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CONFORMED COPY
TF023907
Trust Fund Grant Agreement
(Emergency Farm Reconstruction Project)
between
UNITED NATIONS INTERIM 
ADMINISTRATION IN KOSOVO
and
INTERNATIONAL DEVELOPMENT ASSOCIATION
(Acting as Administrator for the Trust Fund for Kosovo)
Dated July 25, 2000
TF023907
TRUST FUND GRANT AGREEMENT
AGREEMENT, dated as of July 25, 2000, between UNITED NATIONS INTERIM 
ADMINISTRATION IN KOSOVO (the Recipient) and INTERNATIONAL DEVELOPMENT ASSOCIATION 
(the Administrator).
WHEREAS (A) the Board of Governors of the International Bank for Reconstruction 
and Development and the International Development Agency, acting on the recommendation 
of its Board of Executive Directors, decided on September 30, 1999, to transfer from 
Bank surplus, by way of grant, $25,000,000 to a trust fund (the Trust Fund) for 
Kosovo, Federal Republic of Yugoslavia (Serbia and Montenegro) (Kosovo), established 
by Resolutions of the Executive Directors of the Bank (Resolution No. 99-7) and the 
Association (Resolution No. IDA 99-4), to be administered by the Administrator, to be 
used for financing an emergency reconstruction program in the territory of Kosovo; 
(B)
the Recipient, having satisfied itself as to the feasibility and priority 
of the project described in Schedule 2 to this Agreement (the Project), has requested 
the Administrator to assist in financing of the Project; 
(C)
in order to assist in the financing of the Project, the Recipient intends 
to enter into agreements (the Cofinancing Agreements) with other external agencies and 
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donors, providing the Recipient with the total amount equivalent up to fifteen million 
Dollars ($15,000,000); and
WHEREAS the Administrator has agreed, on the basis, inter alia, of the foregoing 
to extend the Grant to the Recipient upon the terms and conditions set forth in this 
Agreement;
NOW THEREFORE the parties hereto hereby agree as follows:
ARTICLE I
General Conditions; Definitions
Section 1.01.  The General Conditions (the General Conditions) set forth in 
Schedule 4 to this Agreement constitute an integral part of this Agreement.
Section 1.02.  Unless the context otherwise requires, the several terms defined 
in the Preamble to this Agreement and the General Conditions, have the respective 
meanings therein set forth and the following additional terms have the following 
meanings:
(a)
“FAO” means the Food and Agricultural Organization of the United Nations;
(b)
“Project Management Report” or “PMR” means each report prepared in 
accordance with Section 4.02.(b) of this Agreement; and
(c)
“Service Agreement” means the agreement to be entered into between the 
Recipient and FAO, pursuant to Section 3.02 (a) of this Agreement, as the same 
agreement may be amended from time to time, and such term includes all schedules 
supplemental to the Service Agreement.
Section 1.03. Each reference in the General Conditions to the Project 
implementation entity shall be deemed as a reference to FAO.
ARTICLE II
The Grant
Section 2.01.  The Administrator agrees to make available to the Recipient, on a 
grant basis and on the terms and conditions set forth or referred to in this 
Agreement, a grant in the amount of ten million Dollars ($10,000,000).
Section 2.02.  The amount of the Grant may be withdrawn from the Grant Account 
in accordance with the provisions of Schedule 1 to this Agreement for expenditures 
made (or, if the Administrator shall so agree, to be made), in respect of the 
reasonable cost of goods, services, works and incremental operating costs required for 
the Project.
Section 2.03.  The Closing Date shall be December 31, 2001, or such later date 
as the Administrator shall establish.  The Administrator shall promptly notify the 
Recipient of such later date.
Section 2.04.  The Chief of Project Accounting Group, Finance Division, FAO, and 
any person or persons whom he or she shall designate in writing is designated as 
representative of the Recipient for the purposes of taking any action required or 
permitted to be taken under the provisions of Section 2.02 of this Agreement and 
Section 1.06 of the General Conditions.
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ARTICLE III
Execution of the Project
Section 3.01. The Recipient declares its commitment to the objectives of the 
Project, and, to this end, without any limitation or restriction upon any of its other 
obligations under this Agreement, shall implement the Project through FAO with due 
diligence and efficiency and in conformity with appropriate administrative, financial, 
environmental and health practices, and shall provide, promptly as needed, the funds, 
facilities, services and other resources required for the Project, in accordance with 
this Agreement.
Section 3.02. (a) Without limitation upon the provisions of Section 3.01 and 
except as the Recipient and the Administrator shall otherwise agree, the Recipient 
shall make the proceeds of the Grant available to FAO under a service agreement (the 
Service Agreement) to be entered into between the Recipient and FAO, under terms and 
conditions satisfactory to the Administrator, which shall include provisions regarding 
FAO Project implementation responsibility and related compensation and other payments 
to FAO, FAO financial and reporting requirements, and Project auditing requirements.
(b)
The Recipient shall exercise its rights under the Service Agreement in 
such manner as to protect the interests of the Recipient and the Administrator and to 
accomplish the purposes of the Grant, and, except as the Administrator shall otherwise 
agree, the Recipient shall not assign, amend, abrogate or waive the Service Agreement 
or any provision thereof.
Section 3.03. Except as the Administrator shall otherwise agree, procurement of 
goods, works and consultants’ services required for the Project and to be financed out 
of the proceeds of the Grant shall be governed by the provisions of Schedule 3 to this 
Agreement.
Section 3.04. For the purposes of Section 1.23 of the General Conditions and 
without limitation thereto, the Recipient shall:
(a)
(i)
maintain policies and procedures adequate to enable it to monitor 
and 
evaluate on an ongoing basis, in accordance with the 
indicators agreed upon 
from time to time between the Recipient and 
the Administrator, the carrying 
out of the Project and the achievement 
of the objectives thereof; 
(ii)
prepare, under terms of reference satisfactory to the 
Administrator, and 
furnish to the Administrator, on or about 
February 28, 2001, a report 
integrating the results of the 
monitoring and evaluation activities 
performed pursuant 
to subparagraph (i) of this paragraph, on the progress 
achieved in the carrying out of the Project during the period preceding the 
date of said report and setting out the measures recommended to ensure the 
efficient carrying out of the Project and the achievement of the 
objectives 
thereof during the period following such date; and
(iii)
review with the Administrator, by March 31, 2001, or such later 
date as the 
Administrator shall request, the report referred to in 
subparagraph (ii) of 
this paragraph, and, thereafter, take all 
measures required to ensure the 
efficient completion of the 
Project and the achievement of the objectives 
thereof, based on 
the conclusions and recommendations of the said report 
and 
the Administrator’s views on the matter.
(b)
(i)
prepare, on the basis of guidelines acceptable to the 
Administrator, and 
furnish to the Administrator not later than 
six (6) months after the 
Closing Date or such later date as may 
be agreed for this purpose between 
the Recipient and the 
Administrator, a plan designed to ensure the 
continued 
achievement of the Project’s objectives; and
(ii)
afford the Administrator a reasonable opportunity to exchange 
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views with 
the Recipient on said plan.
ARTICLE IV
Financial Covenants
Section 4.01. (a) The Recipient shall ensure that FAO maintains a financial 
management system, including records and accounts, and prepares financial statements, 
all in accordance with accounting standards acceptable to the Administrator, 
consistently applied, adequate to reflect the operations, resources and expenditures 
related to the Project.
(b) 
The Recipient shall ensure that FAO:
(i)
has the records, accounts and financial statements referred to in 
paragraph 
(a) of this Section for each fiscal year audited, in 
accordance with 
auditing standards acceptable to the 
Administrator consistently applied, by 
independent auditors acceptable 
to the Administrator;
(ii)
as soon as available, but in any case not later than six (6) 
months after 
the end of each such year, has (A) certified copies 
of the financial 
statements referred to in paragraph (a) of 
this Section for such year as so 
audited; and (B) an opinion on such 
statements, records and accounts, and 
report of such audit by 
said auditors of such scope and in such detail as 
the 
Administrator shall have reasonably requested furnished to the 
Administrator; and
(iii)
furnish to the Administrator such other information concerning 
said records 
and accounts, and the audit thereof, and concerning said 
auditors, as the 
Administrator shall from time to time 
reasonably request.
(c)
For all expenditures with respect to which withdrawals from the Grant 
Account were made on the basis of statements of expenditure, the Recipient shall 
ensure that:
(i)
in accordance with paragraph (a) of this Section, records and 
separate 
accounts reflecting such expenditures are maintained;
(ii)
until at least one (1) year after the Administrator has received 
the audit 
report for the fiscal year in which the last 
withdrawal from the Grant 
Account was made, all records 
(contracts, orders, invoices, bills, receipts 
and other documents) 
evidencing such expenditures are retained; 
(iii)
the Administrator’s representatives are able to examine such 
records; and
(iv)
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 such fiscal 
year, together with the procedures 
and internal controls involved in 
their preparation, can be relied upon to 
support the related 
withdrawals.
Section 4.02. (a) Without limitation upon the provisions of Section 4.01 of this 
Agreement, the Recipient shall not later than September 30, 2000, or such later date 
as the Administrator shall agree, prepare quarterly Project Management Reports, 
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acceptable to the Administrator, 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 (B) shows 
separately expenditures financed out of 
the proceeds of the Grant during 
the period covered by said 
report;
(ii)
describes physical progress in Project implementation, both 
cumulatively 
and for the period covered by said report; and
(iii)  sets forth the status of procurement under the Project and 
expenditures 
under contracts financed out of the proceeds of the 
Grant, 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 Recipient shall prepare, in accordance with guidelines acceptable to 
the Administrator and furnish to the Administrator not later than forty-five (45) days 
after the end of each calendar quarter a Project Management Report for such period.
ARTICLE V
Remedies of the Administrator
Section 5.01. Pursuant to Section 1.15 (c) of the General Conditions, the 
following additional events are specified:
(a)
the Service Agreement shall have been amended, suspended, abrogated, 
repealed or waived so as to affect materially and adversely the ability of FAO to 
perform any of the obligations under this Agreement;
(b)
FAO shall have failed to perform any of its material obligations under 
the Service Agreement;
(c)
the Cofinancing Agreements shall have failed to become effective by 
December 31, 2000, or such later date as the Administrator may agree; provided, 
however, that the provisions of this paragraph shall not apply if the Recipient 
establishes to the satisfaction of the Administrator that: (i) adequate funds for the 
Project are available to the Recipient from other sources on terms and conditions 
consistent with the obligations of the Borrower under this Agreement; or (ii) that 
Project activities may be adjusted without materially affecting the accomplishment of 
the objectives of the Project; and
(d)
(i)
Subject to subparagraph (ii) of this paragraph, the right of the 
Recipient 
under the Cofinancing Agreements to withdraw the 
proceeds of any grant made 
to the Recipient for the financing of 
the Project shall have been 
suspended, canceled or 
terminated in whole or in part, pursuant to the 
terms of the 
Cofinancing Agreement providing therefor.
(ii)
Subparagraph (i) of this paragraph shall not apply if the 
Recipient 
establishes to the satisfaction of the 
Association that: (A) such 
suspension, cancellation 
or termination is not caused by the failure of the 
Recipient to perform 
any of its obligations under the Cofinancing 
Agreements; 
and adequate funds for the Project are available to the 
Recipient from other sources on terms and conditions consistent with the 
obligations of the Recipient under this Agreement; or (B) that Project 
activities may be adjusted without materially affecting the 
accomplishment 
of the objectives of the Project.
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ARTICLE VI
Effectiveness; Termination
Section 6.01. This Agreement shall not become effective until evidence 
satisfactory to the Administrator shall have been furnished to the Administrator that 
FAO and the Recipient shall have entered into the Service Agreement. 
Section 6.02.  (a)  Except as the Recipient and the Administrator shall 
otherwise agree, this Agreement shall enter into effect on the date on which the 
Administrator dispatches to the Recipient notice of the Administrator’s acceptance of 
the evidence furnished to the Administrator pursuant to Section 6.01 of this 
Agreement.
(b)
If, before the Effective Date, any event shall have occurred which would 
have entitled the Administrator to suspend the right of the Recipient to make 
withdrawals from the Grant Account if this Agreement had been effective, the 
Administrator may postpone the dispatch of the notice referred to in paragraph (a) of 
this Section until such event or events shall have ceased to exist.
Section 6.03.  If this Agreement shall not have entered into effect within 
ninety (90) days after the date of this Agreement, the Agreement and all obligations 
of the parties thereunder shall terminate, unless the Administrator, after 
consideration of the reasons for the delay, shall establish a later date for the 
purposes of this Section.  The Administrator shall promptly notify the Recipient of 
such later date.
ARTICLE VII
Representative of the Recipient; Addresses
Section 7.01.  Other than for the purposes of Section 2.04 of this Agreement, 
the Special Representative of the Secretary-General of the United Nations for Kosovo 
is designated as representative of the Recipient for the purposes of any modification 
or amplification of the provisions of this Agreement referred to in Section 1.28 of 
the General Conditions, and the Deputy Special Representative of the 
Secretary-General, Head of UNMIK Pillar II, Civil Administration is designated as 
representative of the Recipient for any other actions referred to in Section 1.28 of 
the General Conditions.
Section 7.02.  The following addresses are specified for the purposes of Section 
1.25 of the General Conditions:
For the Recipient:
UNMIK Pristina
c/o UN Liaison Office in Skopje
M.H. Jasmin BB
ZGRABA NA NIP NOVA
Macedonia
9100 Skopje
Former Yugoslav Republic of Macedonia
Facsimile:
21 963-8113
21 963-8603
For the Administrator:
International Development Association
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1818 H Street, N.W.
Washington, D.C.  20433
United States of America
Cable address:
Telex:
Facsimile:
INDEVAS
248423 (MCI) or
1-202-477-6391
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, as 
of the day and year first above written.
UNITED NATIONS INTERIM ADMINISTRATION IN KOSOVO
By /s/ Bernard Kouchner
Authorized Representative
INTERNATIONAL DEVELOPMENT ASSOCIATION
By /s/ Christiaan J. Poortman
Authorized Representative
SCHEDULE 1
Withdrawal of the Proceeds of the Grant
1.
The table below sets forth the Categories of items to be financed out of the 
Grant, the allocations of the amount of the Grant to each Category and the percentage 
of expenditures for items so to be financed in each Category: 
Amount of the 
Grant Allocated
   % of
(Expressed in
Expenditures
Category
Dollars)
to be Financed
(1)
Goods, including
  6,000,000
100%
technical services and
local transport 
(2)
Consultants’ services,
  1,400,000
100%
including training
(3)
Incremental operating
  1,300,000
100%
costs
(4)
Works
    100,000
100%
(5)
Unallocated
  1,200,000
TOTAL
 10,000,000
2.
Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be 
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made in respect of payments made for expenditures prior to the date of this Agreement.
3.
For the purposes of this Schedule: 
(a)
the term “Incremental operating costs” means reasonable incremental 
expenses incurred by FAO on behalf of the Recipient under the Service Agreement in 
connection with Project management and implementation, including the cost of: (i) FAO 
consultants’ services related to the project management; (ii) office and vehicles 
operating costs; (iii) communications; (iv) dissemination of information; (v) FAO 
headquarters staff support costs; (vi) auditing services; and (vii) other ordinary, 
reasonable and necessary activities directly related to Project implementation, 
management and monitoring, and possible termination;
(b)
the term “training” means fees of consultants, including educational, or 
other institutions and organizations, that provide training services, cost of study 
tours, cost of workshops, and related travel expenditures, and boarding, lodging and 
per diem allowances.
4.
The Administrator may require withdrawals from the Grant Account to be made on 
the basis of statements of expenditure for: (a) contracts for goods, including 
technical services, costing less than $200,000 equivalent; (b) contracts for 
consulting firms costing less than $100,000 equivalent; (c) consultants’ contracts for 
individuals costing less than $50,000 equivalent; (d) contracts for all incremental 
operating costs, training costs and contracts for works, all under such terms and 
conditions as the Administrator shall specify by notice to the Recipient.
SCHEDULE 2
Description of the Project
The objective of the Project is to assist the Recipient to re-establish 
agricultural production in Kosovo, and re-launch of the rural economy in Kosovo, and, 
consequently, to stimulate growth in on-farm employment, increase rural incomes, 
reduce dependency on food aid and improve the food security of rural households. 
The Project consists of the following parts, subject to such modifications 
thereof as the Recipient and the Administrator may agree upon from time to time to 
achieve such objectives:
Part A:
Re-stocking of the Cattle Herd 
Purchasing of cattle for distribution, on a grant basis, to families in selected 
municipalities in Kosovo, in accordance with eligibility criteria satisfactory to the 
Administrator, and the provision of after-delivery care for such cattle, through the 
financing of goods and services.
Part B:
Rehabilitation of Veterinary Services 
Provision of veterinary equipment and drugs to private veterinarians in Kosovo, 
through the rehabilitation and equipping of one central diagnostic laboratory and 
three regional public animal health centers, through the financing of goods, works and 
services. 
Part C:
Farm Machinery Repair and Replacement  
Repair of damaged farm machinery and distribution of new farm machinery, on a 
grant basis, to beneficiaries in Kosovo, in accordance with eligibility criteria 
satisfactory to the Association, in selected municipalities in Kosovo, through the 
financing of goods and services.
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Part D:
Institution Capacity Building  
Institutional strengthening and refurbishing of the Recipient’s Department of 
Agriculture through the financing of goods, works and services.
Part E:
Project Management
Assistance in the management and implementation of the Project, monitoring and 
compliance verification through the financing of incremental operating costs, 
including external auditing services.
* * *
The Project is expected to be completed by June 30, 2001.
SCHEDULE 3
Procurement and Consultants’ Services
Section I.
Procurement of Goods and Works
Part A:
General
Goods and works shall be procured in accordance with the provisions of Section I 
of the “Guidelines for Procurement under IBRD Loans and IDA Credits” published by the 
Bank in January 1995 and revised in January and August 1996, September 1997 and 
January 1999 (the Guidelines) and the provisions of the following Parts of this 
Section I.
Part B:
International Competitive Bidding
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.
Part C:
Other Procurement Procedures 
1.
Limited International Bidding
Goods, which the Bank agrees can only be purchased from a limited number of 
suppliers, may be procured under contracts awarded in accordance with the provisions 
of paragraph 3.2 of the Guidelines.
2.
International Shopping
Technical services estimated to cost less than $200,000 equivalent per contract, 
up to an aggregate amount not to exceed $550,000 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
Technical services estimated to cost less than $20,000 equivalent per contract, 
up to an aggregate amount not to exceed $50,000, may be procured under contracts 
awarded on the basis of national shopping provisions of paragraphs 3.5 and 3.6 of the 
Guidelines.
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4.
Direct Contracting
Technical services which are urgently needed to respond to emergency situations 
will be procured in accordance with the provisions of paragraph 3.7 of the Guidelines.
5.
Procurement of Small Works
Works estimated to cost less than $50,000 equivalent per contract, up to an 
aggregate amount not to exceed $100,000 equivalent, may be procured under lump-sum, 
fixed-price or unit rates 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 Bank, and relevant drawings, where applicable. The award shall be made to the 
contractor who offers the lowest price quotation for the required work, and who has 
the experience and resources to complete the contract successfully.
Part D:
Review by the Association of Procurement Decisions
1.
Procurement Planning
Prior to the issuance of any invitations to bid for contracts, the proposed 
procurement plan for the Project shall be furnished to the Association for its review 
and approval, in accordance with the provisions of paragraph 1 of Appendix 1 to the 
Guidelines. Procurement of all goods and works shall be undertaken in accordance with 
such procurement plan as shall have been approved by the Association, and with the 
provisions of said paragraph 1.
2.
Prior Review
With respect to all contracts for Part B and Part C.1 of this Section, 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
Consultants’ services shall be procured in accordance with the provisions of the 
Introduction and Section IV of the “Guidelines:  Selection and Employment of 
Consultants by World Bank Borrowers” published by the Administrator in January 1997 
and revised in September 1997 and January 1999 (the Consultant Guidelines) and the 
following provisions of Section II of this Schedule.
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
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1.
Quality-based Selection
Services for management of farm machinery repairs shall be procured under 
contracts awarded in accordance with the provisions of paragraphs 3.1 through 3.4 of 
the Consultant Guidelines.
2.
Single Source Selection
Services for project management, support in cattle distribution and follow-up 
with machinery delivery may, with the Bank’s prior agreement be procured in accordance 
with the provisions of paragraphs 3.8 through 3.11 of the Consultant Guidelines.
3.
Individual Consultants
Agricultural advisory services and other tasks that meet the requirements set 
forth in paragraph 5.1 of the Consultant Guidelines may 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 Bank of the Selection of Consultants
1.
Selection Planning
Prior to the issuance to consultants of any requests for proposals, the proposed 
plan for the selection of consultants under the Project shall be furnished to the 
Association for its review and approval, in accordance with the provisions of 
paragraph 1 of Appendix 1 to the Consultant Guidelines.  Selection of all consultants’ 
services shall be undertaken in accordance with such selection plan as shall have been 
approved by the Association, and with the provisions of said paragraph 1.
2.
Prior Review
(a)
With respect to each contract estimated to cost the equivalent of 
$200,000 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 consulting firms 
estimated to cost the equivalent of $100,000 or more, but less than the equivalent of 
$200,000, the procedures set forth in paragraphs 1, 2 (other than the second 
subparagraph of paragraph 2 (a)) and 5 of Appendix 1 to the Consultant Guidelines 
shall apply.
(c)
With respect to each contract for the employment of individual 
consultants estimated to cost the equivalent of $50,000 or more, the qualifications, 
experience, terms of reference and terms of employment of the consultants shall be 
furnished to the Bank for its prior review and approval. The contract shall be awarded 
only after said approval shall have been given. 
3.
Post Review
With respect to each contract not governed by paragraph 2 of this Part, the 
procedures set forth in paragraph 4 of Appendix 1 to the Consultant Guidelines shall 
apply.
SCHEDULE 4
General Conditions
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Section 1.01.  Application of General Conditions
Without limitation or restriction upon the scope of any other provisions of this 
Agreement, these General Conditions set forth certain basic terms and conditions 
applicable to this Agreement.
Section 1.02.  Definitions
The following terms have the following meanings wherever used in these General 
Conditions:
(a)
“Administrator” means the International Development Association, acting 
as administrator of the Trust Fund.
(b)
“Grant” means the grant provided for in this Agreement.
(c)
“Dollars” and the sign “$” mean dollars in the currency of the United 
States of America.
(d) 
“Grant Account” means the account opened by the Administrator on its 
books in the name of the Recipient to which the amount of the Grant is credited.
(e)
“Project” means the project for which the Grant is made, as described in 
Schedule 2 to this Agreement and as the description thereof may be amended from time 
to time by agreement between the Recipient and the Administrator.
(f)
“Taxes” includes imposts, levies, fees and duties of any nature, whether 
in effect at the date of this Agreement or thereafter imposed.
(g)
“Closing Date” means the date specified in Section 2.03 of this Agreement 
after which the Administrator may, by notice to the Recipient, terminate the right of 
the Recipient to withdraw from the Grant Account.
Section 1.03. Grant Account
The amount of the Grant shall be credited to the Grant Account and may be 
withdrawn therefrom by the Recipient as provided in this Agreement and in these 
General Conditions.
Section 1.04. Currencies in which Withdrawals are to be Made
Except as the Recipient and the Administrator shall otherwise agree, withdrawals 
from the Grant Account shall be made in the respective currencies in which the 
expenditures to be financed out of the proceeds of the Grant have been paid or are 
payable. 
Section 1.05.  Valuation of Currencies 
Whenever it shall be necessary for the purposes of this Agreement to determine 
the value of one currency in terms of another, such value shall be as reasonably 
determined by the Administrator.
Section 1.06.  Withdrawal from the Grant Account
The Recipient shall be entitled to withdraw from the Grant Account amounts 
expended or, if the Administrator shall so agree, amounts to be expended for the 
Project in accordance with the provisions of this Agreement and of these General 
Conditions. Except as the Administrator and the Recipient shall otherwise agree, no 
withdrawals shall be made: (a) on account of expenditures in the territories of any 
country which is not a member of the Association 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 Administrator, is prohibited by a decision of the United Nations Security Council 
taken under Chapter VII of the Charter of the United Nations.
Section 1.07.  Special Commitments by the Administrator
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Upon the Recipient’s request and upon such terms and conditions as shall be 
agreed upon between the Recipient and the Administrator, the Administrator may enter 
into special commitments in writing to pay amounts to the Recipient or others in 
respect of expenditures to be financed out of the proceeds of the Grant 
notwithstanding any subsequent suspension or cancellation by the Administrator or the 
Recipient.
Section 1.08.  Applications for Withdrawal or for Special Commitment
When the Recipient shall desire to withdraw any amount from the Grant Account or 
to request the Administrator to enter into a special commitment pursuant to Section 
1.06 of the General Conditions, the Recipient, or the person designated under Section 
2.04 of this Agreement, shall deliver to the Administrator a written application in 
such form, and containing such statements and agreements, as the Administrator shall 
reasonably request. Applications for withdrawal, including the documentation required 
therefor, shall be made promptly in relation to expenditures for the Project.
Section 1.09.  Reallocation
Notwithstanding the allocation of an amount of the Grant or the percentages for 
withdrawal set forth or referred to in this Agreement, if the Administrator has 
reasonably estimated that the amount of the Grant then allocated to any withdrawal 
category set forth in this Agreement or added thereto by amendment will be 
insufficient to finance the agreed percentage of all expenditures in that category, 
the Administrator may, by notice to the Recipient:
(a)
reallocate to such category, to the extent required to meet the estimated 
shortfall, proceeds of the Grant which are then allocated to another category and 
which in the opinion of the Administrator are not needed to meet other expenditures; 
and
(b)
if such reallocation cannot fully meet the estimated shortfall, reduce 
the percentage for withdrawal then applicable to such expenditures in order that 
further withdrawals under such category may continue until all expenditures thereunder 
shall have been made.
Section 1.10.  Evidence of Authority to Sign Applications for Withdrawal
The Recipient shall furnish to the Administrator evidence of the authority of 
the person or persons authorized to sign applications for withdrawal and the 
authenticated specimen signature of any such person.
Section 1.11.  Supporting Evidence
The Recipient shall furnish to the Administrator such documents and other 
evidence in support of the application as the Administrator shall reasonably request, 
whether before or after the Administrator shall have permitted any withdrawal 
requested in the application.
Section 1.12.  Sufficiency of Applications and Documents
Each application and the accompanying documents and other evidence must be 
sufficient in form and substance to satisfy the Administrator that the Recipient is 
entitled to withdraw from the Grant Account the amount applied for and that the amount 
to be withdrawn from the Grant Account is to be used only for the purposes specified 
in this Agreement.
Section 1.13.  Treatment of Taxes
It is the policy of the Administrator that no proceeds of the Grant shall be 
withdrawn on account of payments for any taxes levied in the territory in which the 
Recipient is located on goods or services, or on the importation, manufacture, 
procurement or supply thereof. To that end, if the amount of any taxes levied on or in 
respect of any item to be financed out of the proceeds of the Grant decreases or 
increases, the Administrator may, by notice to the Recipient, increase or decrease the 
percentage for withdrawal set forth or referred to in respect of such item in this 
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Agreement as required to be consistent with such policy of the Administrator.
Section 1.14.  Payment by the Administrator
The Administrator shall pay the amounts withdrawn by the Recipient from the 
Grant Account only to or on the order of the Recipient.
Section 1.15.  Suspension by the Administrator
If any of the following events of suspension shall have occurred and be 
continuing, the Administrator may, by notice to the Recipient, suspend in whole or in 
part the right of the Recipient to make withdrawals from the Grant Account:
(a)
The Recipient shall have failed to perform any obligation under this 
Agreement. 
(b)
As a result of events which have occurred after the date of this 
Agreement, an extraordinary situation shall have arisen which shall make it improbable 
that the Project can be carried out or that the Recipient will be able to perform its 
obligations under this Agreement.
(c)
Any other event specified in this Agreement for the purposes of this 
Section shall have occurred. 
The right of the Recipient to make withdrawals from the Grant Account shall continue 
to be suspended in whole or in part, as the case may be, until the event or events 
which gave rise to suspension shall have ceased to exist, unless the Administrator 
shall have notified the Recipient that the right to make withdrawals has been restored 
in whole or in part, as the case may be.
Section 1.16.  Cancellation by the Administrator
If (a) the right of the Recipient to make withdrawals from the Grant Account 
shall have been suspended with respect to any amount of the Grant for a continuous 
period of thirty days, or (b) at any time, the Administrator determines, after 
consultation with the Recipient, that an amount of the Grant will not be required to 
finance the Project’s costs to be financed out of the proceeds of the Grant, or (c) at 
any time, the Administrator determines, with respect to any contract to be financed 
out of the proceeds of the Grant, that corrupt or fraudulent practices were engaged in 
by representatives of the Recipient or of a beneficiary of the Grant during the 
procurement or the execution of such contract, without the Recipient having taken 
timely and appropriate action satisfactory to the Administrator to remedy the 
situation, and establishes the amount of expenditures in respect of such contract 
which would otherwise have been eligible for financing out of the proceeds of the 
Grant, or (d) at any time, the Administrator determines that the procurement of any 
item is inconsistent with the procedures set forth or referred to in this Agreement 
and establishes the amount of the expenditures in respect of such item which would 
otherwise have been eligible for financing out of the proceeds of the Grant or, (e) 
after the Closing Date, an amount of the Grant shall remain unwithdrawn from the Grant 
Account, the Administrator may, by notice to the Recipient, terminate the right of the 
Recipient to make withdrawals with respect to such amount. Upon the giving of such 
notice, such amount of the Grant shall be cancelled.
Section 1.17.  Amounts Subject to Special Commitment not Affected by 
Cancellation or Suspension by the Administrator
No cancellation or suspension by the Administrator shall apply to amounts 
subject to any special commitment entered into by the Administrator pursuant to 
Section 1.07 of the General Conditions except as expressly provided in such 
commitment.
Section 1.18.  Effectiveness of Provisions after Suspension or Cancellation
Notwithstanding any cancellation or suspension, all the provisions of this 
Agreement shall continue in full force and effect except as specifically provided in 
this Agreement.
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Section 1.19.  Cooperation and Information
(a)
The Recipient and the Administrator shall cooperate fully to assure that 
the purposes of the Grant will be accomplished. To that end, the Recipient and the 
Administrator shall:
(i)
from time to time, at the request of any one of them, exchange 
views with 
regard to the progress of the Project, the purposes 
of the Grant, and the 
performance of their respective 
obligations under this Agreement; and 
furnish to the other party 
all such information related thereto as it shall 
reasonably request; 
and
(ii)
promptly inform each other of any condition which interferes with, 
or 
threatens to interfere with, the matters referred to in 
paragraph (i) 
above.
Section 1.20.  Insurance
The Recipient shall insure or cause to be insured, or make adequate provision 
for the insurance of, the imported goods to be financed out of the proceeds of the 
Grant against hazards incident to the acquisition, transportation and delivery thereof 
to the place of use or installation. Any indemnity for such insurance shall be payable 
in a freely usable currency to replace or repair such goods.
Section 1.21.  Use of Goods, Works and Services
Except as the Administrator shall otherwise agree, the Recipient shall cause all 
goods, works and services financed out of the proceeds of the Grant to be used 
exclusively for the purposes of the Project.
Section 1.22.  Plans and Schedules
The Recipient shall furnish, or cause to be furnished, to the Administrator 
promptly upon their preparation, the plans, specifications, reports, contract 
documents and construction and procurement schedules for the Project, and any material 
modifications thereof or additions thereto, in such detail as the Administrator shall 
reasonably request.
Section 1.23.  Records and Reports
(a)
The Recipient shall: (i) maintain records and procedures adequate to 
record and monitor the progress of the Project (including its cost and the benefits to 
be derived from it), to identify the goods, works or services financed out of the 
proceeds of the Grant, and to disclose their use in the Project; (ii) enable the 
Administrator’s representatives to visit any facilities and construction sites 
included in the Project and to examine the goods financed out of the proceeds of the 
Grant and any plants, installations, sites, works, buildings, property, equipment, 
records and documents relevant to the performance of the obligations of the Recipient 
under this Agreement; and (iii) furnish to the Administrator at regular intervals all 
such information as the Administrator shall reasonably request concerning the Project, 
its cost and, where appropriate, the benefits to be derived from it, the expenditure 
of the proceeds of the Grant and the goods, works and services financed out of such 
proceeds.
(b)
Upon the award of any contract for goods, works or services to be 
financed out of the proceeds of the Grant, the Administrator may publish a description 
thereof, the name and nationality of the party to which the contract was awarded and 
the contract price.
(c) 
Promptly after completion of the Project, but in any event not later than 
six months after the Closing Date or such later date as may be agreed for this purpose 
between the Recipient and the Administrator, the Recipient shall prepare and furnish 
to the Administrator a report, of such scope and in such detail as the Administrator 
shall reasonably request, on the execution and initial operation of the Project, its 
cost and the benefits derived and to be derived from it, the performance by the 
Recipient and the Administrator of their respective obligations under this Agreement 
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and the accomplishment of the purposes of the Grant.
Section 1.24.  Maintenance
The Recipient shall at all times operate and maintain, or cause to be operated 
and maintained, any facilities relevant to the Project, and promptly as needed, make 
or cause to be made all necessary repairs and renewals thereof.
Section 1.25.  Land Acquisition
The Recipient shall cause to be taken all such action as shall be necessary to 
acquire as and when needed all such land and rights in respect of land as shall be 
required for carrying out the Project and shall furnish to the Administrator, promptly 
upon its request, evidence satisfactory to the Administrator that such land and rights 
in respect of land are available for purposes related to the Project.
Section 1.26.  Notices and Requests
Any notice or request required or permitted to be given or made under this 
Agreement and any other agreement between the parties contemplated by this Agreement 
shall be in writing. Such notice or request shall be deemed to have been duly given or 
made when it shall be delivered by hand or by mail, telegram, cable, telex or 
facsimile to the party to which it is required or permitted to be given or made at 
such party’s address specified in this Agreement, or at such other address as such 
party shall have designated by notice to the party giving such notice or making such 
request. Delivery made by facsimile transmission shall be confirmed by mail.
Section 1.27.  Evidence of Authority
The Recipient shall furnish to the Administrator sufficient evidence of the 
authority of the person or persons who will, on behalf of the Recipient, take any 
action or execute any documents required or permitted to be taken or executed by the 
Recipient under this Agreement, and the authenticated specimen signature of each such 
person.
Section 1.28.  Action on Behalf of the Recipient
Any action required or permitted to be taken, and any documents required or 
permitted to be executed, under this Agreement on behalf of the Recipient may be taken 
or executed by the representative of the Recipient designated in this Agreement for 
the purposes of this Section or any person thereunto authorized in writing by such 
representative. Any modification or amplification of the provisions of this Agreement 
may be agreed to on behalf of the Recipient by written instrument executed on behalf 
of the Recipient by the representative so designated or any person thereunto 
authorized in writing by such representative, provided that, in the opinion of such 
representative, such modification or amplification is reasonable in the circumstances 
and will not substantially increase the obligations of the Recipient under this 
Agreement. The Administrator may accept the execution by such representative or other 
person of any such instrument as conclusive evidence that in the opinion of such 
representative any modification or amplification of the provisions of this Agreement 
effected by such instrument is reasonable in the circumstances and will not 
substantially increase the obligations of the Recipient thereunder.
Section 1.29.  Settlement of Disputes
Any dispute arising out of, or relating to, this Agreement, which is not settled 
by agreement of the parties shall be finally settled by arbitration in accordance with 
the UNCITRAL Arbitration Rules as at present in force.
Section 1.30.  Execution in Counterparts
This Agreement may be executed in several counterparts, each of which shall be 
an original.
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