CREDIT NUMBER 2376 BU Development Credit Agreement (Third Structural Adjustment Credit) between REPUBLIC OF BURUNDI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1992 ÿþCREDIT NUMBER 2376 BU DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated U )-, 1992, between REPUBLIC OF BURUNDI (the Borrower) and NTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS (A) the Association has received a letter with attached annexes dated April 20, 1992 from the Borrower describing a program of actions, objectives and policies designed to achieve structural adjustment of the Borzower's economy (hereinafter called the Program), declaring the Borrower's commitmant to the execution of the Program, and requesting assistance from the Association in the financing of needed imports of goods and services required during such execution; (B) the Borrower intends to contract from the Government of Belgium (AGCD) a grant, in an amount of BB 600 million, in support of the Program, on the terms and conditions set forth in an Agreement (the AGCD Grant Agreement), to be entered into between the Borrower and AGCD; (C) the Borrower intends to contract from the European Development Fund (EDF) a grant, in an amount of ECU 21 million, in support of the Program, on the terms and conditions set forth in an agreement (the EDF Grant Agreement) to be entered into between the Borrower and EDF; (D) the Borrower intends to contract f rom the Government of France (CCCE) a grant, in an amount of FF 20 million, in support of the Program, on the terms and conditions set forth in an agreement (the CUCE Grant Agreement) to be entered into between the Borrower and CCCE; (E) the Borrower intends to contract from the Government of Germany (XfW) a grant, in an amount of DM 20 million in support of the Program, on the terms and conditions set forth in an agreement (the KfW Grant Agreement) to be entered into between the Borrower and KfW); (F) the Borrower intends to contract from the Government of Japan, a grant, in an amount of Yen 500 million, in support of the Program, on the terms and conditions set forth in an agreement (the Japanese Grant Agreement) to be entered into between the Borrower and the Government of Japan; and - 2 - (G) on the basis, inter alia, of the foregoing, the Asso- ciation has decided in support of the Program to provide such assistance to the Borrower by making the Credit in two tranches as hereinafter provided; 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, with the modifications thereof set forth below (the General Conditions) constitute an integral part of this Agreement: (a) Section 2.01, paragraph 9, shall be modified to read: "'Project' means the imports and other activities that may be financed out of the proceeds of the Credit pursuant to the provisions of Schedule 1 to the Development Credit Agreement."; (b) Section 9.06 (c) shall be modified to read: "(c) Not later than six months after the Closing Date or such later date as may be agreed for this purpose between the Borrower and the Association, the Borrower shall prepare and furnish to the Association a report, of such scope and in such detail as the Association shall reasonably request, on the execution of the Program referred to in the Preamble to the Development Credit Agreement, the performance by the Borrower and the Association of their respective obligations under the Development Credit Agreement and the accomplishment of the purposes of the Credit."; and (c) the last sentence of Section 3.02 is deleted. 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: -3- (a) "SITC" means the Standard International Trade Classi- fication, Revision 3 (SITC, Rev. 3), published by the United Nations in Statistical Papers, Series M, No. 34/Rev. 3 (1986); (b) "Franc Burundais" and "FBU" mean the currency of the Borrower; and (c) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement; (d) "PEP" means the Borrower's Public Investment Program for all sectors with complete Public Expenditures Program for agriculture, education, health, transportation and roads, rural development, energy and mining; (e) "SCEP" means Service Charg& des Entreprises Publiques; and (f) "BRB" means Bancue de la R&publicque du Burundi. ARTICLE II 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 twenty two million Special Drawing Rights (SDR 22,000,000). 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 as such Schedule may be amended from time to time by agreement between the Borrower and the Association. (b) The Borrower shall, for the purposes of the Program, open and maintain in Dollars a special account in BRB on terms and conditions satisfactory to the Association. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 4 to this Agreement. Section 2.03. The Closing Date shall be June 30, 1994 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. - 4 - 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 cancelled; 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 and service charges shall be payable semiannually on March 15 and September 15 in each year. Section 2.07. (a) Subject to paragraphs (b) and (c) below, the Borrower shall repay the principal amount of the Credit in semi- annual installments payable on each March 15 and September 15 commencing September 15, 2002 and ending March 15, 2032. Each installment to and including the installment payable on March 15, 2012 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 gross national product per capita, as determined by the Association, shall have exceeded $790 in constant 1985 dollars for five consecutive years, and (ii) the Bank shall consider the Borrower creditworthy for Bank lending, the -5- Association may, subsequent to the review and approval thereof by the Executive Directors of the Association and after due con- sideration by them of the development of the Borrower's economy, modify the terms of repayment of installments under paragraph (a) above by 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. If so requested by the Borrower, the Association may revise such modification 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 :he grant element obtained undcr the above-mentioned repayment modification. (c) 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 United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.09. (a) BRB is designated as representative of the Borrower for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. (b) Without limitation or restriction to the foregoing, the Borrower hereby entrusts BRB with the responsibility for the preparation of withdrawal applications under the Credit and for the collection of the documents and other evidence to be furnished to the Association in support of such applications. ARTICLE III Particular Covenants Section 3.01. (a) The Borrower and the Association shall from time to time, at the request of either party, exchange views on the progress achieved in carrying out the Program and the actions specified in Schedule 3 to this Agreement. - 6 - (b) Prior to each such exchange of views, the Borrower shall furnish to the Association for its review and comment a report on the progress achieved in carrying out the Program, in such detail as the Association shall reasonably request. Section 3.02. Except as the Association shall otherwise agree, procurement of the goods to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 2 to this Agreement. Section 3.03. (a) The Borrower shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with consistently maintained sound accounting practi!es the expenditures financed out of the proceeds of the Credit. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a) of this Section including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than six months after the end of each such year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records and accounts and the audit thereof as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; - 7 - (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 audits referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. Section 3.04. Except as the Association shall otherwise agree, the Borrower shall ensure that no actions will be taken inconsistent with the program. ARTICLE IV Additional Event of Suspension Section 4.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional events are specified: (a) an event has occurred which shall make it improbable that the Program, or a significant part thereof, will be carried out. (b) (i) Subject to subparagraph (ii) of this paragraph: (A) the right of the Borrower to withdraw the proceeds of any grant or lcan made to the Borrower for the financing of the Program shall have been suspended, cncelled or terminated in whole or in part, pursuant to the terms of the agreement providing therefor; or (B) any such loans shall have become due and payable prior to the agreed maturity thereof. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Association that: (A) such suspension, cantallation, termination or prematuring is not caused by the failure of the Borrower for performing any of its obligations under such agreement; (B) adequate funds for the Program are available to the Borrower from other sources on terms and conditions consistent with the obligations of the borrower under this Agreement. Section 4.02. Pursuant to Section 7.01 (d) of the General conditions, the following additional event is specified, namely, that any event specified in paragraph 4.01 (b) (i) (B) shall have occurred, subject to the proviso of paragraph (b) (ii) of that Section. ARTICLE V Effective Date; Termination Section 5.01. In accordance with Section 12.01 (b) of the General Conditions, effectiveness of the Development Credit Agreement is also contingent upon the following conditions: (a) the macro-economic policy framework of the Borrower is consistent with the objectives of the Program; (b) adoption by the Borrower of a revised unified budget for 1992, considered satisfactory to IDA; (c) issuance of invitations to bid for the privatization of capital of public enterprises slated for privatization in 1992, in accordance with the Program, and signature of private management contracts for those public enterprises in which management is to be privatized in 1992, in accordance with the Program, representing 14% of the Borrower's assets portfolio, and adoption by the Borrower of -9- a schedule, satisfactory to IDA, for the restructuring of 26 public enterprises listed in the Program; (d) adoption of a restructuring plan for the SCEP and a surveillance mechanism of public enterprises to be privatized or liquidated under the Program, satisfactory to the Association, and liquidation of the Intervention Fund of the SCEP. Section 5.02. The date ninety (90) days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Representatives of the Borrower; Addresses Section 6.01. Except as provided in Section 2.09 of this Agreement, the Minister of Finance is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposss of Section 11.01 of the General Conditions: F.r the Borrower: Minister of Finance B.P. 1830 Bujumbura, Burundi Telex: 5135 BDI MINFIN For the Association: International Development Association 1818 H Street, N.W. Washington, D,C. 20433 United States of America - 10 - Cable address: Telex: INDEVAS 197688 (TRT), Washington, D.C. 248423 (RCA), 64145 (WUI) or 82987 (FTCC) IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF BURUNDI By fc)j Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By S&V+\<. Regional ice President Africa - 11 - SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. Subject to the provisions set forth or referred to in this Schedule, the proceeds of the Credit may be withdrawn from the Credit Account for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required during the execution of the Program and to be financed out of such proceeds. 2. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) expenditures for goods included in the following SITC groups or sub-groups, or any successor groups or sub-groups under future revisions to the SITC, as designated by the Association by notice to the Borrower: Group Sub-group Description of Items 112 - Alcoholic beverages 121 - Tobacco, unmanufactured, tobacco refuse 122 - Tobacco, manufactured (whether or not containing tobacco substitutes) 525 - Radioactive and associated materials 667 - Pearls, precious and semi- precious stones, unworked or worked 718 718.7 Nuclear reactors, and parts thereof, fuel elements (cartridges), non-irradiated for nuclear reactors 728.43 Tobacco processing machinery - 12 - Group Sub-qroup Description of Items 897 897.3 Jewelry of gold, silver or platinum group metals (except watches and watch cases) and goldsmiths' or silversmiths' wares (including set gems) 971 Gold, non-monetary (excluding gold ores and concentrates) (b) expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower; (c) payments made for expenditures prior to the date of this Agreement, except that withdrawals in an aggregate amount not exceeding the equivalent of SDR 4.4 million may be made on account of payments made for such expenditures during the four months preceding that date; (d) expenditures for goods procured under contracts costing less than $10,000 equivalent; (e) expenditures for goods shipped prior to January 1, 1992; (f) expenditures for goods supplied under a contract which any national or international financing institution or agency other than the Association shall have financed or agreed to finance; and (g) expenditures for goods intended for a military or para- military purpose or for luxury consumption. 3. Withdrawals for expenditures under contracts for the procurement of goods estimated to cost the equivalent of less than US$1,000,000 may be permitted by the Association upon the basis of statements of expenditure under such terms and conditions as the Association shall specify. 4. No withdrawal shall be made and no commitment shall be entered into to pay amounts to or on the order of the Borrower in respect of expenditures to be financed out of the proceeds of the Credit after the aggregate of the proceeds of the Credit withdrawn from the Credit Account and the total amount of such commitments shall have reached the equivalent of SDR 8 million, unless the Association shall be satisfied, after an exchange of views as described in - 13 - Section 3.01 of this Agreement based on evidence satisfactory to the Association: (a) with the progress achieved by the Borrower in the carrying out of the Program, (b) that the actions described in Schedule 3 to this Agreement have been taken in a manner satis- factory to the Association, and (c) that the macro-economic framework of the Borrower is consistent with the objectives of the Program. 5. If, after the exchange of views described in paragraph 3 above, the Association shall have given notice to the Borrower that the progress achieved and actions taken are not satisfactory and, within 90 days after such notice, the Borrower shall not have achieved progress and taken actions satisfactory to the Association, then the Association may, by notice to the Borrower, cancel the unwithdrawn amount of the Credit or any part thereof. - 14 - SCHEDULE 2 Procurement 1. Contracts for the procurement of goods estimated to cost the equivalent of $2,000,000 or more each shall be awarded through international competitive bidding in accordance with procedures consistent with those set forth in Sections I and II of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1985 (the Guidelines), subject to the following modifications: (a) Paragraph 2.8 of the Guidelines is deleted and the following is substituted therefor: "2.8 Notification and Advertising The international community should be notified in a timely manner of the opportunity to bid. This will be done by advertising invitations to apply for inclusion in a bidder's invitation list, to apply for prequalification, or to bid; such advertisements should be placed in at least one newspaper of general circulation in the Borrower's country and, in addition, in at least one of the following forms: (i) a notice in the United Nations publication, Development Forum, Business Edition; or (ii) an advertisement in a newspaper, periodical or technical journal of wide international circulation; or (iii) a notice to local representatives of countries and territories referred to in the Guidelines, that are potential suppliers of the goods required." (b) The following is added at the end of paragraph 2.21 of the Guidelines: "As a further alternative, bidding documents may require the bidder to state the bid price in a single currency widely used in international trade and specified in the bidding documents." - 15 - (c) Paragraphs 2.55 and 2.56 of the Guidelines are deleted. 2. Contracts for the procurement of goods estimated to cost the equivalent of less than $2,000,000 shall be awarded: (a) by purchasers required to follow the Borrower's public procurement procedures for the importation of goods, on the basis of such procedures, provided that (i) such procedures shall have been found acceptable by the Association; and (ii) in case of goods estimated to cost less than the equivalent of $2,000,000 but more than the equivalent of $250,000 per contract, at least three prices quotations shall have been solicited from a list of at least three suppliers eligible under the Guidelines, except that direct contracting procedures acceptable to the Association may be used when considered appropriate under paragraph 3.5 of the Guidelines; and (b) by other purchasers, in accordance with established commercial practice, except that direct contracting procedures acceptable to the Association may be used where considered appropriate undier paragraph 3.5 of the Guidelines. 3. Subject to the prior approval of the Association, commonly traded commodities may be procured through organized international commodity markets or other channels of competitive procurement acceptable to the Association, in accordance with procedures acceptable to the Association. 4. With respect to each contract referred to in paragraph 1 of this Schedule, the Borrower shall furnish to the Association, prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids and recommendations for award, a description of the advertising and tendering procedures followed and such other information as the Association shall reasonably request. Where payments under a contract are to be made out of the proceeds of the Special Account, such copies together with the other information required to be furnished to the Association pursuant to this paragraph shall be furnished to the Association as part of the evidence required under paragraph 4 of Schedule 4 to this Agreement. 5. With respect to each contract referred to in paragraphs 2 and 3 of this Schedule, the Borrower shall furnish to the Association, prior to the submission to the Association of the first application - 16 - for withdrawal of funds from the Credit Account in respect thereof, such documentation and information as the Association may reasonably request to support withdrawal applications in respect of such contract. Where payments under a contract are to be made out of the proceeds of the Special Account, the documentation and the information to be furnished to the Association pursuant to the provisions of this paragraph shall be furnished to the Association as part of the evidence required under paragraph 4 of Schedule 4 to this Agreement. 6. The provisions of the preceding paragraph 5 of this Schedule shall not apply to contracts on account of which withdrawals from the Credit Account are to be made on the basis of statements of expenditure. 7. Preshipment inspections, for quality and quantity and price verifications by a third party inspection firm will be required for all procurement, except that goods procured under paragraph 1 of this Schedule, shall be exempted from such price inspection. - 17 - SCHEDULE 3 Actions Referred to in Paragraph 4 (b) of Schedule 1 to this Agreement (Conditions for Release of Second Tranche) 1. Adoption of (a) the Borrower's unified budget for 1993, in accordance with the following: (i) 1993-95 PEPs; (ii) a civil service recruitment ceiling of 1,000 individuals (in gross terms); (iii) a reduction of direct and indirect subsidies to public enterprises to 7% of total expenditures or FBU 4.2 billion, whichever is lower; (iv) financing of a safety net which covers priority expenditures for education and health; and (b) the Borrower's unified budget for 1994, including an increase of non- wage current expenditure for goods and services, to 30 percent of current expenditure or FBu 9.7 billion, whichever is higher. 2. Disengagement (completion of privatization or liquidation) or signature of private management contracts equivalent to 59% of the Borrower's capital assets in public enterprises, and completion of invitations to bid for the remainder of privatizations under the Program. 3. Submission to the legislative body of a revised labor code, including the elimination of regulations requiring private employers to cover 100% of the costs of medical care for employees and their families and easing of dismissal regulations, and elimination of the practice of mandatory wages fixing for various professional categories, except for a minimum wage for unskilled labor. 4. Submission to the Borrower's legislative body of a revision of the Commercial Code, including accounting books, companies regime, registration of companies, and foreign exchange regulations. 5. In accordance with the recommendations of the on-going study on fiscal reform, approved by the Borrower and the Association: (a) reduction in the custom's tariff spread for non-luxury goods; (b) adoption of a ceiling for the custom tariff for luxury products; (c) revision of the list of imported luxury goods. - 18 - 6. Submission to the Borrower's legislative body of a revised General Tax Code and adoption of other related regulations designed to eliminate inter-sectoral distortions and to promote private sector development. 7. Implementation of a financing strategy of the education and health sectors, including a definition of the respective roles of the Borrower, non-governmental organizations, the private sector and users. - 19 - SCHEDULE 4 Special Account 1. For the purposes of this Schedule: (a) the term "eligible expenditures" means expenditures in respect of the reasonable cost of goods and services required during the execution of the Program and to be financed out of the proceeds of the Credit in accordance with the provisions of Schedule 1 to this Agreement; and (b) the term "Authorized Allocation" means an amount equivalent to $4.4 million to be withdrawn from the Credit Account and deposited into the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Payments out of the Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Association has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Special Account shall be made as follows: (a) For withdrawals of the Authorized Allocation, the Borrower shall furnish to the Association a request or requests for a deposit or deposits which do not exceed the aggregate amount of the Authorized Allocation. On the basis of such request or requests, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit in the Special Account such amount or amounts as the Borrower shall have requested. (b) (i) For replenishment of the Special Account, the Borrower shall furnish to the Association requests for deposits into the Special Account at such intervals as the Association shall specify. (ii) 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 paragraph 4 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the - 20 - 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 Specig.l Account for eligible expenditures. All such deposits shall be withdrawn by the Association from the Credit Account in the respective equivalent amounts as shall have been justified by said documents and other evidence. 4. For each payment made by the Borrower out of the Special Account, the Borrower shall, at such time as the Association shall reasonably request, furnish to the Association such documents and other evidence showing that such payment was made exclusively for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Schedule, the Association shall not be required to make further deposits into the Special Account: (a) if, at any time, the Association shall have determined that all further withdrawals should be made by the Borrower directly from the Credit Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or (b) once the total unwithdrawn amount of the Credit, less the amount of any outstanding special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions with respect to the Program, 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. 6. (a) If the Association shall have determined at any time that any payment out of the Special Account: (i) was made for an - 21 - expenditure or in an amount not eligible pursuant to paragraph 2 of this Schedule; (ii) was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association: (A) provide such additional evidence as the Association may request; or (B) 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 or the portion thereof not so eligible or justified. 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 shall have determined at any time that any amount outstanding in the Special Account will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the 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 paragraphs 6 (a), (b) and (c) of this Schedule shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Development Association. FOR SECRETARY