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CONFORMED COPY
TF022689
Japanese Grant Agreement
(Health Care Reform Project)
between
REPUBLIC OF UZBEKISTAN
and
INTERNATIONAL BANK FOR RECONSTRUCTION
AND DEVELOPMENT
as Administrator of Grant Funds
provided by JAPAN
Dated September 20, 1995
TF022689
JAPANESE GRANT AGREEMENT
AGREEMENT, dated September 20, 1995, between REPUBLIC OF UZBEKISTAN (the 
Recipient) and the INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank) 
acting as Administrator (the Administrator) of grant funds provided by JAPAN (Japan).
WHEREAS (A) pursuant to a letter agreement dated July 30, 1990 between Japan and 
the Bank and International Development Association (the Association), Japan has 
requested the Bank and the Association, and the Bank and the Association have agreed, 
to administer grant funds to be made available by Japan for the financing of certain 
programs and projects supported by the Bank and the Association, as the case may be, 
in accordance with the provisions of such letter agreement;
WHEREAS (B) Japan has agreed to make available to the Recipient a grant out of 
said grant funds (the Grant) to finance the cost of carrying out the technical 
assistance described in Schedule 2 to this Agreement (the Technical Assistance) on the 
terms and conditions hereinafter set forth;
NOW THEREFORE the parties hereto hereby agree as follows:
ARTICLE I
General Conditions; Definitions
Section 1.01. (a) The following provisions of the General Conditions Applicable 
to Loan and Guarantee Agreements of the Bank, dated January 1, 1985, with the 
modifications set forth in paragraph (b) of this Section (the General Conditions) 
constitute an integral part of this Agreement:
(i)
Article I;
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(ii)
Sections 2.01 (1), (2), (3), (4), (6), (8), (9), (10), (11), (18) 
and (20), 2.02 and 2.03;
(iii)
Section 3.01;
(iv)
Section 4.01 and the first sentence of Section 4.09;
(v)
Article V;
(vi)
Sections 6.01, 6.02 (a), (c), (d), (e), (f), (i) and (k), 6.03, 
6.04 and 6.06;
(vii)
Section 8.01 (b);
(viii)Sections 9.01 (a) and (c), 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09;
(ix)
Sections 10.01, 10.03 and 10.04; and
(x)
Article XI.
(b)
The General Conditions shall be modified as follows:
(i)
the term "Bank," wherever used in the General Conditions, other 
than in Sections 2.01 (8) and 6.02 (f) thereof and the last use of 
such term in Section 5.01 thereof, means the International Bank 
for Reconstruction and Development acting as Administrator of the 
Grant pursuant to the letter agreement between Japan and the Bank 
and the Association referred to in Recital (A) of this Agreement, 
except that in Section 6.02, the term "Bank" shall also include 
the International Bank for Reconstruction and Development acting 
in its own capacity;
(ii)
the term "Borrower," wherever used in the General Conditions, 
means the Recipient;
(iii)
the term "Loan Agreement," wherever used in the General 
Conditions, means this Agreement;
(iv)
the term "Loan," wherever used in the General Conditions, means 
the Grant;
(v)
the term "Loan Account," wherever used in the General Conditions, 
means the Grant Account, an account opened by the Administrator on 
its books in the name of the Recipient to which the amount of the 
Grant is credited;
(vi)
the term "Project," wherever used in the General Conditions, means 
the technical assistance described in Schedule 2 to this 
Agreement; and
(vii)
Section 4.01 shall be modified to read:
"Withdrawals from the Grant Account shall be made in yen; 
provided, however, that if the expenditures to be financed out of the 
Grant have been paid or are payable in another currency, the 
Administrator shall, at the request of the Recipient, purchase such 
currency with the proceeds of such withdrawal."
Section 1.02. Wherever used in this Agreement, unless the context otherwise 
requires, the several terms defined in the General Conditions and in the Recitals to 
this Agreement have the respective meanings therein set forth; and the following 
additional terms have the following meanings:
(a)
"Special Account" means the account referred to in Section 2.02 (b) of 
this Agreement; and
(b)
"Yen" and "¥" mean the currency of Japan.
ARTICLE II
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The Grant
Section 2.01. The Administrator agrees to make available to the Recipient, on 
the terms and conditions set forth or referred to in this Agreement, the Grant in an 
amount of seventy-six million nine hundred thousand Yen (¥76,900,000).
Section 2.02. (a) The amount of the Grant may be withdrawn from the Grant 
Account in accordance with the provisions of Schedule 1 to this Agreement, as such 
Schedule may be amended from time to time by agreement between the Recipient and the 
Administrator, for expenditures made (or, if the Administrator shall so agree, to be 
made) in respect of the reasonable cost of carrying out the Project and to be financed 
out of the Grant.
(b)
The Recipient may, for the purposes of the Project, open and maintain in 
dollars a special deposit account in a bank satisfactory to the Administrator on terms 
and conditions satisfactory to the Administrator, including appropriate protection 
against set-off, seizure or attachment. 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, 1996 or such later date as the 
Administrator shall establish.  The Administrator shall promptly notify the Recipient 
of such later date.
ARTICLE III
Execution of the Project
Section 3.01. The Recipient shall carry out the Project with due diligence and 
efficiency and in conformity with appropriate administrative, financial, engineering 
and health practices, and shall provide, promptly as needed, the funds, facilities, 
services and other resources required for the Project. 
Section 3.02. Except as the Administrator shall otherwise agree, procurement of 
consultants' services required for the Project and to be financed out of the Grant 
shall be governed by the provisions of Schedule 3 to this Agreement.
Section 3.03. (a) The Recipient shall maintain or cause to be maintained records 
and accounts adequate to reflect in accordance with sound accounting practices the 
operations, resources and expenditures in respect of the Project of the departments or 
agencies of the Recipient responsible for carrying out the Project or any part 
thereof.
(b)
The Recipient shall:
(i)
have the records and accounts referred to in paragraph (a) of this 
Section and those for the Special Account for each fiscal year 
audited, in accordance with appropriate auditing principles 
consistently applied, by independent auditors acceptable to the 
Administrator;
(ii)
furnish to the Administrator as soon as available, but in any case 
not later than four months after the end of each such year, the 
report of such audit by said auditors, of such scope and in such 
detail as the Administrator shall have reasonably requested;
(iii)
furnish to the Administrator such other information concerning 
said records and accounts and the audit thereof as the 
Administrator shall from time to time reasonably request; and
(iv)
ensure that such records and accounts are included in the annual 
audit referred to in paragraph (b) of this Section and that the 
report of such audit contains a separate opinion by said auditors 
as to whether the statements of expenditure submitted during 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. Without limitation upon the applicable provisions of Article IX of 
the General Conditions, the Recipient shall:
(a)
prepare, on the basis of guidelines acceptable to the Administrator, and 
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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 for the future operation of the Project;
(b)
afford the Administrator a reasonable opportunity to exchange views with 
the Recipient on said plan; and
(c)
thereafter, carry out said plan with due diligence and efficiency and in 
accordance with appropriate practices, taking into account the Administrator's 
comments thereon.
ARTICLE IV
Effectiveness; Termination
Section 4.01. This Agreement shall become effective upon its execution by the 
parties hereto.
Section 4.02.  This Agreement shall continue in effect until the Grant has been 
fully disbursed and the parties to this Agreement have fulfilled all their obligations 
hereunder.
ARTICLE V
Representation
Section 5.01. The Minister of Finance of the Recipient is designated as 
representative of the Recipient for the purposes of Section 11.03 of the General 
Conditions.
Section 5.02. The following addresses are specified for the purposes of Section 
11.01 of the General Conditions:
For the Recipient:
Ministry of Finance
Mustakillik Meydani
Tashkent
Republic of Uzbekistan
Telex:
116360 IKBOL
For the Administrator:
International Bank for
  Reconstruction and Development
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address:
Telex:
INTBAFRAD
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 as 
of the day and year first above written.
REPUBLIC OF UZBEKISTAN
By /s/ B.H. Hamidov
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Authorized Representative
INTERNATIONAL BANK FOR RECONSTRUCTION
  AND DEVELOPMENT
as Administrator of the Grant
By /s/ Y. Huang
Authorized Representative
SCHEDULE 1
Withdrawal of the Grant
1.
The table below sets forth the Categories of items to be financed out of the 
Grant, the allocation 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
   % of
 Grant Allocated 
Expenditures
Category
(Expressed in Yen)
to be Financed
(1)
Consultants’
   65,400,000
100%
services
(2)
Training
   11,500,000
100%
TOTAL
   76,900,000
2.
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.
SCHEDULE 2
Description of Technical Assistance
The objective of the Technical Assistance is to assist the Recipient in the 
preparation of a Health Care Reform Project.
The Technical Assistance consists of the following activity, subject to such 
modifications thereof as the Recipient and the Administrator may agree from time to 
time to achieve such objectives:
Part A:
Strengthening Health Services
Strengthening the health services by: (i) definition and design of the basic 
package of services; (ii) review of pharmaceutical sector and drug needs; (iii) 
inventory of facilities and equipment, and development of rationalization plans; (iv) 
development plan for human resources, including health training activities and needs; 
(v) management strengthening requirements; (vi) analysis of expenditures and resource 
allocations including cost recovery design; and (vii) development of new programs.
Part B:
Provision of Consultant Services
Provision of consultant services for the preparation of Project documents. 
SCHEDULE 3
Consultants' Services
Employment of Consultants
1.
In order to assist the Recipient in carrying out the Project, the Recipient 
shall employ consultants whose qualifications, experience and terms and conditions of 
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employment shall be satisfactory to the Administrator. Such consultants shall be 
selected in accordance with principles and procedures satisfactory to the 
Administrator on the basis of the "Guidelines for the Use of Consultants by World Bank 
Borrowers and by the World Bank as Executing Agency" published by the Bank in August 
1981 (the Consultant Guidelines). For complex time-based assignments, the Recipient 
shall employ such consultants under contracts using the standard form of contract for 
consultants' services issued by the Bank, with such modifications as shall have been 
agreed by the Administrator. Where no relevant standard contract documents have been 
issued by the Bank, the Recipient shall use other standard forms agreed with the 
Administrator.
2.
Notwithstanding the provisions of paragraph 1 of this Section, the provisions of 
the Consultant Guidelines requiring prior Administrator review or approval of budgets, 
short lists, selection procedures, letters of invitation, proposals, evaluation 
reports and contracts, shall not apply to: (a) contracts for the employment of 
consulting firms estimated to cost less than $30,000 equivalent each; or (b) contracts 
for the employment of individuals estimated to cost less than $15,000 equivalent each. 
However, said exceptions to prior Administrator review shall not apply to: (a) the 
terms of reference for such contracts; (b) single-source selection of consulting 
firms; (c) assignments of a critical nature, as reasonably determined by the 
Administrator; (d) amendments to contracts for the employment of consulting firms 
raising the contract value to $40,000 equivalent or above; or (e) amendments to 
contracts for the employment of individual consultants raising the contract value to 
$25,000 equivalent or above.
SCHEDULE 4
Special Account
1.
For the purposes of this Schedule:
(a)
the term "eligible Categories" means Categories (1) and (2) set forth in 
the table in paragraph 1 of Schedule 1 to this Agreement;
(b)
the term "eligible expenditures" means expenditures in respect of the 
reasonable cost of services required for the Project and to be financed out of the 
amount of the Grant allocated from time to time to the eligible Categories in 
accordance with the provisions of Schedule 1 to this Agreement; and
(c)
the term "Authorized Allocation" means an amount equivalent to $100,000 
to be withdrawn from the Grant Account and deposited into the Special Account pursuant 
to paragraph 3 (a) of this Schedule, provided, however, that unless the Administrator 
shall otherwise agree, the Authorized Allocation shall be limited to an amount 
equivalent to $50,000 until the aggregate amount of withdrawals from the Grant Account 
plus the total amount of all outstanding special commitments entered into by the 
Administrator pursuant to Section 5.02 of the General Conditions shall be equal to or 
exceed the equivalent of ¥15,000,000.
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 Administrator 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 Recipient shall furnish 
to the Administrator a request or requests for deposit into the Special Account of an 
amount or amounts which do not exceed the aggregate amount of the Authorized 
Allocation. On the basis of such request or requests, the Administrator shall, on 
behalf of the Recipient, withdraw from the Grant Account and deposit in the Special 
Account such amount or amounts as the Recipient shall have requested.
(b)
(i)
For replenishment of the Special Account, the Recipient shall 
furnish to the Administrator requests for deposits into the 
Special Account at such intervals as the Administrator shall 
specify.
(ii)
Prior to or at the time of each such request, the Recipient shall 
furnish to the Administrator 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 Administrator shall, on behalf of 
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the Recipient, withdraw from the Grant Account and deposit into 
the Special Account such amount as the Recipient shall have 
requested and as shall have been shown by said documents and other 
evidence to have been paid out of the Special Account for eligible 
expenditures. All such deposits shall be withdrawn by the 
Administrator from the Grant Account under the respective eligible 
Categories, and in the respective equivalent amounts, as shall 
have been justified by said documents and other evidence.
4.
For each payment made by the Recipient out of the Special Account, the Recipient 
shall, at such time as the Administrator shall reasonably request, furnish to the 
Administrator 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 
Administrator shall not be required to make further deposits into the Special Account:
(a)
if, at any time, the Administrator shall have determined that all further 
withdrawals should be made by the Recipient directly from the Grant Account in 
accordance with the provisions of Article V of the General Conditions and paragraph 
(a) of Section 2.02 of this Agreement;
(b)
if the Recipient shall have failed to furnish to the Administrator within 
the period of time specified in Section 3.03 (b) (ii) of this Agreement, any of the 
audit reports required to be furnished to the Administrator pursuant to said Section 
in respect of the audit of the records and accounts for the Special Account;
(c)
if, at any time, the Administrator shall have notified the Recipient of 
its intention to suspend in whole or in part the right of the Recipient to make 
withdrawals from the Grant Account pursuant to the provisions of Section 6.02 of the 
General Conditions; or
(d)
once the total unwithdrawn amount of the Grant allocated to the eligible 
Categories minus the total amount of all outstanding special commitments entered into 
by the Administrator pursuant to Section 5.02 of the General Conditions with respect 
to the Project, shall equal the equivalent of twice the amount of the Authorized 
Allocation.
Thereafter, withdrawal from the Loan Account of the remaining unwithdrawn amount of 
the Grant allocated to the eligible Categories shall follow such procedures as the 
Administrator shall specify by notice to the Recipient. Such further withdrawals shall 
be made only after and to the extent that the Administrator 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 Administrator shall have determined at any time that any payment 
out of the Special Account: (i) was made for an expenditure or in an amount not 
eligible pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the 
evidence furnished to the Administrator, the Recipient shall, promptly upon notice 
from the Administrator: (A) provide such additional evidence as the Administrator may 
request; or (B) deposit into the Special Account (or, if the Administrator shall so 
request, refund to the Administrator) an amount equal to the amount of such payment or 
the portion thereof not so eligible or justified.  Unless the Administrator shall 
otherwise agree, no further deposit by the Administrator into the Special Account 
shall be made until the Recipient has provided such evidence or made such deposit or 
refund, as the case may be.
(b)
If the Administrator 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 Recipient shall, promptly upon notice from the 
Administrator, refund to the Administrator such outstanding amount.
(c)
The Recipient may, upon notice to the Administrator, refund to the 
Administrator all or any portion of the funds on deposit in the Special Account.
(d)
Refunds to the Administrator made pursuant to paragraphs 6 (a), (b) and 
(c) of this Schedule shall be credited to the Grant Account for subsequent withdrawal 
or for cancellation in accordance with the relevant  provisions of this Agreement, 
including the General Conditions.
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