Page  1
CONFORMED COPY
GEF TRUST FUND GRANT NUMBER TF 050371 UG
Global Environment Facility
Trust Fund Grant Agreement
(Energy for Rural Transformation Project)
between
THE REPUBLIC OF UGANDA
and
INTERNATIONAL BANK FOR RECONSTRUCTION
AND DEVELOPMENT
acting as an Implementing Agency of the Global Environment Facility
Dated December 20, 2001
GEF TRUST FUND GRANT NUMBER 050371 UG
GLOBAL ENVIRONMENT FACILITY TRUST FUND 
GRANT AGREEMENT
AGREEMENT, dated December 20, 2001 between THE REPUBLIC OF UGANDA (the 
Recipient) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank) acting 
as an implementing agency of the Global Environment Facility (GEF) in respect of grant 
funds provided to the GEF Trust Fund by certain members of the Bank as participants of 
the GEF.
WHEREAS (A) the Bank, pursuant to Resolution No. 91-5 of March 14, 1991 of the 
Executive Directors of the Bank, established the GEF to assist in the protection of 
the global environment and promote thereby environmentally sound and sustainable 
economic development;
(B)
following the restructuring of the GEF, such arrangements continued in 
place on the basis set forth in Resolution No. 94-2 of May 24, 1994, of the Executive 
Directors of the Bank which, inter alia, established the GEF Trust Fund and appointed 
the Bank as trustee of the GEF Trust Fund (Resolution No. 94-2);
(C)
the second replenishment of the GEF Trust Fund was approved on the basis 
set forth in Resolution No. 98-2 of July 14, 1998, of the Executive Directors of the 
Bank (Resolution No. 98-2);
(D)
the Bank has received from the Recipient a letter, dated April 4, 2001, 
describing a program of actions, objectives and policies designed to reform and 
improve the provision of energy for the transformation of the rural sector of its 
economy (the Program) and declaring the Recipient's commitment to the execution of the 
Program;
Page  2
(E)
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 
assistance from the resources of the GEF Trust Fund for funding the Project, and said 
request having been approved in accordance with the provisions of the Instrument for 
the Establishment of the Restructured Global Environment Facility approved under 
Resolution 94-2, and to be funded from contributions to the GEF Trust Fund under 
Resolution No. 98-2, which may include funds carried over from the first replenishment 
of the GEF Trust Fund under Resolution No. 94-2;
(F)
The Recipient has also requested the International Development 
Association (the Association) to provide additional financing towards the financing of 
the Project, and by an agreement (the Development Credit Agreement) of even date 
herewith between the Recipient and the Association, the Association has agreed to 
provide such assistance in an aggregate amount equivalent to thirty-eight million 
three hundred thousand Special Drawing Rights (SDR 38,300,000);
(G)
Part G.1 of the Project will be carried out by the Private Sector 
Foundation (PSF) with the Recipient’s assistance, and as part of such assistance, the 
Recipient will make available to PSF part of the proceeds of the GEF Trust Fund Grant 
as provided in this Agreement; and
WHEREAS the Bank has agreed, on the basis, inter alia, of the foregoing, to 
extend the GEF Trust Fund Grant to the Recipient upon the terms and conditions set 
forth in this Agreement and in the Project Agreement between the Bank and PSF (the GEF 
Project Agreement);
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 for Currency Pool Loans of the Bank, dated January 1, 
1985, (as amended through October 6, 1999) with the modifications set forth in 
paragraph (b) of this Section (the General Conditions) constitute an integral part of 
this Agreement:
(i)
Article I;
(ii)
Sections 2.01 (2), (3), (6), (8), (9), (10), (15), (16), (17), 
(19) 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, (c), (e), (f), (i), (l), (m), (n), (o) and 
(p), 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; 
(x)
Article XI; and
(xi)
Sections 12.01 (c), 12.03 and 12.04.
(b)
The General Conditions shall be modified as follows:
(i)
a new paragraph shall be added to the end of Section 2.01 to read 
as follows: "the term "Special Drawing Rights" and the symbol 
"SDR" mean special drawing rights as valued by the International 
Monetary Fund in accordance with its Articles of Agreement";
(ii)
the term "Bank", wherever used in the General Conditions, other 
Page  3
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 Bank acting as an 
implementing agency of the GEF, except that in Section 6.02, the 
term "Bank" shall also include the Bank acting in its own 
capacity;
(iii)
the term "Recipient ", wherever used in the General Conditions, 
means the Recipient;
(iv)
the term "Loan Agreement", wherever used in the General 
Conditions, means this Agreement;
(v)
the term "Loan" and "loan", wherever used in the General 
Conditions, means the GEF Trust Fund Grant;
(vi)
the term "Loan Account", wherever used in the General Conditions, 
means the GEF Trust Fund Grant Account;
(vii)
The second sentence of Section 5.01 is modified to read: "Except 
as the Bank 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 Bank 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 Bank, is prohibited by a decision of the 
United Nations Security Council taken under Chapter VII of the 
Charter of the United Nations.";
(viii)a new subparagraph is added after subparagraph (o) in Section 6.02 
of the General Conditions, as follows: "an extraordinary situation 
shall have arisen in which any further disbursement under the GEF 
Trust Fund Grant would exceed the resources available for 
disbursement from the GEF."; and
(ix)
Section 11.01 is modified by replacing, in the second sentence, 
the word "radiogram" with the word "facsimile" and adding a new 
sentence at the end of the said Section to read:
"Deliveries made by facsimile transmission shall also be confirmed by mail."
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)
"Credit Support Facility" means the Credit Support Facility to be 
established pursuant to Part G.2 (b) of the Project;
(b)
"Eligible Categories" means: (i) Categories (1) (a) and (3) (a) set forth 
in the table in Part A.1 of Schedule 1 to this Agreement and in respect of the 
MEMD/REA Special Account (as hereinafter defined); and (ii) Categories (1) (b), (2), 
(3) (b) and 4 set forth in the table in Part A.1 of Schedule 1 to this Agreement and 
in respect of the PSF Special Account (as hereinafter defined);
(c)
"Eligible Enterprise" means a private sector enterprise, operator or 
investor which has met the eligibility criteria set out in the Project Implementation 
Plan and the requirements of Schedule 4 to this Agreement and, as a result, has been 
approved for, or has been made, a Grant (as hereinafter defined) or a Subloan (as 
hereinafter defined) for the carrying out of a Subproject, as hereinafter defined;
(d)
"Eligible Expenditures" means the expenditures for goods, works and 
services referred to in Section 2.02 of this Agreement;
(e)
"ESMF "means the Environmental and Social Management Framework or adopted 
on May 2001 by MEMD (as hereinafter defined);
(f)
"GEF Project Agreement" means the agreement between the Bank and PSF of 
even date herewith, as the same may be amended from time to time, and such term 
includes all schedules and agreements supplemental to the GEF Project Agreement;
Page  4
(g)
"GEF Subsidiary Financing Agreement" means the agreement to be entered 
into between the Recipient and PSF pursuant to Section 3.01 (d) of this Agreement, as 
the same may be amended from time to time, and such term includes all schedules 
supplemental to the GEF Subsidiary Financing Agreement;
(h)
"Grant" means a grant made, or proposed to be made, to an eligible 
enterprise out of the proceeds of the GEF Trust Fund for the financing of a Subproject 
(as hereinafter defined);
(i)
"Grant Agreement" means an agreement for a Grant referred to in Part B.4 
of Schedule 4 to this Agreement;
(j)
"IAPSO" means the Inter-Agency Procurement Services Office of the United 
Nations;
(k)
"ICT" means information and communication technologies;
(l)
"MEMD" means the Recipient’s Ministry of Energy and Mineral Development; 
(m)
"MEMD/REA Special Account means the Special Account to be opened in the 
name of MEMD/REA pursuant to Part B.1 of Schedule 1 to this Agreement;
(n)
"Midterm Review" means the midterm review referred to in: (i) paragraph 
C.6 (c) of Schedule 4 to this Agreement; and (ii) paragraph 3 of the Schedule to the 
GEF Project Agreement;
(o)
"NGO" means a Non-Governmental Organization;
(p)
"Private Sector Foundation" or "PSF" means the Private Sector Foundation, 
a company limited by guarantee established and operating under the laws of the 
Recipient and its Memorandum and Articles of Association dated August 24, 1995;
(q)
"Project Account" means the account to be opened in the name of PSF under 
Section 3.03 (a) of this Agreement; 
(r)
"Project Implementation Plan" means the Project Implementation Plan 
referred to in Part A.1 of Schedule 4 to this Agreement; 
(s)
"Project Management Report" means each report prepared in accordance with 
Section 4.02 of this Agreement; 
(t)
"Project Year" means the 12 month period beginning from the Effective 
Date and ending 12 months thereafter and each successive 12 month period following 
thereafter;
(u)
"PSF Special Account " means the Special Account to be opened in the name 
of PSF pursuant to Part B.1 of Schedule 1 to this Agreement;
(v)
"Rural Communications Development Fund" or "RCDF" means the fund to be 
established by UCC (as hereinafter defined) pursuant to Section 5 of the Uganda 
Communications Act No. 8, 1997 of the Recipient;
(w)
"Rural Electrification Agency" or "REA" means the Rural Electrification 
Agency established pursuant to the Recipient’s Electricity (Establishment and 
Management of the Rural Electrification Fund) Instrument, 2001, Statutory Instrument 
No. 75 of 2001;
(x)
"Rural Electrification Board" or "RE Board" means the Board to be 
established by the Minister of MEMD under the Recipient’s Statutory Instrument No. 75 
of 2001, referred to in (w) above;
(y)
"Rural Electrification Fund" or "REF" means the Rural Electrification 
Fund to be established pursuant to Section 65 of the Electricity Act, Act No. 6 of 
1999 of the Recipient;
(z)
"Special Accounts" means the MEMD/REA Special Account and the PSF Special 
Account;
(aa)
"Subloan Agreement" means an agreement for a Subloan (as hereinafter 
defined) referred to in Part B.4 of Schedule 4 to this Agreement;
(bb)
"Subloan" means a subloan made, or proposed to be made, by a PFI to an 
Page  5
eligible enterprise out of the proceeds of the Credit for the financing of a 
Subproject;
(cc)
"Subproject" means a scheme, activity or service financed, or proposed to 
be financed through (i) Grants made under Parts A, B or C of the Project, (ii) 
Subloans made through through the credit support facility under G.2 (b) of the Project  
which meets the criteria set forth in the Project Implementation Plan; and
(dd)
"Uganda Communications Commission" or "UCC" mean the Uganda 
Communications Commission established under Section 4 of the Uganda Communications Act 
of 1997.
ARTICLE II
The GEF Trust Fund Grant
Section 2.01. The Bank agrees to make available to the Recipient, on the terms 
and conditions set forth or referred to in this Agreement, the GEF Trust Fund Grant in 
an amount in various currencies equivalent to nine million five hundred thousand 
Special Drawing Rights (SDR 9,500,000).
Section 2.02. (a) The amount of the GEF Trust Fund Grant may be withdrawn from 
the GEF Trust Fund Grant Account in accordance with the provisions of Schedule 1 to 
this Agreement for: (i) expenditures made (or, if the Bank shall so agree, to be made) 
in respect of the reasonable cost of goods, works and services required for carrying 
out the Project described in Schedule 2 to this Agreement and to be financed out of 
the proceeds of the GEF Trust Fund Grant; and (ii) amounts paid (or, if the Bank shall 
so agree, amounts to be paid) by the Recipient 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 GEF Trust Fund Grant Account is requested.
Section 2.03. The Closing Date shall be August 31, 2006 or such later date as 
the Bank shall establish. The Bank shall promptly notify the Recipient of such later 
date.
ARTICLE III
Execution of the Project
Section 3.01. (a) The Recipient declares its commitment to the objectives of the 
Project as set forth in Schedule 2 to this Agreement and, to this end, shall carry out 
Parts A, B, C, D and F of the Project with due diligence and efficiency and in 
conformity with appropriate administrative, financial, energy, and environmental 
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 Recipient and the Bank shall otherwise agree, the Recipient shall 
carry out the said Parts of the Project in accordance with the Implementation Program 
set forth in Schedule 4 to this Agreement.
(c)
Without any limitation or restriction upon any of its other obligations 
under the GEF Trust Fund Grant Agreement, the Recipient shall: (a) cause PSF to 
perform in accordance with the provisions of the GEF Project Agreement all the 
obligations of PSF therein set forth; (b) take and cause to be taken all action, 
including the provision of funds, facilities, services and other resources, necessary 
or appropriate to enable PSF to perform such obligations; and (c) not take or permit 
to be taken any action which would prevent or interfere with such performance.
(d)
The Recipient shall make the proceeds of the GEF Trust Fund Grant 
allocated from time to time to Category 1 (b), (2), (3) (b) and (4) of the table in 
paragraph 1 of Schedule 1 to this Agreement available to PSF under a subsidiary 
financing agreement to be entered into between the Recipient and PSF under terms and 
conditions which shall have been approved by the Bank.
Section 3.02. Except as the Bank 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 GEF Trust Fund Grant shall be governed by the provisions of 
Page  6
Schedule 3 to this Agreement.
Section 3.03. (a)
The Recipient shall: (i) open and thereafter maintain, until 
completion of the Project, a Project Account in a commercial bank in the name of  PSF 
(the Project Account). 
(b)
The Project Account shall be used exclusively to defray the costs of Part 
G. 1 of the Project not financed from proceeds of the GEF Trust Fund Grant.
(c)
The Recipient shall: (i) pay an initial deposit equivalent to $120,000 
into the Project Account, such deposits representing the first six months of the 
Recipient's contribution to the costs of Part G.1 of the Project; (ii) as from 2002, 
deposit into the Project Account for each calendar year, no later than April 1 and 
August 1 of the calendar year, the amount of the Recipient’s annual contribution to 
Project costs of Part G.1 of the Project for such calendar year, as determined by 
agreement between the Recipient and the Bank; and (iii) ensure that all amounts 
deposited into the Project Account in accordance with the provisions of this Section 
shall be used exclusively to finance the Recipient’s contribution to the expenditures 
under Part G.1 the Project not otherwise financed out of the proceeds of the GEF Trust 
Fund Grant.
Section 3.04. The Recipient shall take, and cause PSF to take, all measures 
necessary to ensure that all environmental and social management aspects of the 
Project are carried out in conformity with the ESMF.
Section 3.05. For the purposes of Section 9.08 of the General Conditions and 
without limitation thereto, the Recipient shall:
(a)
prepare, on the basis of guidelines acceptable to the Bank, and furnish 
to the Bank 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 Bank, a plan for the 
future operation of Parts A, B, C, D and F of the Project; and 
(b)
afford the Bank a reasonable opportunity to exchange views with the 
Recipient on said plan.
ARTICLE IV
Financial Covenants
Section 4.01. (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, including those for the Special Accounts, for each fiscal 
year audited, in accordance with appropriate auditing principles 
consistently applied, by independent auditors acceptable to the 
Bank;
(ii)
furnish to the Bank as soon as available, but in any case not 
later than six (6) 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 Bank shall have reasonably requested; and
(iii)
furnish to the Bank such other information concerning said records 
and accounts and the audit thereof as the Bank shall from time to 
time reasonably request.
(c)
For all expenditures with respect to which withdrawals from the GEF Trust 
Fund Grant Account were made on the basis of statements of expenditure, the Recipient 
shall:
(i)
maintain or cause to be maintained, in accordance with paragraph 
(a) of this Section, records and accounts reflecting such 
Page  7
expenditures;
(ii)
retain, until at least one year after the Bank has received the 
audit report for the fiscal year in which the last withdrawal from 
the GEF Trust Fund Grant Account was made, all records (contracts, 
orders, invoices, bills, receipts and other documents) evidencing 
such expenditures;
(iii)
enable the Bank’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 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 carry out a time-bound action plan acceptable to the 
Bank for the strengthening of its financial management system for the Project in order 
to enable the Recipient, not later than eighteen (18) months after the Effective Date, 
or such later date as the Bank shall agree, to prepare quarterly Project Management 
Reports, acceptable to the Bank, 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 GEF Trust Fund Grant during the period covered 
by said report and expenditures proposed to be financed out of the 
proceeds of the GEF Trust Fund Grant 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 
implementation targets; and
(iii)
sets forth the status of procurement under the Project and 
expenditures under contracts financed out of the proceeds of the 
GEF Trust Fund 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 Bank, and furnish to the Bank not later than 45 days after the end of each 
calendar quarter a Project Management Report for such period.
ARTICLE V
Remedies of the Bank
Section 5.01. Pursuant to Section 6.02 (k) of the General Conditions, the 
following additional event is specified, namely, that a situation has arisen which 
shall make it improbable that the Program or a significant part thereof will be 
carried out.
ARTICLE VI
Effective Date; Termination
Section 6.01. The following event is specified as an additional condition to the 
effectiveness of the GEF Trust Fund Grant Agreement within the meaning of Section 
12.01 (b) of the General Conditions namely that all conditions precedent to the 
effectiveness of the Development Credit Agreement, other than those related to the 
effectiveness of this Agreement, have been fulfilled.
Page  8
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.
Section 6.03. This Agreement shall continue in effect until the GEF Trust Fund 
Grant has been fully disbursed and the parties to this Agreement have fulfilled all 
their obligations hereunder.
ARTICLE VII
Representative of the Recipient; Addresses
Section 7.01. The Recipient’s Minister responsible for Finance is designated as 
representative of the Recipient for the purposes of Section 11.03 of the General 
Conditions.
Section 7.02. The following addresses are specified for the purposes of Section 
11.01 of the General Conditions:
For the Recipient:
Ministry of Finance, Planning and
   Economic Development
P.O. Box 8147
Kampala, Uganda
Cable address:
Facsimile:
    FINSEC
230163
For the Bank:
International Bank for 
   Reconstruction and Development, 
acting as an Implementing Agency of 
   the Global Environment Facility
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 BANK FOR
RECONSTRUCTION AND DEVELOPMENT
as an implementing agency of the Global Environment Facility
By /s/ Callisto Madavo
Regional Vice President
Page  9
Africa
SCHEDULE 1
Withdrawal of the Proceeds of the GEF Trust Fund Grant
A.
General
1.
The table below sets forth the Categories of items to be financed out of the 
proceeds of the GEF Trust Fund Grant, the allocation of the amounts of the GEF Trust 
Fund Grant to each Category and the percentage of expenditures for items so to be 
financed in each Category:
Amount of the
   GEF Trust Fund Grant
   % of
   Allocated (Expressed
Expenditures
Category
     in SDR Equivalent)
to be Financed
(1)
Goods
100% of foreign
expenditures and
90% of local
expenditures
(a) Health and
   110,000
Education energy
pacjages
(b) PSF
    40,000
(2)
Grants
 4,910,000
100% of amounts 
disbursed
(3)
Consultants' servcices
100% of foreign
expenditures and
90% of local
expenditures
(a) Participating
 2,600,000
Ministries
(b) PSF
   700,000
(4)
Operating Costs
   160,000
100% of foreign
(PSF)
expenditures and
90% of local
expenditures
(5)
Unallocted
   980,000
TOTAL
 9,500,000
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 Recipient for goods or services supplied from the 
territory of any country other than that of the Recipient; 
(b)
the term "local expenditures" means expenditures in the currency of the 
Recipient or for goods or services supplied from the territory of the Recipient; 
(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 and accommodation, auxiliary Project staff 
salaries for REA but excluding salaries of the Recipient’s civil servants; and
(d)
the term "Participating Ministries" means the Recipient’s Ministries 
responsible for energy, local government, health, agriculture, education, water and 
Page  10
finance.
3.
Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be 
made in respect of:
(a)
a Grant under Category (2) unless the Grant has been made in accordance 
with the eligibility criteria and procedures and on the terms and conditions set forth 
or referred to in the Project Implementation Plan and the provisions of Schedule 4 to 
this Agreement; and
(b)
payments made for expenditures prior to the date of this Agreement.
4.
The Bank may require withdrawals from the Trust Fund Grant Account to be made on 
the basis of statements of expenditure for: (a) goods under contracts not exceeding 
$100,000 equivalent each; (b) consultants’ services under contracts not exceeding: (i) 
$100,000 equivalent each for consulting firms, and (ii) $50,000 equivalent each for 
individual consultants; and (c) Operating Costs and training, all under such terms and 
conditions as the Bank shall specify by notice to the Recipient.
B.
Special Accounts
1.
The Recipient shall, for the purposes of the Project, open and maintain in 
dollars, in a commercial bank on terms and conditions satisfactory to the Bank, 
including appropriate protection against set off, seizure or attachment, two special 
deposit accounts for MEMD/REA and PSF.
2.
After the Bank has received evidence satisfactory to it that a Special Account 
has been opened, withdrawals from the Trust Fund Grant Account of amounts to be 
deposited into the said GEF Special Account shall be made as follows:
(a)
until the Bank shall have received: (i) the first Project Management 
Report referred to in Section 4.02 (b) of this Agreement; and (ii) a request from the 
Recipient for withdrawal on the basis of Project Management Reports, withdrawals shall 
be made in accordance with the provisions of Annex A to this Schedule 1; and
(b)
upon receipt by the Bank of a Project Management Report pursuant to 
Section 4.02 (b) of this Agreement, accompanied by a request from the Recipient for 
withdrawal on the basis of Project Management Reports, all further withdrawals shall 
be made in accordance with the provisions of Annex B to this Schedule 1.
3.
Payments out of each special Account shall be made exclusively for Eligible 
Expenditures. For each payment made by the Recipient out of a Special Account, the 
Recipient shall, at such time as the Bank shall reasonably request, furnish to the 
Bank such documents and other evidence showing that such payment was made exclusively 
for Eligible Expenditures.
4.
Notwithstanding the provisions of Part B.2 of this Schedule, the Bank shall not 
be required to make further deposits into any Special Account:
(a)
if the Bank 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 Bank determines at any time that all further withdrawals should be 
made by the Recipient directly from the GEF Trust Fund Grant Account; or
(c)
if the Recipient shall have failed to furnish to the Bank 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 Bank pursuant to said Section in respect of 
the audit of:   (i) the records and accounts for any Special Account, or (ii) the 
records and accounts reflecting expenditures with respect to which withdrawals were 
made on the basis of Project Management Reports.
5.
The Bank shall not be required to make further deposits into any Special Account 
in accordance with the provisions of Part B.2 of this Schedule if, at any time, the 
Bank 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 GEF Trust Fund Grant Account 
pursuant to Section 6.02 of the General Conditions. Upon such notification, the Bank 
shall determine, in its sole discretion, whether further deposits into the Special 
Accounts may be made and what procedures should be followed for making such deposits, 
and shall notify the Recipient of its determination.
Page  11
6.
(a)
If the Bank determines at any time that any payment out of any Special 
Account was made for an expenditure which is not an Eligible Expenditure, or was not 
justified by the evidence furnished to the Bank, the Recipient shall, promptly upon 
notice from the Bank, provide such additional evidence as the Bank may request, or 
deposit into the said Special Account (or, if the Bank shall so request, refund to the 
Bank) an amount equal to the amount of such payment. Unless the Bank shall otherwise 
agree, no further deposit by the Bank into any 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 Bank determines at any time that any amount outstanding in any 
Special Account will not be required to cover payments for Eligible Expenditures 
during the six-month period following such determination, the Recipient shall, 
promptly upon notice from the Bank, refund to the Bank such outstanding amount.
(c)
The Recipient may, upon notice to the Bank, refund to the Bank all or any 
portion of the funds on deposit in a Special Account.
(d)
Refunds to the Bank made pursuant to sub-paragraph (a), (b) or (c) of 
this paragraph 6 shall be credited to the GEF Trust Fund Grant Account for subsequent 
withdrawal or for cancellation in accordance with the provisions of the GEF Trust Fund 
Grant Agreement.
Annex A to SCHEDULE 1
Operation of GEF Special Account
When Withdrawals Are Not Made
On the Basis of Project Management Reports
1.
For the purposes of this Annex, the term "Authorized Allocation" means: (a) in 
respect of the MEMD/REA Special Account an amount equivalent to $250,000 to be 
withdrawn from the GEF Trust Fund Grant Account and deposited into the MEMD/REA 
Special Account pursuant to paragraph 3 (a) of this Schedule; and (b) in respect of 
the PSF Special Account an amount equivalent to $1,000,000 to be withdrawn from the 
GEF Trust Fund Grant Account and deposited into the PSF Special Account pursuant to 
paragraph 3 (a) of this Schedule, provided, however, that, unless the Bank shall 
otherwise agree, said Authorized Allocation shall be limited to an amount equivalent 
to $500,000, until the aggregate amount of withdrawals from the GEF Grant Account of 
amounts allocated to the PSF Special Account’s Eligible Categories, plus the total 
amount of all outstanding special commitments entered into by the Bank pursuant to 
Section 5.02 of the General Conditions in respect of amounts allocated to said 
Categories, shall equal or exceed the equivalent of SDR 3,000,000;
2.
Withdrawals of a Special Account’s Authorized Allocation and subsequent 
withdrawals to replenish said Special Account shall be made as follows:
(a)
For withdrawals of the Authorized Allocation, the Recipient shall furnish 
to the Bank a request or requests for deposit into the said Special Account of an 
amount or amounts which in the aggregate do not exceed the Authorized Allocation. On 
the basis of each such request, the Bank shall, on behalf of the Recipient, withdraw 
from the GEF Trust Fund Grant Account and deposit into said Special Account such 
amount as the Recipient shall have requested.
(b)
For replenishment of the said Special Account, the Recipient shall 
furnish to the Bank requests for deposit into the said Special Account at such 
intervals as the Bank shall specify. Prior to or at the time of each such request, the 
Recipient shall furnish to the Bank 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 Bank shall, 
on behalf of the Recipient, withdraw from the GEF Trust Fund Grant Account and deposit 
into the said 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 said Special Account for Eligible Expenditures. Each such deposit into the said 
Special Account shall be withdrawn by the Bank from the GEF Trust Fund Grant Account 
under one or more of the Eligible Categories.
3.
The Bank shall not be required to make further deposits into a Special Account, 
once the total unwithdrawn amount of the GEF Trust Fund Grant allocated to the 
Eligible Categories minus the total amount of all outstanding special commitments 
entered into by the Bank pursuant to Section 5.02 of the General Conditions in respect 
Page  12
entered into by the Bank pursuant to Section 5.02 of the General Conditions in respect 
of expenditures to be financed out of the proceeds of the GEF Trust Fund Grant 
allocated to said Categories, shall equal the equivalent of twice the amount of the 
Authorized Allocation. Thereafter, withdrawal from the GEF Trust Fund Grant Account of 
the remaining unwithdrawn amount of the GEF Trust Fund Grant allocated to said 
Categories shall follow such procedures as the Bank shall specify by notice to the 
Recipient.  Such further withdrawals shall be made only after and to the extent that 
the Bank shall have been satisfied that all such amounts remaining on deposit in the 
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 GEF Special Account
When Withdrawals Are Made
On the Basis of Project Management Reports
1.
Except as the Bank may otherwise specify by notice to the Recipient, all 
withdrawals from the GEF Trust Fund Grant Account shall be deposited by the Bank into 
the respective Special Account in accordance with the provisions of Schedule 1 to this 
Agreement. Each such deposit into a Special Account shall be withdrawn by the Bank 
from the GEF Trust Fund Grant Account under one or more of the Eligible Categories.
2.
Each application for withdrawal from the GEF Trust Fund Grant Account for 
deposit into a Special Account shall be supported by a Project Management Report.
3.
Upon receipt of each application for withdrawal of an amount of the GEF Trust 
Fund Grant, the Bank shall, on behalf of the Recipient, withdraw from the GEF Trust 
Fund Grant Account and deposit into the respective Special Account an amount equal to 
the lesser of: (a) the amount so requested; and (b) the amount which the Bank has 
determined, based on the Project Management Report accompanying said application, is 
required to be deposited in order to finance Eligible Expenditures during the 
six-month period following the date of such report, provided, however, that the amount 
so deposited, when added to the amount indicated by said Project Management Report to 
be remaining in the said Special Account, shall not exceed the equivalent of 
$2,000,000.
SCHEDULE 2
Description of the Project
The objectives of the Project are to assist the Recipient in: (a) putting in 
place a conducive environment and related capacity for: (i) commercially oriented 
service delivery of energy and information, communication technologies, and (ii) 
small-scale renewable power generation schemes to be carried out by eligible 
enterprises; (b) facilitating investment in: (i) commercially oriented rural 
electrification schemes, and (ii) the scaled-up delivery of electricity in rural 
communities; and (c) the acceleration of: (i) rural access to basic telephone service, 
and (ii) the spread of Internet to district capitals and vanguard rural institutions.
The Project consists of the following Parts, subject to such modifications 
thereof as the Recipient and the Association may agree upon from time to time to 
achieve such objectives:
Part A:
Main Grid Related Power Distribution and Generation
The carrying out by eligible enterprises, utilizing Subloans and Grants, of 
rural electrification investment schemes, including: (a) Subprojects for the supply of 
power to rural areas through the construction of extensions from the main grid; and 
(b) subprojects for the generation of power from small, renewable energy sources 
close, or connected, to the main grid.
Part B:
Independent Grid Systems
The carrying out by eligible enterprises, utilizing Subloans and Grants, of schemes 
for the generation and supply of power through independent grid systems including the 
use of renewable energy sources in remote settlements.
Part C:
Household and Commercial Solar Photo-Voltaic System
The installation by eligible enterprises of solar photo-voltaic systems for use 
Page  13
The installation by eligible enterprises of solar photo-voltaic systems for use 
by rural enterprises and in homes, including the making of Subloans and Grants to the 
eligible enterprises.
Part D: Cross-Sectoral Links
1.
(a)
Installation and maintenance by eligible enterprises, under contract 
arrangements with the Recipient’s Ministry of Health, of appropriate energy packages 
designed to address energy needs in rural health facilities (including in staff 
houses) in ten Districts of the Recipient.
(b)
The provision of technical advisory services to assist with: (i) the 
carrying out of Subprojects, (ii) workshops, information dissemination and capacity 
building, and (iii) monitoring and evaluation of the impact of this Part D.1 of the 
Project on the delivery of rural health services.
2.
The provisions of technical advisory services to the Recipient’s Ministry of 
Agriculture, (full name needed here), for: (a) identifying high-value added rural 
agricultural and agro-processing activities, including activities such as fishing and 
dairying, where the provision of electricity and ICT services would have significant 
economic benefits, and where there would be justification for providing subsidies to 
facilitate access to electricity and ICT services; (b) linking demand of consumers to 
potential suppliers; (c) monitoring and evaluation of the impact of this Part D.2 of 
the Project in meeting the objectives of the Recipient’s Plan for Modernization of 
Agriculture; and (d) capacity building to undertake the above activities.
3.
(a)
The provision by eligible enterprises, under contractual arrangements 
with the Recipient’s Ministry of Education and Sports, of energy and ICT services and 
facilities for post-primary education facilities (including in staff houses) located 
in about ten selected Districts of the Recipient.
(b)
The provision of technical advisory services for: (a) the assessment of 
energy needs in the post-primary education facilities; (b) the development of 
appropriate energy packages for post-primary education; (c) the conduct of workshops; 
(d) the preparation of information packages for the Districts; and (e) capacity 
building, monitoring and evaluation of the impact of this Part D.3 of the Project on 
the delivery and impact of post primary education.
4.
The provision of technical advisory services to assist in the preparation of 
least cost energy solutions for water schemes in ten Districts of the Recipient, 
namely, Kotido, Moroto, Arua, Nebbi, Moyo, Adjumani, Yumbe, Kabarole, Kyenjojo and 
Budibugyo, including technical advisory services for: (a) the preparation of energy 
guidelines for the different types of water supply options; (b) the development of 
information packages on water energy packages to be presented at workshops and made 
available to water groups and communities; and (c) the installation of a scheme for 
the monitoring and evaluation of the impact of this Part D.4 of the Project on the 
delivery of rural water services.
Part E:
ICT Infrastructure in the Rural Areas
1.
The competitive tendering by UCC of grants for the installation, operation and 
maintenance by eligible enterprises of ICT infrastructure in commercially non-viable 
rural areas in the Recipient’s territory, including: (a) the provision of at least one 
public telephone per sub-county in all sub-counties declared to be uncovered by 
national operators in July 2001; (b) the provision of internet points of presence 
together with a public internet access facility in at least 30 District Capitals; and 
(c) the provision of a multipurpose community telecenter located at a ‘vanguard’ 
institution outside of the District Headquarters in at least seven Districts.
2.
The provision of technical advisory services to support the tendering of the 
sub-projects referred to in Part E.1, including: (a) the development of detailed 
technical, financial and regulatory specifications for rural service licenses; (b) the 
provision of technical advisory services of an internationally recruited advisor or 
rural ICT; (c) the provision of independent third party verification services to 
certify whether or not the investment requirements of the rural licenses have been 
carried out by the licensed eligible enterprises; (d) the provision of technical 
advisory services for monitoring and evaluating the quality of service provided by the 
rural operators; and (e) the provision of training for, and building the capacity and 
know-how of, staff of UCC in the design and tendency of rural ICT subprojects.
Part F:
Energy Sector Capacity Building, Technical Assistance and Training
1.
The training of staff of the Rural Electrification Agency (REA); the preparation 
Page  14
1.
The training of staff of the Rural Electrification Agency (REA); the preparation 
of an indicative rural electrification master plan; the processing of subsidies for 
rural electrification; the development of in-country expertise for rural 
electrification; and the monitoring and evaluation of the progress of rural 
electrification.
2.
(a)
The carrying out through MEMD/REA, utilizing technical advisory services, 
of: (i) pilot schemes for efficient and clean biomass usage by households and small 
firms; (ii) pilot activities for biomass gasification; and (iii) renewable energy, 
capacity assessment, capacity building resource informational systems.
(b)
The provision through MEMD/REA of grants to eligible enterprises for the 
carrying out of the said pilot schemes and activities under section 2 (a) (ii).
3.
The monitoring and evaluation by the Recipient’s Ministry of Finance, Planning 
and Economic Development of the impact of the Project on poverty reduction.
4.
The provision by the Recipient’s Ministry of Local Government of technical 
advisory services for Ministry’s role in supporting the dissemination and promotion of 
rural electrification policies.
Part G:
Business Development Services and Credit Support Facility
1.
The provision through the Private Sector Foundation of support to eligible 
enterprises, financial institutions, technical institutions and other agencies and 
entities participating in the carrying out of the Project, including: (a) the 
provision of technical advisory services to the eligible enterprises, and said 
institutions, agencies and entities for the strengthening of: (i) their business 
development capacities, and (ii) rural enterprise development services required for 
the Project; and (b) the making of grants to eligible enterprises for the preparation 
out of Subprojects.
2.
(a)
The making through BOU under Participating Agreements with PFIs of 
Subloans to eligible enterprises for the carrying out of rural electrification 
activities and schemes.
(b)
The provision of a Credit support facility to support and facilitate the 
making by PFIs of Subloans to eligible enterprises carrying out Subprojects.
* * *
The Project is expected to be completed by February 28, 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 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.
(a) 
Except as otherwise provided in Part C of this Section, goods and works 
to be procured by the Recipient or any agency of the Recipient which is not in the 
private sector shall be procured under contracts awarded in accordance with the 
provisions of Section II of the Guidelines and paragraph 5 of Appendix 1 thereto.
(b)
Except as otherwise provided in Part C.4 of this Section, procurement by 
an eligible entity in the private sector shall be carried out under contracts awarded 
in accordance with the provisions of Section II of the Guidelines and paragraph 5 of 
Page  15
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)
Prequalification
Bidders for works shall be prequalified in accordance with the provisions of 
paragraphs 2.9 and 2.10 of the Guidelines.
(b)
Grouping of contracts
To the extent practicable, and without prejudice to the provisions of Part C.4 
contracts for goods shall be grouped in bid packages estimated to cost $100,000 
equivalent or more each.
(c)
Preference for domestically manufactured goods and domestic contractors
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 Recipient and works 
to be carried out by domestic contractors.
(d)
Notification and Advertising
The invitation to prequalify or bid for each contract estimated to cost $100,000 
equivalent or more shall be advertised in accordance with the procedures applicable to 
large contracts under paragraph 2.8 of the Guidelines.
3.
In the case of competitively tendered grants including: (a) those to be 
administered by UCC for ICT services, and (b) those to be administered by the REA for 
electricity services.  The procedures described in Section 3, Paragraph 3.13 (a) of 
the Guidelines shall apply.
Part C:
Other Procurement Procedures 
1.
Limited International Bidding
Goods and works which the  Bank agrees can only be purchased from a limited 
number of suppliers, regardless of the cost thereof, may be procured under contracts 
awarded in accordance with the provisions of paragraph 3.2 of the Guidelines.
2.
National Competitive Bidding
Goods estimated to cost less than $100,000 equivalent per contract, up to an 
aggregate amount not to exceed $500,000 equivalent, may be procured under contracts 
awarded in accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines.
3.
International or National Shopping
Goods estimated to cost less than $30,000 equivalent per contract, up to an 
aggregate amount not to exceed $600,000 equivalent, may be procured in accordance with 
the provisions of paragraphs 3.5 and 3.6 of the Guidelines under contracts awarded on 
the basis of: (a) national shopping procedures, if available locally; or (b) 
international shopping procedures, if not available locally.
4.
Procurement from UN Agencies
Goods estimated to cost less than $50,000 equivalent per contract, up to an 
aggregate amount not to exceed $200,000 equivalent may be procured from IAPSO in 
accordance with the provisions of paragraph 3.9 of the Guidelines.
5.
Commercial Practices
Goods and works required for the carrying out of Subprojects by eligible 
enterprises may be procured in accordance with established commercial practices 
satisfactory to the Association with respect to: (a) goods estimated to cost less than 
$2,000,000 equivalent; (b) works estimated to cost less than $3,000,000 equivalent; 
and (c) turnkey supply and installation contracts estimated to cost less than 
$5,000,000 equivalent.
Part D:
Review by the Association of Procurement Decisions
Page  16
1.
Procurement Planning
Prior to the issuance of any invitations to prequalify for bidding or 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
(a)
With respect to each contract for goods estimated to cost the equivalent 
of $100,000 or more procured by the Recipient or an agency of the Recipient operating 
in the public sector, the procedures set forth in paragraphs 2 and 3 of Appendix 1 to 
the Guidelines shall apply.
(b)
With respect to each contract to be executed by an eligible enterprise in 
the private sector for: (i) the supply and installation of equipment and plant 
estimated to cost the equivalent of $5,000,000 or more; (ii) works estimated to cost 
$3,000,000 equivalent or more; and (iii) goods estimated to cost $2,000,000 equivalent 
or more, the procedures set forth in paragraphs 2 and 3 of Appendix 1 to the 
Guidelines shall apply.
3.
Post Review
With respect to each contract not governed by paragraph 2 of this Part, the 
procedures set forth in paragraph 4 of Appendix 1 to the Guidelines shall apply.
Section II.
Employment of Consultants
Part A:
General
1.
Consultants’ services shall be procured in accordance with (a) the provisions of 
the Introduction and Section IV of the "Guidelines: Selection and Employment of 
Consultants by World Bank Recipients" 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 short list of consultants for services estimated to cost less than $100,000 
equivalent per contract, may comprise entirely national consultants in accordance with 
the provisions of paragraph 2.7 of the Consultant Guidelines.
Part C:
Other Procedures for the Selection of Consultants
1.
Least-cost Selection
Services of a routine nature and services involving established practices and 
standards (including financial audit services) estimated to cost less than $100,000 
equivalent per contract up to an aggregate amount not to exceed $200,000 equivalent 
may be procured under contracts awarded in accordance with the provisions of 
paragraphs 3.1 and 3.6 of the Consultant Guidelines.
2.
Selection Based on Consultants’ Qualifications
Services of consulting firms estimated to cost less than $100,000 equivalent per 
contract up to an aggregate amount not to exceed $1,100,000 equivalent may be procured 
under contracts awarded in accordance with the provisions of paragraphs 3.1 and 3.7 of 
Page  17
under contracts awarded in accordance with the provisions of paragraphs 3.1 and 3.7 of 
the Consultant Guidelines.
3.
Individual Consultants
Services for tasks that meet the requirements set forth in paragraph 5.1 of the 
Consultant Guidelines shall be procured under contracts awarded to individual 
consultants in accordance with the provisions of paragraphs 5.1 through 5.3 of the 
Consultant Guidelines.
4.
Single Source Selection
In exceptional cases services 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.
5.
Commercial Practices
Services to assist in the carrying out of Subprojects estimated to cost less 
than $100,000 equivalent may be procured in accordance with commercial practices 
acceptable to the Association.
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 
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 by the Recipient of 
consulting firms estimated to cost the equivalent of $100,000 or more, the procedures 
set forth in paragraphs 1, 2 (other than the third subparagraph of paragraph 2 (a)) 
and 5 of Appendix 1 to the Consultant Guidelines shall apply.
(b)
With respect to each contract for the employment of individual 
consultants estimated to cost the equivalent of $50,000 or more, the qualifications, 
experience, terms of reference and terms of employment of the consultants shall be 
furnished to the Association for its prior review and approval. The contract shall be 
awarded only after the said approval shall have been given.
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.
SCHEDUE 4
Implementation Program
Part A:
Project Implementation
1.
(a)
The Recipient shall prepare and furnish to the Bank a Project 
Implementation Plan in a form and substance satisfactory to the Bank. The said Plan 
shall be subject to modification by agreement between the Recipient and the Bank.
(b)
The Project Implementation Plan shall set out details of all procedures, 
guidelines, timetables and criteria required for the Project (including details of the 
eligibility criteria to be followed by eligible enterprises applying for Grants, the 
related procurement procedures and plans and an assessment of local counterpart 
funding requirements).
(c)
The Recipient shall carry out the Project in accordance with the Project 
Implementation Plan and, except as the Recipient and the Bank shall otherwise agree, 
the Recipient shall not amend or waive any provision of the Project Implementation 
Plan, if in the opinion of the Bank, such amendment or waiver may materially and 
Page  18
Plan, if in the opinion of the Bank, such amendment or waiver may materially and 
adversely affect the carrying out of the Project or the achievement of the objectives 
thereof.
2.
The Recipient shall prepare and furnish to the Bank a Financial Management and 
Procurement Plan in form and substance satisfactory to the Bank.
Part B:
Grants and Subloans
3.
(a)
The Recipient shall ensure that, except as the Bank shall otherwise 
agree, Subprojects shall be promoted, identified, appraised, approved, carried out and 
monitored in accordance with the procedures and other provisions set forth or referred 
to in the Project Implementation Plan and ESMF.
(b)
Enterprises applying for any Grants or Subloans provided under the 
Project shall meet relevant criteria set out in the Project Implementation Plan and 
ESMF with respect to the making of Grants and Subloans.
4.
The Recipient shall enter into agreements satisfactory to the Bank as a 
condition for the making of Grants  and Subloans. The terms and conditions of each 
Grant Agreement shall inter alia:
(a)
require that the eligible enterprise: (i) carries out the Subproject with 
due diligence and efficiency and in accordance with sound technical, financial, 
environmental and managerial standards; and (ii) maintains adequate records to 
reflect, in accordance with sound accounting practices, the operations, resources and 
expenditures relating to the Subproject;
(b)
require that the goods, works and services to be financed from the 
proceeds of the Grant shall: (i) be procured in accordance with procedures ensuring 
efficiency and economy and in accordance with the provisions of Schedule 3 to this 
Agreement; and (ii) be used exclusively in the carrying out of the Subproject or 
Subprojects; and
(c)
reserve for the Recipient the right to:
(i)
inspect by itself, or jointly with the Bank, if the Bank shall so 
request, the goods, works, sites, plants and construction included 
in the Subproject or Subprojects, the operations thereof and any 
relevant records and documents;
(ii)
obtain all information as the Recipient or the Bank shall 
reasonably request regarding the administration, operation and 
financial conditions of the eligible enterprise; and
(iii)
suspend or terminate the right of the eligible enterprise to use 
the proceeds of the Grant upon the failure by the eligible 
enterprise to perform any of its obligations under the Grant 
Agreement.
5.
The Recipient shall no later than ninety (90) days after the Effective Date 
establish a unit, or make other appropriate arrangements, satisfactory to the Bank 
which shall be responsible for ensuring that the proceeds of Grants or the Subloans 
are used exclusively for purposes of the Project.
Part C:
Monitoring, Evaluation, Reporting and Annual Work Programs
6.
The Recipient 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 Bank, and furnish 
to the  Bank, on or about March 31, June 30, September 30 and December 31, a quarterly 
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 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;
(c)
carry out, jointly with the Bank, not later than June 30, 2004, a midterm 
Page  19
(c)
carry out, jointly with the Bank, not later than June 30, 2004, a midterm 
review, of the Project, which shall cover salient aspects of the Project, including: 
(i) progress made in meeting the Project’s objectives; (ii) overall Project 
performance as measured against the said Performance Indicators; (iii) the quality of 
the advisory services provided for the Project; and (iv) a study, to be financed by 
the Bank, to assess the workings of the REF, RE Board, and REA and recommend required 
changes, including the possible need for a revised legal basis for the RE Board and 
REA, to enhance the effectiveness of their operations;
(d)
not later than four weeks prior to the review referred to in (c) above, 
furnish to the Bank a report, in such detail as the Bank shall reasonably request, 
including an evaluation of the progress achieved in Project implementation; and 
(e)
not later than sixty (60) days after the Midterm Review: (i) prepare an 
action plan, acceptable to the Bank, for further implementation of the Project having 
regard to the findings of the Midterm Review and, thereafter, carry out such action 
program; and (ii) prepare a performance indicator suitable with the Bank related to 
the legal basis of the RE Board and REA.
7.
The Recipient shall take all measures necessary to adopt and implement 
principles and procedures, satisfactory to the Bank, with respect to operations of the 
RE Board, REF, and REA by June 1, 2002, and shall refrain from introducing substantial 
changes thereto without prior consultation with the  Bank.
SCHEDULE 5
Performance Indicators
The performance indicators for the Project shall include the following, said 
indicators being subject to modifications by agreement between the Recipient and the 
Bank:
1.
Establishment of a regulatory system for rural electrification and satisfactory 
working of RE Board, REA and REF. 
2.
Establishment of a workable financial intermediation mechanism for rural 
electrification.
3.
Satisfactory functioning of two independent grid rural electrification 
operations;
4
Satisfactory functioning of eighty percent (80%) percent of the energy systems 
provided to agriculture-linked users, health clinics, schools, and water facilities.
5.
15 MW of renewable energy power generation facilities constructed or 
under-construction.
6.
320,000 cumulative Watt-peak sales of solar pv systems to households and 
institutions. 
7.
Solar home system price reduction of thirty percent (30%) from June 2000 
baseline has been achieved (i.e., end-Phase I price of about $14/Wp compared to about 
$20/Wp in June 2000).
8.
Finalization and implementation of first phase of long-term renewable energy 
capacity building strategy and action plan, including financing of recurrent costs of 
renewable energy projects and institutional arrangements.
9.
Phase I coverage objectives for rural telephony, internet points of presence and 
rural telecenters has been satisfactorily achieved.
10.
Collection of at least eighty percent (80%) of the telecommunications universal 
service levy revenues that are billable by the end of Phase I has been achieved.