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CONFORMED COPY
CREDIT NUMBER 3459-UG
Development Credit Agreement
(HIV/AIDS Control Project)
between
THE REPUBLIC OF UGANDA
and
INTERNATIONAL DEVELOPMENT ASSOCIATION
Dated February 15, 2001
CREDIT NUMBER 3459-UG
DEVELOPMENT CREDIT AGREEMENT
AGREEMENT, dated February 15, 2001, between THE REPUBLIC OF UGANDA (the 
Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association).
WHEREAS (A) the Borrower, having satisfied itself as to the feasibility and 
priority of the Project described in Schedule 2 to this Agreement, has requested the 
Association to assist in the financing of the Project;
(B)
the Association has received from the Borrower the following policy 
document, namely the Borrower's National Strategic Framework for HIV/AIDS Activities 
in Uganda 2000/1-2005/6, describing the Borrower’s program of actions, objectives and 
policies designed to prevent and control the HIV/AIDS epidemic (the said document 
being hereinafter referred to as the Program) and declaring the Borrower's commitment 
to the execution of the Program;
(C)
the Executive Directors of the Association approved, on  September 12, 
2000, the Multi-Country HIV/AIDS Program for the Africa Region estimated in the amount 
of SDR 378.4 million over the next three years; 
(D)
this Project is part of the Multi-Country HIV/AIDS Program for the Africa 
Region; and
WHEREAS the Association has agreed, on the basis, inter alia, of the foregoing, 
to extend the Credit to the Borrower upon the terms and conditions set forth in this 
Agreement;
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NOW THEREFORE the parties hereto hereby agree as follows:
ARTICLE I
General Conditions; Definitions
Section 1.01. The “General Conditions Applicable to Development Credit 
Agreements” of the Association, dated January 1, 1985 (as amended through October 6, 
1999), with the modifications set forth below (the General Conditions), constitute an 
integral part of this Agreement: 
(a)
A new paragraph (12) is added to Section 2.01 to read as set forth below, 
and the existing paragraphs (12) through (14) of said Section are accordingly 
renumbered as paragraphs (13) through (15):
“12.
‘Participating Country’ means any country that the Association determines 
meets 
the requirements set forth in Section 11 of Resolution No. 194 of the 
Board of Governors 
of the Association, adopted on April 8, 1999; and 
‘Participating Countries’ means, 
collectively, all such countries.” ; and
(b)
The second sentence of Section 5.01 is modified to read:
“Except as the Borrower and the Association shall otherwise agree, no 
withdrawals shall 
be made: (a) on account of expenditures in the territories 
of any country which is not a 
Participating Country or for goods produced 
in, or services supplied from, such 
territories; or (b) for the 
purpose of any payment to persons or entities, or for any 
import of goods, if 
such payment or import, to the knowledge of the Association, is 
prohibited by 
a decision of the United Nations Security Council taken under Chapter VII 
of the Charter of the United Nations.”
Section 1.02. Unless the context otherwise requires, the several terms defined 
in the General Conditions and in the Preamble to this Agreement have the respective 
meanings therein set forth and the following additional terms have the following 
meanings:
(a)
“AIDS” means the Acquired Immune Deficiency Syndrome;
(b)
“Beneficiary” means a CBO, CSO (as hereinafter defined), trade and 
professional associations, associations of persons living with HIV/AIDS, associations 
of people at high risk of, or particularly vulnerable to, HIV infection, or 
combinations of these groups, or any other relevant organization, as determined by the 
Uganda AIDS Commission (as hereinafter defined), which has met the eligibility 
criteria set out in the Project Operational Manual (as hereinafter defined) and the 
requirements of Schedule 4 to this Agreement and which, as a result, has received or 
is entitled to receive, a Grant (as hereinafter defined) for the carrying out of a 
Subproject (as hereinafter defined);
(c)
“Community Based Organization” or “CBO” means any group of two or more 
individuals, that is recognized by the District AIDS Committee (as hereinafter 
defined), and organizes itself for the purpose of submitting and implementing a 
Sub-project, under Part C of the Project;
(d)
“Civil Society Organization” or “CSO” means a national or international 
non-governmental organization established, and/or registered and operating under the 
laws of the Borrower, which is recognized by the Uganda AIDS Commission, or by a 
District HIV/AIDS Committee, as a provider of HIV-AIDS related prevention, care, and 
support;
(e)
“District” means a district established under the Borrower's Constitution 
and the Borrower's Local Governments Act of 1997;
(f)
“District HIV/AIDS Committee” or “DHAC” means a sub-committee of the 
District Technical Planning Committee (as hereinafter defined) and shall include 
representatives of the District, non-governmental organizations, community groups and 
other stakeholders, established under the laws of the Borrower to coordinate the 
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Borrower’s response to AIDS at the District level;
(g)
“District Technical Planning Committee” means the committee referred to 
in Section 37 of the Borrower’s Local Governments Act of 1997;
(h)
“Eligible Categories” means Categories (1), (2), (3), (4) and (5) set 
forth in the table in Part A.1 of Schedule 1 to this Agreement;
(i)
“Eligible Expenditures” means expenditures in respect of the reasonable 
cost of goods, works and services required for the Project and to be financed out of 
the proceeds of the Credit allocated from time to time to the eligible Categories in 
accordance with the provisions of Schedule 1 to this Agreement;
(j)
“Grant” means a grant to be made to finance a Subproject under Part C of 
the Project;
(k)
“Grant Agreement” means the agreement referred to in paragraph (6) of 
Schedule 4 to this Agreement;
(l)
“HIV”
means the Human Immuno-Deficiency Virus;
(m)
“IAPSO” means the Inter-Agency Procurement Services of the United 
Nations; 
(n)
“IEC materials” means information, education and communication materials;
(o)
“Implementing Agencies” includes UAC (as hereinafter defined), the 
Borrower's line ministries, Districts, and related agencies participating in the 
Project;
(p)
“National Strategic Framework” means the Borrower's National Strategic 
Framework for HIV/AIDS Activities in Uganda 2000/1-2005/6;
(q)
“Project Coordination Team” means consultants contracted under the 
Project by the Uganda AIDS Commission, to perform day-to-day Project-related 
coordination, facilitation, management, monitoring and evaluation activities; 
(r)
“Project Implementation Plan” means the planned schedule of Project 
activities, including responsibility, timetable, estimated costs, budget, and 
financing plan referred to in paragraph 1 of Schedule 4 to this Agreement; 
(s)
“Project Operational Manual” means the manual of procedures referred to 
in paragraph 1 of Schedule 4 to this Agreement, setting out details of all procedures, 
guidelines, processes, calendars, and criteria for the Project, including procedures, 
guidelines, eligibility and other criteria for subprojects under Part C of the 
Project;
(t)
“Project Management Report” means each report prepared in accordance with 
Section 4.02 of this Agreement;
(u)
“Special Account” means the account referred to in Part B of Schedule 1 
to this Agreement; 
(v)
“Subproject” means a program or other initiative to be carried out by 
Beneficiaries under Part C of the Project which, having met the eligibility criteria 
set out in the Project Operational Manual and the provisions of Schedule 4 to this 
Agreement, is eligible for financing, on a grant basis; 
(w)
“Uganda AIDS Commission” or “UAC” means the Uganda AIDS Commission, 
established under the Borrower's Uganda AIDS Commission Statute of March 1992; 
(x)
“UNFPA” means the United Nations Fund for Population Activities;
(y)
“UNICEF” means the United Nations Children’s Emergency Fund; and
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(z)
“WHO” means the World Health Organization.
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 thirty seven million three hundred thousand Special 
Drawing Rights (SDR 37,300,000).
Section 2.02. The amount of the Credit may be withdrawn from the Credit Account 
in accordance with the provisions of Schedule 1 to this Agreement for: (i) 
expenditures made (or, if the Association shall so agree, to be made) in respect of 
the reasonable cost of goods, works and services required for the Project and to be 
financed out of the proceeds of the Credit; and (ii) amounts paid (or, if the 
Association shall so agree, amounts to be paid) by the Borrower on account of 
withdrawals made to meet the reasonable cost of goods, works and services required for 
any Subproject in respect of which the withdrawal from the Credit Account is 
requested.
Section 2.03. The Closing Date shall be December 31, 2006 or such later date as 
the Association shall establish. The Association shall promptly notify the Borrower of 
such later date.
Section 2.04. (a) The Borrower shall pay to the Association a commitment charge 
on the principal amount of the Credit not withdrawn from time to time at a rate to be 
set by the Association as of June 30 of each year, but not to exceed the rate of 
one-half of one percent (1/2 of 1%) per annum.
(b)
The commitment charge shall accrue: (i) from the date sixty days after 
the date of this Agreement (the accrual date) to the respective dates on which amounts 
shall be withdrawn by the Borrower from the Credit Account or canceled; and (ii) at 
the rate set as of the June 30 immediately preceding the accrual date and at such 
other rates as may be set from time to time thereafter pursuant to paragraph (a) 
above. The rate set as of June 30 in each year shall be applied from the next date in 
that year specified in Section 2.06 of this Agreement.
(c)
The commitment charge shall be paid: (i) at such places as the 
Association shall reasonably request; (ii) without restrictions of any kind imposed 
by, or in the territory of, the Borrower; and (iii) in the currency specified in this 
Agreement for the purposes of Section 4.02 of the General Conditions or in such other 
eligible currency or currencies as may from time to time be designated or selected 
pursuant to the provisions of that Section.
Section 2.05. The Borrower shall pay to the Association a service charge at the 
rate of three-fourths of one percent (3/4 of 1%) per annum on the principal amount of 
the Credit withdrawn and outstanding from time to time.
Section 2.06. Commitment charges and service charges shall be payable 
semiannually on April 1 and October 1 in each year.
Section 2.07. (a) Subject to paragraphs (b), (c) and (d) below, the Borrower 
shall repay the principal amount of the Credit in semiannual installments payable on 
each April 1 and October 1 commencing April 1, 2011 and ending October 1, 2040. Each 
installment to and including the installment payable on October 1, 2020 shall be one 
percent (1%) of such principal amount, and each installment thereafter shall be two 
percent (2%) of such principal amount. 
(b)
Whenever: (i) the Borrower's per capita gross national product (GNP), as 
determined by the Association, shall have exceeded for three consecutive years the 
level established annually by the Association for determining eligibility to access 
the Association's resources; and (ii) the Bank shall consider the Borrower 
creditworthy for Bank lending, the Association may, subsequent to the review and 
approval thereof by the Executive Directors of the Association and after due 
consideration by them of the development of the Borrower's economy, modify the 
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repayment of installments under paragraph (a) above by: (A) requiring the Borrower to 
repay twice the amount of each such installment not yet due until the principal amount 
of the Credit shall have been repaid; and (B) requiring the Borrower to commence 
repayment of the principal amount of the Credit as of the first semiannual payment 
date referred to in paragraph (a) above falling six months or more after the date on 
which the Association notifies the Borrower that the events set out in this paragraph 
(b) have occurred, provided, however, that there shall be a grace period of a minimum 
of five years on such repayment of principal.
(c)
If so requested by the Borrower, the Association may revise the 
modification referred to in paragraph (b) above to include, in lieu of some or all of 
the increase in the amounts of such installments, the payment of interest at an annual 
rate agreed with the Association on the principal amount of the Credit withdrawn and 
outstanding from time to time, provided that, in the judgment of the Association, such 
revision shall not change the grant element obtained under the above-mentioned 
repayment modification.
(d)
If, at any time after a modification of terms pursuant to paragraph (b) 
above, the Association determines that the Borrower's economic condition has 
deteriorated significantly, the Association may, if so requested by the Borrower, 
further modify the terms of repayment to conform to the schedule of installments as 
provided in paragraph (a) above.
Section 2.08. The currency of the United States of America is hereby specified 
for the purposes of Section 4.02 of the General Conditions.
ARTICLE III
Execution of the Project
Section 3.01. (a) The Borrower declares its commitment to the objectives of the 
Project as set forth in Schedule 2 to this Agreement and, to this end, shall carry out 
the Project through UAC with due diligence and efficiency and in conformity with 
appropriate, administrative, financial and public health practices, and shall provide, 
promptly as needed, the funds, facilities, services and other resources required for 
the Project.
(b)
Without limitation upon the provisions of paragraph (a) of this Section 
and except as the Borrower and the Association shall otherwise agree, the Borrower 
shall carry out the Project in accordance with the Implementation Program set forth in 
Schedule 4 to this Agreement.
Section 3.02. Except as the Association shall otherwise agree, procurement of 
the goods, works and consultants’ services required for the Project and to be financed 
out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to 
this Agreement.
Section 3.03. For the purposes of Section 9.06 of the General Conditions and 
without limitation thereto, the Borrower shall:
(a)
prepare, on the basis of guidelines acceptable to the Association, and 
furnish to the Association not later than six (6) months after the Closing Date or 
such later date as may be agreed for this purpose between the Borrower and the 
Association, a plan for the future operation of the Project; and
(b)
afford the Association a reasonable opportunity to exchange views with 
the Borrower on said plan.
ARTICLE IV
Financial Covenants
Section 4.01. (a) The Borrower shall maintain or cause to be maintained records 
and accounts adequate to reflect in accordance with sound accounting practices the 
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operations, resources and expenditures in respect of the Project of the departments or 
agencies of the Borrower responsible for carrying out the Project or any part thereof.
(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, 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 Project Management Reports or 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;
(ii)
retain, until at least one year after the Association has received 
the 
audit report for the fiscal year in which the last 
withdrawal from the 
Credit Account was made, all records 
(contracts, orders, invoices, bills, 
receipts and other 
documents) evidencing such expenditures;
(iii)
enable the Association’s representatives to examine such records; 
and
(iv)
ensure that such records and accounts are included in the annual 
audit 
referred to in paragraph (b) of this Section and that the 
report of such 
audit contains a separate opinion by said 
auditors as to whether the 
Project Management Reports or 
statements of expenditure submitted during 
such fiscal year, 
together with the procedures and internal controls 
involved in 
their preparation, can be relied upon to support the related 
withdrawals.
Section 4.02. (a) Without limitation upon the provisions of Section 4.01 of this 
Agreement, the Borrower shall carry out a time-bound action plan acceptable to the 
Association for the strengthening of its financial management system for the Project 
in order to enable the Borrower, not later than December 31, 2002, or such later date 
as the Association shall agree, to prepare quarterly Project Management Reports, 
acceptable to the Association, each of which:
(i)
(A) sets forth actual sources and applications of funds for the 
Project, 
both cumulatively and for the period covered by said 
report, and projected 
sources and applications of funds for 
the Project for the six-month period 
following the period 
covered by said report, and (B) shows separately 
expenditures 
financed out of the proceeds of the Credit during the period
covered by said report and expenditures proposed to be financed out of the 
proceeds of the Credit during the six-month period following the period 
covered by said report;
(ii)
(A) describes physical progress in Project implementation, both 
cumulatively and for the period covered by said report, and 
(B) explains 
variances between the actual and previously forecast 
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implementation targets; 
and
(iii)
sets forth the status of procurement under the Project and 
expenditures 
under contracts financed out of the proceeds of the 
Credit, as at the end 
of the period covered by said report.
(b)
Upon the completion of the action plan referred to in paragraph (a) of 
this Section, the Borrower shall prepare, in accordance with guidelines acceptable to 
the Association, and furnish to the Association not later than 45 days after the end 
of each calendar quarter a Project Management Report for such period.
ARTICLE V
Other Covenants
Section 5.01. The Borrower shall cause UAC:
(a)
to take out and maintain with responsible insurers, or to make other 
provision satisfactory to the Association for, insurance against such risks and in 
such amounts as shall be consistent with appropriate practice;
(b)
to carry on its operations and conduct its affairs in accordance with 
sound administrative, financial and health service practices, under the supervision of 
qualified and experienced management assisted by competent staff in adequate numbers; 
and
(c)
at all times to operate and to maintain its facilities, equipment and 
other property, and from time to time, promptly as needed, to make all necessary 
repairs and renewals thereof, all in accordance with sound engineering and financial 
practices.
ARTICLE VI
Effective Date; Termination
Section 6.01. The following events are specified as additional conditions to the 
effectiveness of the Development Credit Agreement within the meaning of Section 12.01 
(b) of the General Conditions:
(a)
the Borrower has adopted the Project Operational Manual and the Project 
Implementation Plan in form and substance satisfactory to the Association; 
(b)
the Borrower has appointed a Project Coordination Team comprising a 
coordinator, a financial manager and controller, a monitoring and evaluation 
specialist, and a procurement specialist, all with qualifications and experience 
satisfactory to the Association; and
(c)
the Borrower has established an accounting and financial management 
system satisfactory to the Association.
Section 6.02. The date ninety (90) days after the date of this Agreement is 
hereby specified for the purposes of Section 12.04 of the General Conditions.
ARTICLE VII
Representative of the Borrower; Addresses
Section 7.01. The Minister of Finance, Planning and Economic Development of the 
Borrower is designated as representative of the Borrower for the purposes of Section 
11.03 of the General Conditions.
Section 7.02. The following addresses are specified for the purposes of Section 
11.01 of the General Conditions:
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For the Borrower:
Ministry of Finance, Planning
   and Economic Development
P.O Box 8147
Kampala
Uganda
Cable address: 
Facsimile:
FINSEC
230163
Kampala
For the Association:
International Development Association
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address:
Telex:
Facsimile:
INDEVAS
248423 (MCI) or
(202) 477-6391
Washington, D.C.
 64145 (MCI)
IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized 
representatives, have caused this Agreement to be signed in their respective names in 
the District of Columbia, United States of America, as of the day and year first above 
written.
THE REPUBLIC OF UGANDA
By /s/ Edith Ssempala
Authorized Representative
INTERNATIONAL DEVELOPMENT ASSOCIATION
By /s/ Callisto Madavo
Regional Vice President
Africa
SCHEDULE 1
Withdrawal of the Proceeds of the Credit 
A.
General
1.
The table below sets forth the Categories of items to be financed out of the 
proceeds of the Credit, the allocation of the amounts of the Credit to each Category 
and the percentage of expenditures for items so to be financed in each Category:
Amount of the
Credit Allocated
   % of
(Expressed in
Expenditures
Category
SDR Equivalent)
to be Financed
(1)
Works
   1,970,000
90%
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(2)
Goods
  16,500,000
100% of foreign
expenditures and
90% of local
expenditures
(3)
Consultants' services,
   3,140,000
100%
training and audit fees
(4)
Operating costs
   3,930,000
90%
(5)
Grants for Subprojects
   7,840,000
95%
under Part C of the
Project
(6)
Unallocated
   3,920,000
TOTAL
  37,300,000
2.
For the purposes of this Schedule:
(a)
the term “foreign expenditures” means expenditures in the currency of any 
country other than that of the Borrower for goods or services supplied from the 
territory of any country other than that of the Borrower; 
(b)
the term “local expenditures” means expenditures in the currency of the 
Borrower or for goods or services supplied from the territory of the Borrower; and
(c)
the term “Operating costs” means the incremental operating costs arising 
under the Project on account of maintenance of vehicles, fuel, equipment, office 
supplies, utilities, consumables, travel per diems and allowances, travel and 
accommodation, office rental and Project support staff recruited to work as part of 
the Project Coordination Team, excluding salaries of the Borrower's Civil Service.
3.
Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be 
made in respect of payments made for:
(a)
expenditures prior to the date of this Agreement, except that 
withdrawals, in an aggregate amount not exceeding the equivalent of SDR 1,000,000, may 
be made in respect of Categories (1), (2), (3) and (4) on account of payments made for 
expenditures before that date but after October 10, 2000; and 
(b)
expenditures for Grants under Category (5) unless: (i) the Beneficiary 
concerned has entered into a Grant Agreement with an Implementing Agency; and (ii) the 
Grant in question has been made in accordance with the procedures, guidelines and 
other provisions set out or referred to in the Project Operational Manual and this 
Agreement.
B.
Special Account
1.
The Borrower shall open and maintain in dollars a special deposit account in a 
commercial bank, on terms and conditions satisfactory to the Association including 
appropriate protection against set-off, seizure and attachment. Except as the 
Association may otherwise specify by notice to the Borrower, all withdrawals from the 
Credit Account shall be deposited by the Association into the Special Account in 
accordance with the provisions of this Schedule. Payments out of the Special Account 
shall be made exclusively for Eligible Expenditures. For each payment made by the 
Borrower out of the Special Account, the Borrower shall, at such time as the 
Association shall reasonably request, furnish to the Association such documents and 
other evidence showing that such payment was made exclusively for Eligible 
Expenditures.
2.
Except as the Association shall otherwise agree, after the Association has 
received evidence satisfactory to it that the Special Account has been duly opened, 
withdrawals from the Credit Account of amounts to be deposited into the said Special 
Account shall be made as follows:
(a)
Each application for withdrawal from the Credit Account shall be 
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supported by a Project Management Report.
(b)
Upon receipt of each application for withdrawal of an amount of the 
Credit, the Association shall, on behalf of the Borrower, withdraw from the Credit 
Account and deposit into the Special Account an amount equal to the lesser of: (i) the 
amount so requested; and (ii) the amount which the Association has determined, based 
on the Project Management Report accompanying said application, is required to be 
deposited in order to finance Eligible Expenditures during the six-month period 
following the date of such report; provided, however, that the amount so deposited, 
when added to the amount indicated by said report to be remaining in the Special 
Account, shall not exceed the equivalent of $6,000,000. Each such deposit into the 
Special Account shall be withdrawn by the Association from the Credit Account under 
one or more of the Special Account’s Eligible Categories.
3.
Notwithstanding the provisions of Part B.2 of this Schedule, the Association 
shall not be required to make further deposits into the Special Account:
(a)
if the Association determines at any time that any Project Management 
Report does not adequately provide the information required pursuant to Section 4.02 
of this Agreement;
(b)
if the Association determines at any time that all further withdrawals 
should be made by the Borrower directly from the Credit Account; or
(c)
if the Borrower shall have failed to furnish to the Association, within 
the period of time specified in Section 4.01 (b) (ii) of this Agreement, any of the 
audit reports required to be furnished to the Association pursuant to said Section in 
respect of the audit of: (A) the records and accounts for the Special Account; or (B) 
the records and accounts reflecting expenditures with respect to which withdrawals 
were made on the basis of Project Management Reports.
4.
The Association shall not be required to make further deposits into the Special 
Account in accordance with the provisions of Part B.2 of this Schedule if, at any 
time, the Association shall have notified the Borrower of its intention to suspend in 
whole or in part the right of the Borrower to make withdrawals from the Credit Account 
pursuant to Section 6.02 of the General Conditions. Upon such notification, the 
Association shall determine, in its sole discretion, whether further deposits into the 
Special Account may be made and what procedures should be followed for making such 
deposits, and shall notify the Borrower of its determination.
5.
(a)
If the Association determines at any time that any payment out of the 
Special Account was made for an expenditure which is not an Eligible Expenditure, or 
was not justified by the evidence furnished to the Association, the Borrower shall, 
promptly upon notice from the Association, provide such additional evidence as the 
Association may request, or deposit into the Special Account (or, if the Association 
shall so request, refund to the Association) an amount equal to the amount of such 
payment.
(b)
If the Association determines at any time that any amount outstanding in 
the Special Account will not be required to cover payments for Eligible Expenditures 
during the six-month period following such determination, the Borrower shall, promptly 
upon notice from the Association, refund to the Association such outstanding amount.
(c)
The Borrower may, upon notice to the Association, refund to the 
Association all or any portion of the funds on deposit in the Special Account.
(d)
Refunds to the Association made pursuant to sub-paragraph (a), (b) or (c) 
of this paragraph 5 shall be credited to the Credit Account for subsequent withdrawal 
or for cancellation in accordance with the provisions of the Development Credit 
Agreement.
Annex A to SCHEDULE 1
Operation of Special Account When Withdrawals Are 
Not Made On the Basis of Project Management Reports
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1.
For the purposes of this Annex, the term “Authorized Allocation” means, an 
amount equivalent to $2,500,000 (two million five hundred thousand dollars) to be 
withdrawn from the Credit Account and deposited into the Special Account pursuant to 
paragraph 2 of this Annex, provided, however, that unless the Association shall 
otherwise agree, the Authorized Allocation shall be limited to an amount equivalent to 
$1,250,000 until the aggregate amount of withdrawals from the Credit Account plus the 
total amount of all outstanding special commitments entered into by the Association 
pursuant to Section 5.02 of the General Conditions shall be equal to or exceed the 
equivalent of SDR 4,000,000.
2.
Withdrawals of the Special Account's Authorized Allocations and subsequent 
withdrawals to replenish the Special Account should be made as follows:
(a)
For withdrawals of said Special Account's Authorized Allocation, the 
Borrower shall furnish to the Association a request or requests for deposit into said 
Special Account of an amount or amounts which in the aggregate do not exceed said 
Authorized Allocation. On the basis of each such request, the Association shall, on 
behalf of the Borrower, withdraw from the Credit Account and deposit into said Special 
Account such amount, as the Borrower shall have requested.
(b)
For replenishment of said Special Account, the Borrower shall furnish to 
the Association requests for deposit into said Special Account at such intervals as 
the Association shall specify. Prior to or at the time of each such request, the 
Borrower shall furnish to the Association the documents and other evidence required 
pursuant to Part B.3 of Schedule 1 to this Agreement for the payment or payments in 
respect of which replenishment is requested. On the basis of each such request, the 
Association shall, on behalf of the Borrower, withdraw from the Credit Account and 
deposit into said Special Accounts 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 said Special Account for Eligible Expenditures. Each such deposit into said 
Special Account shall be withdrawn by the Association from the Credit Account under 
one or more of said Special Account's Eligible Categories.
3.
The Association shall not be required to make further deposits into the Special 
Account, once the total unwithdrawn amount of the Credit minus the total amount of all 
outstanding special commitments entered into by the Association pursuant to Section 
5.02 of the General Conditions, shall equal the equivalent of twice the amount of said 
Special Account's Authorized Allocations. 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 said Special Account as 
of the date of such notice will be utilized in making payments for Eligible 
Expenditures.
Annex B to SCHEDULE 1
Operation of Special Account When Withdrawals Are 
Made On the Basis of Project Management Reports
1.
Except as the Association may otherwise specify by notice to the Borrower, all 
withdrawals from the Credit Account shall be deposited by the Association into the 
Special Account in accordance with the provisions of Schedule 1 to this Agreement. 
Each such deposit into the Special Account shall be withdrawn by the Association from 
the Credit Account under one or more of the Special Account’s Eligible Categories.
2.
Each application for withdrawal from the Credit Account for deposit into the 
Special Account shall be supported by a Project Management Report.
3.
Upon receipt of each application for withdrawal of an amount of the Credit, the 
Association shall, on behalf of the Borrower, withdraw from the Credit Account and 
deposit into the Special Account an amount equal to the lesser of: (a) the amount so 
requested; and (b) the amount which the Association has determined, based on the 
Project Management Report accompanying said application, is required to be deposited 
in order to finance Eligible Expenditures during the six-month period following the 
date of such report; provided, however, that the amount so deposited, when added to 
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the amount indicated by said Project Management Report to be remaining in the Special 
Account, shall not exceed the equivalent of $6,000,000.
SCHEDULE 2
Description of the Project
The objectives of the Project are to assist the Borrower in carrying out the 
National Strategic Framework to: (a) reduce the spread of HIV infection; (b) mitigate 
the health and socio-economic impact of HIV/AIDS at the individual, household and 
community levels; and (c) strengthen the national capacity to respond to the epidemic.
The Project consists of the following parts, subject to such modifications 
thereof as the Borrower and the Association may agree upon from time to time to 
achieve such objectives:
Part A:
Nationally Coordinated Initiatives
Support activities designed to strengthen the capacity of the UAC to coordinate 
the multi-sector HIV/AIDS activities, and support for Implementing Agencies including 
line ministries and national and regional civil society-led prevention and care 
activities including: 
(a)
the strengthening of the capacity of UAC and the said ministries to 
develop policies and activities designed to stem the spread of the HIV/AIDS epidemic;
(b)
the preparation and implementation by UAC and the said ministries of 
work-programs enabling a sector-specific response to be made to the HIV/AIDS epidemic, 
including activities designed to prevent the spread of HIV infection, provide care and 
support for people living with HIV/AIDS and their families, HIV/AIDS-related research 
and knowledge management, and monitoring and evaluation of said activities;
(c)
the strengthening of the capacity of national and regional level Civil 
Society Organizations and the private sector to deliver prevention and care 
activities;
(d)
the provision of prevention and care activities designed to reduce the 
spread of HIV and its impact on people living with HIV/AIDS and their families; and
(e)
manage, monitor and evaluate different program components.
Part B:
District-Level Initiatives
Support for integrated, multi-sector HIV/AIDS control activities directly 
carried out, or contracted out, by District authorities, including:
(a)
training of District-based staff including: (i) teachers, health care 
professionals; (ii) rural extension and fishery workers and other workers; and (iii) 
Civil Society Organizations on HIV/AIDS control and mitigation;
(b)
training traditional birth attendants, traditional practitioners and 
volunteers to provide HIV/AIDS prevention and care activities;
(c)
provision of prevention and care activities in the Districts, including 
the provision of IEC, voluntary counseling and testing and clinical management of 
HIV/AIDS, sexually transmitted and opportunistic infections, mother to child 
transmission, home and community-based care, and orphan care; 
(d)
promotion of legal rights of orphans and people living with HIV/AIDS and 
their families;
(e)
promotion of community-led and civil society-led HIV/AIDS initiatives;
(f)
carrying out of District-based HIV/AIDS surveillance; and 
(g)
management, monitoring and evaluation of District-based HIV/AIDS 
Page  13
programs.
Part C:
Community-Led HIV/AIDS Initiatives
Support for community based organization-led, and civil society 
organization-led, HIV/AIDS control activities, including:
(a)
the provision of prevention-related activities to stem the spread of HIV; 
and
(b)
the provision of care and support for poor orphans and people living with 
HIV/AIDS and their families.
* * *
The Project is expected to be completed by June 30, 2006.
SCHEDULE 3
Procurement and Consultants’ Services
Section I.
Procurement of Goods and Works 
Part A:
General
1.
Goods and works shall be procured in accordance with: (a) the provisions of 
Section I of the “Guidelines for Procurement under IBRD Loans and IDA Credits” 
published by the Bank in January 1995 and revised in January and August 1996, 
September 1997 and January 1999 (the Guidelines); and (b) the provisions of the 
following Parts of this Section I.
2.
In paragraphs 1.6 and 1.8 of the Guidelines, the references to “Bank member 
countries” and “member country” shall be deemed to be references, respectively, to 
“Participating Countries” and “Participating Country”.
Part B:
International Competitive Bidding
1.
Except as otherwise provided in Part C of this Section, goods shall be procured 
under contracts awarded in accordance with the provisions of Section II of the 
Guidelines and paragraph 5 of Appendix 1 thereto.
2.
The following provisions shall apply to goods and works to be procured under 
contracts awarded in accordance with the provisions of paragraph 1 of this Part B.
(a)
Grouping of contracts
To the extent practicable, goods shall be grouped in bid packages estimated to 
cost $100,000 equivalent or more each.
(b)
Preference for domestically manufactured goods
The provisions of paragraphs 2.54 and 2.55 of the Guidelines and Appendix 2 
thereto shall apply to goods manufactured in the territory of the Borrower.
Part C:
Other Procurement Procedures 
1.
National Competitive Bidding
(a)
Goods estimated to cost less than $100,000 equivalent per contract, up to 
an aggregate amount not to exceed $2,200,000 equivalent, and (b) works estimated to 
cost less than $300,000 per contract, up to an aggregate amount not to exceed 
$2,000,000, may be procured under contracts awarded in accordance with the provisions 
of paragraphs 3.3 and 3.4 of the Guidelines.
2.
International or National Shopping 
Page  14
Goods estimated to cost less than $30,000 equivalent per contract, up to an 
aggregate amount not to exceed $5,500,000 equivalent, may be procured under contracts 
awarded on the basis of international or national shopping procedures in accordance 
with the provisions of paragraphs 3.5 and 3.6 of the Guidelines. 
3.
Procurement from UN Agencies
Goods estimated to cost less than $50,000 equivalent per contract, up to an 
aggregate amount not to exceed $500,000 equivalent, may be procured from IAPSO, UNFPA, 
UNICEF and WHO in accordance with the provisions of paragraph 3.9 of the Guidelines.
4.
Procurement for Emergency purposes
The following items if: (i) listed on a procurement plan for the Project 
satisfactory to the Association and determined by the Borrower and the Association as 
emergency requirements for purposes of the Project; and (ii) procured by UAC under 
contracts awarded within a period not later than 12 months after the Effective Date, 
may in the case of: (A) drugs for opportunistic infections, HIV and syphilis test kits 
and tuberculosis laboratory reagents, estimated to cost less than $200,000 (up to an 
aggregate amount not to exceed $1,000,000 equivalent) be procured through 
international shopping procedures; (B) computers and accessories, office and power 
equipment (up to an aggregate amount not to exceed $100,000 equivalent) be procured 
through shopping or from IAPSO in accordance with the provisions of paragraph 3.9 of 
the Guidelines; and  (C) vehicles (up to an aggregate amount not to exceed $350,000 
equivalent) may be procured (1) from IAPSO in accordance with the provisions of 
paragraph 3.9 of the Guidelines, and/or (2) under contracts awarded on the basis of 
national shopping procedures in accordance with the provisions of paragraphs 3.5 and 
3.6 of the Guidelines.
5.
Community Participation
Goods and works included in Subprojects and required for Part C of the Project 
shall, pursuant to paragraph 3.15 of the Guidelines, be procured in accordance with 
procedures acceptable to the Association.
6.
Procurement of Minor Works
Works estimated to cost less than $60,000 equivalent per contract, up to an 
aggregate amount not to exceed $1,000,000 equivalent, may be procured under lump-sum, 
fixed-price contracts awarded on the basis of quotations obtained from three (3) 
qualified domestic contractors in response to a written invitation. The invitation 
shall include a detailed description of the works, including basic specifications, the 
required completion date, a basic form of agreement acceptable to the Association, and 
relevant drawings, where applicable. The award shall be made to the contractor who 
offers the lowest price quotation for the required work, and who has the experience 
and resources to complete the contract successfully.
Part D:
Review by the Association of Procurement Decisions
1.
Procurement Planning
Prior to the issuance of any invitations to bid for contracts, the proposed 
procurement plan for the Project shall be furnished to the Association for its review 
and approval, in accordance with the provisions of paragraph 1 of Appendix 1 to the 
Guidelines. Procurement of all goods and works shall be undertaken in accordance with 
such procurement plan as shall have been approved by the Association, and with the 
provisions of said paragraph 1.
2.
Prior Review
With respect to each contract for: (a) goods estimated to cost the equivalent of 
$100,000 or more; or (b) works estimated to cost the equivalent of $200,000 or more, 
the procedures set forth in paragraphs 2 and 3 of Appendix 1 to the Guidelines shall 
apply.
3.
Post Review
Page  15
With respect to each contract not governed by paragraph 2 of this Part, the 
procedures set forth in paragraph 4 of Appendix 1 to the Guidelines shall apply.
Section II.
Employment of Consultants
Part A:
General
1.
Consultants’ services shall be procured in accordance with: (a) the provisions 
of the Introduction and Section IV of the “Guidelines: Selection and Employment of 
Consultants by World Bank Borrowers” published by the Association in January 1997 and 
revised in September 1997 and January 1999, subject to the modifications thereto set 
forth in paragraph 2 of this Part A (the Consultant Guidelines); and (b) the 
provisions of the following Parts of this Section II.
2.
In paragraph 1.10 of the Consultant Guidelines, the references to “Bank member 
countries” and “member country” shall be deemed to be references, respectively, to 
“Participating Countries” and “Participating Country”.
Part B:
Quality- and Cost-Based Selection
1.
Except as otherwise provided in Part C of this Section, consultants’ services 
shall be procured under contracts awarded in accordance with the provisions of Section 
II of the Consultant Guidelines, paragraph 3 of Appendix 1 thereto, Appendix 2 
thereto, and the provisions of paragraphs 3.13 through 3.18 thereof applicable to 
quality- and cost-based selection of consultants.
2.
The following provisions shall apply to consultants’ services to be procured 
under contracts awarded in accordance with the provisions of the preceding paragraph. 
The shortlist of consultants for services estimated to cost less than $100,000 
equivalent per contract, may comprise entirely national consultants in accordance with 
the provisions of paragraph 2.7 of the Consultant Guidelines.
Part C:
Other Procedures for the Selection of Consultants 
3.
Least-Cost Selection
Services of a routine nature estimated to cost less than $100,000 equivalent per 
contract and where the Association is satisfied that well established practices and 
standards and financial audits exist, may be procured under contracts awarded in 
accordance with the provisions of paragraphs 3.1 and 3.6 of the Consultant Guidelines.
4.
Selection Based on Consultants’ Qualifications
Services to be procured from firms which are estimated to cost less than 
$100,000 equivalent per contract may be procured under contracts awarded in accordance 
with the provisions of paragraphs 3.1 and 3.7 of the Consultant Guidelines.
5.
Single Source Selection
Services procured at the District level under work plans satisfactory to the 
Association, which are estimated to cost less than $5,000 equivalent per contract, up 
to an aggregate amount not to exceed $500,000, may, with the Association’s prior 
agreement, be procured in accordance with the provisions of paragraphs 3.8 through 
3.11 of the Consultant Guidelines.
6.
Individual Consultants
Services for 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 Association of the Selection of Consultants
1.
Selection Planning
Prior to the issuance to consultants of any requests for proposals, the proposed 
Page  16
plan for the selection of consultants under the Project shall be furnished to the 
Association for its review and approval, in accordance with the provisions of 
paragraph 1 of Appendix 1 to the Consultant Guidelines. Selection of all consultants’ 
services shall be undertaken in accordance with such selection plan as shall have been 
approved by the Association, and with the provisions of said paragraph 1.
2.
Prior Review
(a)
With respect to each contract for the employment of consulting firms 
estimated to cost the equivalent of $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 Association for its prior review and approval. The contract shall be 
awarded only after the said approval shall have been given.
(d)
With respect to each contract for the employment of consultants selected 
on the basis of single source selection estimated to cost the equivalent of $5,000 or 
more, shall be awarded only after prior approval of the Association.
3.
Post Review
With respect to each contract not governed by paragraph 2 of this Part, the 
procedures set forth in paragraph 4 of Appendix 1 to the Consultant Guidelines shall 
apply.
SCHEDULE 4
Implementation Program
1.
Project Operational Manual and Project Implementation Plan
(a)
The Borrower shall prepare and furnish to the Association a Project 
Operational Manual and a Project Implementation Plan in form and substance 
satisfactory to the Association setting out details of all procedures, guidelines, 
processes, timetables and criteria for the Project (including procedures, guidelines, 
eligibility and other criteria for Subprojects under Part C of the Project).
(b)
The Borrower shall ensure that the Implementing Agencies will carry out 
the Project in accordance with the Project Operational Manual and the Project 
Implementation Plan and, except as the Association shall otherwise agree, shall not 
amend or waive any provision of the Project Operational Manual and Project 
Implementation Plan if, in the opinion of the Association, such amendment or waiver 
may materially and adversely affect the carrying out of the Project or the achievement 
of the objectives thereof. 
2.
The Borrower shall:
(a)
maintain policies and procedures adequate to enable it to monitor and 
evaluate on an ongoing basis, in accordance with the indicators set forth in Schedule 
5 to this Agreement, the carrying out of the Project and the achievement of the 
objectives thereof;
(b)
prepare, under terms of reference satisfactory to the Association, and 
furnish to the Association, on or about March 15 and September 15 of each year, a 
report integrating the results of the monitoring and evaluation activities performed 
pursuant to paragraph (a) of this Section, on the progress achieved in the carrying 
out of the Project during the period preceding the date of said report and setting out 
Page  17
the measures recommended to ensure the efficient carrying out of the Project and the 
achievement of the objectives thereof during the period following such date; and
(c)
review with the Association, by April 15 and October 15 of each year, or 
such later date as the Association shall otherwise agree, the report referred to in 
paragraph (b) of this Section, 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 Association’s 
views on the matter.
3.
Project Management and Implementation – Coordinating Agencies
(a)
UAC shall be responsible for the overall coordination of the Borrower's 
National HIV/AIDS program and all activities under the Project. 
(b)
The UAC Director General, assisted by a Project coordinator, shall serve 
as Project director. The Project coordinator shall be supported by a Project 
coordination team. 
4.
The Borrower shall establish and maintain an advisory Project steering committee 
which shall consist of: (i) a chairman who shall be the Permanent Secretary of the 
Office of the President; and (ii) representatives from key sectors and institutions, 
as well as representatives from key civil society organizations, including those which 
represent people living with AIDS. The Project coordinator shall serve as the 
secretary of the Project steering committee and shall ensure that recommendations of 
the Committee are implemented by the Project coordination team.
5.
The Borrower shall cause all Implementing Agencies to prepare and furnish to UAC 
an annual work plan in form and substance satisfactory to the Association. 
6.
Provisions of Grant Agreements 
(a)
The Borrower shall ensure that a Grant for financing a subproject shall 
be made by an Implementing Agency to a Beneficiary, under an agreement, satisfactory 
to the Association, to be entered into between the Implementing Agency and the 
Beneficiary (the Grant Agreement).
(b)
The Grant Agreement shall provide for rights adequate to protect the 
interests of the Association, the Borrower and Implementing Agency, including to the 
extent that it shall be appropriate to require the Beneficiary to:
(i)
carry out the Subproject with due diligence and efficiency and in 
accordance with sound administrative, financial, health, 
technical and 
managerial standards; 
(ii)
maintain adequate records for the Subproject concerned;
(iii)
procure all goods, works and services required for a Subproject or 
activity 
in accordance with the provisions of Schedule 3 to this 
Agreement;
(iv)
use the goods, works and services so procured exclusively in the 
carrying 
out of the Subproject or activity; and
(v)
permit UAC or the Borrower to inspect, by itself or jointly with 
representatives of the Association if the Association shall 
so request, any 
goods, works, plants and construction included in the 
Subproject or 
activity, the operation thereof, and any 
relevant records and documents.