstanding the provisions of Section 4.01 (a) above, the Borrower 
shall ensure that GDA provides to GIPFZA records and separate accounts reflecting expenditures 
incurred by GDA in the implementation of Parts C and D.2 of the Project, and all such other 
information as GIPFZA may require for purposes of enabling GIPFZA to prepare consolidated 
financial statements for the Project in its entirety.
ARTICLE V
Remedies of the Association
Section 5.01. Pursuant to Section 6.02 (l) of the General Conditions, the following 
additional events are specified, namely, that:
(a)
GIPFZA shall have failed to perform any of its obligations under the Project 
Agreement.
(b)
A situation shall have arisen which makes it improbable that the Program, or a 
significant part thereof shall be carried out.
(c)
As a result of events which have occurred after the date of the Development 
Credit Agreement, an extraordinary situation shall have arisen which shall make it improbable 
that GIPFZA will be able to perform its obligations under the Project Agreement.
(d)
The Borrower’s Investment Promotion Act No. 2 of 2001 governing the 
operations of GIPFZA shall have been amended, suspended, abrogated, repealed or waived so as 
to affect materially and adversely the ability of GIPFZA to perform any of its obligations under 
the Project Agreement.
Section 5.02. Pursuant to Section 7.01 (h) of the General Conditions, the following 
additional events are specified:
(a)
the events specified in paragraphs (a) and (b) of Section 6.01 of this Agreement 
shall occur and shall continue for a period of sixty days after notice thereof shall have been given 
by the Association to the Borrower; and
(b)
the event specified in paragraph (d) of Section 6.01 of this Agreement shall 
occur.
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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 Subsidiary Agreement has been executed on behalf of the Borrower and 
GIPFZA;
(b)
the Borrower has caused GIPFZA to appoint an independent auditor, with 
qualifications and experience, and in accordance with terms, conditions and guidelines, that are 
acceptable to the Association; 
(c)
the Borrower’s Project Account has been opened and the initial contribution 
referred to in Section 3.05 (b) of this Agreement has been deposited therein;
(d)
the Borrower has adopted the PIM in a form and substance acceptable to the 
Association; 
(e)
the Borrower has caused GIPFZA to establish an accounting and financial 
management system satisfactory to the Association;
(f)
the Borrower has caused GIPFZA and GDA to finalize the bidding documents 
for the procurement of all goods, works and services to be carried out in the first year of Project 
implementation; and
(g)
the Borrower has enacted and passed into law the Regulatory Agency Bill.
Section 6.02. The following are specified as additional matters, within the meaning of 
Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be 
furnished to the Association:
(a)
that the Project Agreement has been duly authorized or ratified by GIPFZA, and 
is legally binding upon GIPFZA in accordance with its terms; and 
(b)
that the Subsidiary Agreement has been duly authorized or ratified by the 
Borrower and GIPFZA and is legally binding upon the Borrower and GIPFZA in accordance 
with its terms.
Section 6.03. 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.
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ARTICLE VII
Representative of the Borrower; Addresses
Section 7.01. The Secretary of State responsible for Finance and Economic Affairs 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:
Department of State for Finance and Economic Affairs
The Quadrangle
Banjul
Republic of The Gambia
Cable address:
Telex:
Facsimile:
MINFIN
2264
(220) 227 954
Republic of The Gambia
For the Association:
International Development Association
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address:
Telex:
Facsimile:
INDEVAS
248423 (MCI) or
(202) 477 6391
Washington, D.C.
 64145 (MCI)
IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized 
representatives, have caused this Agreement to be signed in their respective names in the District 
of Columbia, United States of America, as of the day and year first above written.
REPUBLIC OF THE GAMBIA
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By /s/ John P. Bojang
Authorized Representative
INTERNATIONAL DEVELOPMENT ASSOCIATION
By /s/ Pamela Cox
Acting Regional Vice President
Africa
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)
Civil Works 
100% of foreign
for Part A of the Project
3,200,000
expenditures and
70% of local
expenditures
(2)
Goods and Equipment
100,000
100% of foreign
for Part B of the Project
expenditures and
70% of local expenditures
(3)
Consultant Services 
100% of foreign
expenditures
70% of local
expenditures
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(a) Parts A, B, D.1 and E 
3,700,000
     of the Project
(b) Parts C and D.2
1,900,000
     of the Project
(4)
Training
100% of foreign
expenditures
(a) Part D.1 of the Project
300,000
70% of local
expenditures
(b) Part D.2 of the Project
150,000
(5)
Incremental Operating Costs
70%
Year 2002
300,000
Year 2003
200,000
Year 2004
100,000
Year 2005
50,000
(6)
Refunding of
Amount due pursuant
Project Preparation
1,500,000
to Section 2.02 (b) of
Advance
this Agreement
(7)
Unallocated
900,000
_________
12,400,000
TOTAL
========
2.
For the purposes of this Schedule:
(a)
the term “foreign expenditures” means expenditures in the currency of any 
country other than that of the Borrower for goods or services supplied from the territory of any 
country other than that of the Borrower; 
(b)
the term “local expenditures” means expenditures in the currency of the 
Borrower or for goods or services supplied from the territory of the Borrower; and
(c)
the term “incremental operating costs” means the incremental costs of office 
supplies, communications, office rent, utilities, fuel, vehicle maintenance, insurance, audits, 
investment promotion expenses, and salaries and travel allowances of GIPFZA staff, incurred for 
purposes of carrying out the Project, but excluding salaries of the Borrower’s civil servants.
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.
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4.
The Association may require withdrawals from the Credit Account to be made on the 
basis of statements of expenditure for expenditures for: (a) goods or works under contracts not 
exceeding $100,000 equivalent; (b) services under contracts not exceeding $100,000 equivalent 
for employment of firms and $50,000 equivalent for employment of individual consultants; (c) 
training; and (d) incremental operating costs, 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 its Central 
Bank, on terms and conditions satisfactory to the Association.
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 the Project Agreement; and (ii) a request from the 
Borrower for withdrawal on the basis of Project Management Reports, withdrawals shall be 
made in accordance with the provisions of Annex A to this Schedule 1; and
(b)
upon receipt by the Association of a Project Management Report pursuant to 
Section 4.02 (b) of the Project 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 the Project 
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 the Project Agreement, any of the audit reports 
required to be furnished to the Association pursuant to said Section in respect of the audit of: (A) 
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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 Development Credit Agreement.
Annex A
to
SCHEDULE 1
Operation of Special Account
When Withdrawals Are Not Made
On the Basis of Project Management Reports
1.
For the purposes of this Annex, the term “Authorized Allocation” means an amount 
equal to $1,000,000 to be withdrawn from the Credit Account and deposited into the Special 
Account pursuant to paragraph 2 of this Annex; provided, however, that, unless the Association 
Page  16
shall otherwise agree, the Authorized Allocation shall be limited to an amount equivalent to 
$500,000 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 4,000,000.
2.
Withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the 
Special Account shall be made as follows:
(a)
For withdrawals of the Authorized Allocation, the Borrower shall furnish to the 
Association a request or requests for deposit into the Special Account of an amount or amounts 
which in the aggregate do not exceed the Authorized Allocation.  On the basis of each such 
request, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and 
deposit into the Special Account such amount as the Borrower shall have requested.
(b)
For replenishment of the Special Account, the Borrower shall furnish to the 
Association requests for deposit into the Special Account at such intervals as the Association 
shall specify. Prior to or at the time of each such request, the Borrower shall furnish to the 
Association the documents and other evidence required pursuant to Part B.3 of Schedule 1 to this 
Agreement for the payment or payments in respect of which replenishment is requested. On the 
basis of each such request, the Association shall, on behalf of the Borrower, withdraw from the 
Credit Account and deposit into the Special Account such amount as the Borrower shall have 
requested and as shall have been shown by said documents and other evidence to have been paid 
out of the Special Account for Eligible Expenditures. Each such deposit into the Special Account 
shall be withdrawn by the Association from the Credit Account under one or more of the Eligible 
Categories.
3.
The Association shall not be required to make further deposits into the Special Account, 
once the total unwithdrawn amount of the Credit minus the total amount of all outstanding 
special commitments entered into by the Association pursuant to Section 5.02 of the General 
Conditions in respect of expenditures to be financed out of the proceeds of the Credit allocated to 
said Categories, shall equal the equivalent of twice the amount of the Authorized Allocation. 
Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of the 
Credit allocated to said Categories shall follow such procedures as the Association shall specify 
by notice to the Borrower.  Such further withdrawals shall be made only after and to the extent 
that the Association shall have been satisfied that all such amounts remaining on deposit in the 
Special Account as of the date of such notice will be utilized in making payments for Eligible 
Expenditures.
Annex B
to
SCHEDULE 1
Operation of Special Account
When Withdrawals Are Made
Page  17
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 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 $1,500,000.
SCHEDULE 2
Description of the Project
The objective of the first phase of the Project is to lay the foundation for expanded 
private investment export-oriented production and employment opportunities, through the 
establishment of a Free Zone at Yundum Airport, and the creation of an improved institutional 
environment.
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
:
Establishment of a Free Zone
1.
Construction of a Free Zone at Yundum Airport, including on-site and off-site 
infrastructure consisting of fences, access roads, water supply and sewage disposal facilities, 
electricity, telephones and a warehouse.
2.
Supervision of construction through the provision of technical advisory services.
Part B
:
Establishment of GIPFZA
1.
Strengthening of the operational capacity of GIPFZA, through the provision of technical 
Page  18
advisory services and the acquisition of equipment.
2.
Provision of technical advisory services to GIPFZA to carry out the following activities: 
(a) surveys, including market, and trade and facilitation surveys; (b) development of a business 
plan and an international marketing plan; (c) studies on river-free zone interfaces, and quality 
management systems at the Borrower’s Customs and Excise Department; and (d) an investment 
promotion campaign, including, the organization of trade fairs and preparation of promotional 
materials.
Part C
:
Support to GDA
Provision of technical advisory services to assist the Borrower in: (a) carrying out its 
divestiture program; (b) monitoring the implementation of such program, including carrying out 
environmental audits of the public enterprises to be divested, and establishing a retrenchment and 
social safety net framework; and (c) carrying out a communication campaign to attract potential 
investors.
Part D
:
Capacity Building
1.
Strengthening the capacity of GIPFZA to carry out the Program and Project activities, 
through the provision of technical advisory services and training.
2.
Strengthening the capacity of GDA, the Borrower’s Customs and Excise Department and 
the Project Coordinator to carry out the Program and Project activities, through the provision of 
technical advisory services and training.
Part E
:
Project and Environmental Management
1.
Assisting the Project Coordinator in coordinating the implementation of the Project 
activities.
2.
Carrying out of annual environmental and social assessments and updates to the ESMP 
and EMPs for activities to be carried out in the Free Zone, and implementation of mitigation 
measures identified in the ESMP and EMPs, as revised from time to time, through provision of 
technical advisory services.
* * *
The Project is expected to be completed by October 31, 2006
SCHEDULE 3
Page  19
Procurement and Consultants’ Services
Section I
.
Procurement of Good and Works
Part A
:
General
1.
Goods and works shall be procured in accordance with: (a) the provisions of Section I of 
the “Guidelines for Procurement under IBRD Loans and IDA Credits” published by the Bank in 
January 1995 and revised in January and August 1996, September 1997 and January 1999 (the 
Guidelines); and (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 and works shall be 
procured under contracts awarded in accordance with the provisions of Section II of the 
Guidelines and paragraph 5 of Appendix 1 thereto.
2.
The following provisions shall, as specified hereunder, apply respectively to goods and 
works to be procured under contracts awarded in accordance with the provisions of paragraph 1 
of this Part B:
(a)
Grouping of contracts
To the extent practicable, contracts for works and goods shall be grouped in bid packages 
estimated to cost $100,000 equivalent or more each.
(b)
Preference for domestically manufactured goods
The provisions of paragraphs 2.54 and 2.55 of the Guidelines and Appendix 2 thereto 
shall apply to goods manufactured in the territory of the Borrower.
Part C
:
Other Procurement Procedures
1.
National Competitive Bidding
Goods estimated to more than $30,000 equivalent per contract, up to an aggregate 
amount not to exceed $100,000 equivalent, may be procured under contracts awarded in 
accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines.
Page  20
2.
International or National Shopping
Goods estimated to cost less than $30,000 equivalent per contract, up to an aggregate 
amount not to exceed $100,000 equivalent, may be procured under contracts awarded on the 
basis of international/national shopping procedures in accordance with the provisions of 
paragraphs 3.5 and 3.6 of the Guidelines.
Part D
:
Review by the Association of Procurement Decisions
1.
Procurement Planning
Prior to the issuance of any invitations to bid for contracts, the proposed procurement 
plan for the Project shall be furnished to the Association for its review and approval, in 
accordance with the provisions of paragraph 1 of Appendix 1 to the Guidelines. Procurement of 
all goods and works shall be undertaken in accordance with such procurement plan as shall have 
been approved by the Association, and with the provisions of said paragraph 1.
2.
Prior Review
With respect to each contract for: (i) works and goods estimated to cost the equivalent of 
$100,000 or more; and (ii) the first three (3) contracts for goods procured under National 
Competitive Bidding procedures, the procedures set forth in paragraphs 2 and 3 of Appendix 1 to 
the Guidelines shall apply.
3.
Post Review
With respect to each contract not governed by paragraph 2 of this Part, the procedures set 
forth in paragraph 4 of Appendix 1 to the Guidelines shall apply.
Section II
.
Employment of Consultants
Part A
:
General
1.
Consultants’ services shall be procured in accordance with: (a) the provisions of the 
Introduction and Section IV of the “Guidelines:  Selection and Employment of Consultants by 
World Bank Borrowers” published by the Association in January 1997 and revised in September 
1997 and January 1999, subject to the modifications thereto set forth in paragraph 2 of this Part 
A (the Consultant Guidelines); and (b) the provisions of the following Parts of this Section II.
2.
In paragraph 1.10 of the Consultant Guidelines, the references to “Bank member 
countries” and “member country” shall be deemed to be references, respectively, to 
“Participating Countries” and “Participating Country”.
Page  21
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, 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.
2.
The following provisions 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 in accordance with the provisions of paragraph 2.7 of the 
Consultant Guidelines.
Part C
:
Other Procedures for the Selection of Consultants
1.
Least-cost Selection
Services for audits estimated to cost less than $100,000 equivalent per contract may be 
procured under contracts awarded in accordance with the provisions of paragraphs 3.1 and 3.6 of 
the Consultant Guidelines.
2.
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.
3.
Single Source Selection
Services for the management of contracts estimated to cost less than US$100,000 
equivalent per contract, 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.
4.
Individual Consultants
Services for tasks that meet the requirements set forth in paragraph 5.1 of the Consultant 
Guidelines shall be procured under contracts awarded to individual consultants in accordance 
with the provisions of paragraphs 5.1 through 5.3 of the Consultant Guidelines.
Part D
:
Review by the Association of the Selection of Consultants
Page  22
1.
Selection Planning
Prior to the issuance to consultants of any requests for proposals, the proposed plan for 
the selection of consultants under the Project shall be furnished to the Association for its review 
and approval, in accordance with the provisions of paragraph 1 of Appendix 1 to the Consultant 
Guidelines.  Selection of all consultants’ services shall be undertaken in accordance with such 
selection plan as shall have been approved by the Association, and with the provisions of said 
paragraph 1.
2.
Prior Review
(a)
With respect to each contract for the employment of consulting firms estimated 
to cost the equivalent of $100,000 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 $50,000 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.
(c)
Notwithstanding the provisions of sub-paragraphs (a) and (b) of this Part D.2, the 
terms of reference for all contracts and the first three (3) contracts for the employment of firms 
shall be furnished to the Association for its prior review and approval.
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
A.
Main Provisions of the Subsidiary Agreement
The Subsidiary Agreement shall include, but without being limited to, the following 
provisions:
(a)
the Borrower shall make available the proceeds of the Credit to GIPFZA as a 
grant;
(b)
GIPFZA shall perform all of its obligations under the Project Agreement; and
Page  23
(c)
goods and services required for the Project shall be procured in accordance with 
the Association’s procedures as set forth in Schedule 3 to this Agreement.
B.
Overall Project Implementation
1.
The Borrower shall: (a) establish the PCC with membership including the Permanent 
Secretaries of DOSTIE, DOSFEA, the Chief Executive of GIPFZA and the Chief Executive of 
GDA; and (b) ensure that the Departments of State and agencies collaborate with GIPFZA and 
assist GIPFZA in ensuring consistent application of the Borrower’s sectoral policies and proper 
implementation of the Project, in compliance with the provisions of the PIM and the ESMP.
2.
The Borrower shall appoint and maintain through out Project implementation, a Project 
Coordinator, with experience and under terms of reference satisfactory to the Association.
3.
Except as the Association shall otherwise agree, the Borrower shall: (a) apply the 
criteria, policies, procedures and arrangements set out in the PIM and the ESMP; and (b) not 
amend or waive, or permit to be amended or waived the PIM and the ESMP or any provision 
thereof, in a manner which, in the opinion of the Association, may materially and adversely 
affect the implementation of the Project. 
4.
The Borrower shall cause NEA to enter into a MOU with GIPFZA, under terms and 
conditions that are satisfactory to the Association, setting forth their respective roles in the 
environmental management of the Project.
5.
The Borrower shall participate and cause the PCC to participate in the annual and 
midterm reviews referred to in paragraph 4 (a) and 5 (a) of the Schedule to the Project 
Agreement, respectively.
SCHEDULE 5
Performance Indicators
2002
2003
2004
2005
2006
Page  24
Key performance 
indicators
1.
Number of licenses
5
5
5
5
5
2.
Number of new firms 
created
3
7
8
7
5
3.   Job creations 
cumulated
(direct and indirect)
100
300
1 000
2 500
4 000
4.   Average process time to 
create a new enterprise
6 weeks
5 weeks
4 weeks
4 weeks
4 weeks
5.   Average clearance time
2 days
2 days
2 days
1 day
1 day
6.   Tonnage and value 
from Free Zone
Statistics
Statistics
Statistics
Statistics
Statistics