Page  1
CONFORMED COPY
CREDIT NUMBER 3596 BEN
Development Credit Agreement
(Multisectoral HIV/AIDS Project)
between
REPUBLIC OF BENIN
and
INTERNATIONAL DEVELOPMENT ASSOCIATION
Dated January 17, 2002
CREDIT NUMBER 3596 BEN
Page  2
DEVELOPMENT CREDIT AGREEMENT
AGREEMENT, dated January 17, 2002, between REPUBLIC OF BENIN (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 HIV/AIDS Strategy paper dated December 2000, describing the 
Borrower’s program of actions, objectives and policies designed to prevent and control the 
HIV/AIDS epidemic (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 
378,400,000 over a period of three years; 
(D)
the 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;
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 
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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)
“Action Plan” means the set of activities of any PSO (as hereinafter defined), 
which is eligible for financing under Part B.1 of the Project;
(b)
“Action Plan Agreement” means the agreement to be entered into among CNLS 
(as hereinafter defined), PMU (as hereinafter defined) and a PSO for the purpose of carrying out 
and financing an Action Plan;
(c)
“Administrative, Accounting and Financial Manual” means the manual outlining 
the administrative, financial, accounting and reporting procedures for the implementation of the 
Project referred to in paragraph A.1 of Schedule 4 to this Agreement and adopted pursuant to 
Section 7.01 (c) of this Agreement, as the same may be amended from time to time, and such 
term includes any schedules to the Administrative, Accounting and Financial Manual;
(d)
“AIDS” means the Acquired Immuno-Deficiency Syndrome;
(e)
“AT” means Association
des
Tradithérapeuthes
, the  Association of Traditional 
Practitioners located in the territory of the Borrower, a non-profit association
 established and 
operating under the laws of the Borrower and referred to in Part B.2 of Schedule 2 to this 
Agreement;
(f)
“CALS” means Comités
d
’Arrondissement
de
Lutte
Contre
le
SIDA
, the 
decentralized arrondissement level HIV/AIDS committees established and operating pursuant to 
the New CNLS Decree (as hereinafter defined);
(g)
“CBO” means a community-based organization established and operating under 
the laws of the Borrower, which has met the eligibility criteria set out in the Project 
Implementation Manual (as hereinafter defined) and the requirements of Schedule 4 to this 
Agreement and, 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);
(h)
“CBO Grant Agreement” means the agreement to be entered into among the 
relevant CDLS (as hereinafter defined), the Financial Management Firm (as hereinafter defined) 
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(h)
“CBO Grant Agreement” means the agreement to be entered into among the 
relevant CDLS (as hereinafter defined), the Financial Management Firm (as hereinafter defined) 
and a CBO for the purpose of making a Grant to such CBO for carrying out a Subproject;
(i)
“CCLS” means Comités
Communaux
de
Lutte
Contre
le
SIDA
, the decentralized 
district level HIV/AIDS committees established and operating pursuant to the New CNLS 
Decree;
(j)
“CDLS” means the Comités
Départementaux
de
Lutte
Contre
le
SIDA
, the 
decentralized departmental level HIV/AIDS committees established and operating pursuant to the 
New CNLS Decree;
(k)
“CFA Francs” or “CFAF” means the currency of the Borrower;
(l)
“CNLS” means Comité
National
de
Lutte
Contre
le
SIDA
, the  national 
HIV/AIDS committee established and operating pursuant to the CNLS Decree;
(m)
“CNLS Decree” means the Borrower’s Decree No. 2001-231 dated July 12, 2001 
portant
création
, composition
, attributions
, organisation
et
fonctionnement
du
Comité
National
de
Lutte
Contre
le
SIDA
;
(n)
“CSO” means a civil society organization established and operating under the 
laws of the Borrower, including NGOs and any other private sector entity engaged in HIV/AIDS 
activities, which has met the eligibility criteria set out in the Project Implementation Manual and 
the requirements of Schedule 4 to this Agreement and, as a result, has received or is entitled to 
receive a Grant for the carrying out of a Subproject;
(o)
“CSO Grant Agreement” means the agreement to be entered into among a 
CDLS, the Financial Management Firm and a CSO, or among CNLS, PMU and a CSO, as the 
case may be, for the purpose of making a Grant to such CSO for carrying out a Subproject;
(p)
“CVLS” means the Comités
Villageois
de
Lutte
Contre
le
SIDA
, the 
decentralized village level HIV/AIDS committees established and operating pursuant to the New 
CNLS Decree;                   
(q)
“CWMP” means the clinical waste management plan for the Project referred to 
in paragraph A.1 of Schedule 4 to this Agreement and adopted pursuant to Section 7.01 (i) of this 
Agreement, as the same may be amended from time to time, and such term includes any 
schedules to the CWMP;
(r)
“Decentralized Committees of CNLS” means the CALS, CCLS, CDLS and 
CVLS;
(s)
“Eligible Categories” means: (i) Categories (2), (3), (4) and (5) set forth in the 
table in Part A.1 of Schedule 1 to this Agreement in respect of Special Account A (as hereinafter 
defined); and (ii) Categories (1), (2), (3) and (5) set forth in the table in Part A.1 of Schedule 1 to 
this Agreement in respect of Special Account B (as hereinafter defined);
(t)
“Eligible Expenditures” means, in respect of Special Account A, the 
expenditures for goods, works  and services referred to in Section 2.02 of this Agreement and to 
be financed out of the proceeds of the Credit allocated from time to time to said Special Account 
A’s Eligible Categories; and in respect of Special Account B, the expenditures for goods, works 
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be financed out of the proceeds of the Credit allocated from time to time to said Special Account 
A’s Eligible Categories; and in respect of Special Account B, the expenditures for goods, works 
and services referred to in Section 2.02 of this Agreement and to be financed out of the proceeds 
of the Credit allocated from time to time to said Special Account B’s respective Eligible 
Categories; 
(u)
“Financial Management Firm” means the firm employed pursuant to Section 
7.01 (g) of this Agreement, responsible for the accounting, financial reporting and disbursement 
for all the activities under Part A.2 of the Project, and for the activities under Part A.3 of the 
Project which meet the criteria set forth in paragraph C.1 of Schedule 4 to this Agreement;
(v)
“Grant” means a grant made, or proposed to be made, by a CDLS through the 
Financial Management Firm to a CBO or a CSO to finance a Subproject, or by CNLS through 
PMU to a CSO to finance a Subproject, as the case may be;
(w)
“HART” means the HIV Antiretroviral Therapy;
(x)
“HIV” means the Human Immuno-Deficiency Virus;
(y)
“MOPH” means the Borrower’s Ministry of Public Health;
(z)
“Monitoring and Evaluation Manual” means the manual outlining the monitoring 
and evaluation arrangements for the Project, referred to in paragraph A.1 of Schedule 4 to this 
Agreement and adopted pursuant to Section 7.01 (c) of this Agreement, as the same may be 
amended from time to time, and such term includes any schedules to the Monitoring and 
Evaluation Manual;
(aa)
“New CNLS Decree” means the Borrower’s Decree modifying and replacing the 
CNLS Decree, referred to in Section 6.01 (b) of this Agreement and issued pursuant to Section 
7.01 (a) of this Agreement;
(bb)
“NGO” means a non-governmental organization, established and operating under 
the laws of the Borrower;
(cc)
“PLWHA” means people living with HIV/AIDS;
(dd)
“Project Account” means the account referred to in Section 3.04 (a) of this 
Agreement;
(ee)
“Project Implementation Manual” means the manual setting out, inter alia, the 
criteria, procurement and disbursement procedures, the institutional aspects, and other 
arrangements for the implementation of the Project, including those applicable to the Subprojects 
and Action Plans, referred to in paragraph A.1 of Schedule 4 to this Agreement and adopted 
pursuant to Section 7.01 (c) of this Agreement, as the same may be amended from time to time, 
and such term includes any schedules to the Project Implementation Manual;
(ff)
“Project Management Report” means each report prepared in accordance with 
Section 4.02 of this Agreement;
(gg)
“Project Year” means the twelve-month period beginning from the Effective 
Date and ending twelve months thereafter (the First Project Year), and any twelve-month period 
beginning at the end of the First Project Year or at the end of any subsequent Project Year;
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(hh)
“PMU” means the Project Management Unit at CNLS referred to in paragraph 
A.3 of Schedule 4 to this Agreement and established pursuant to Section 7.01 (e) of this 
Agreement;
(ii)
“PSO” means a Ministry of the Borrower, with the exception of MOPH, or a 
public sector organization of the Borrower, which has met the eligibility criteria set out in the 
Project Implementation Manual and the requirements of Schedule 4 to this Agreement and, as a 
result, whose Action Plan has been financed or is entitled to be financed with a part of the 
proceeds of the Credit;
(jj)
“Second Generation Special Accounts” means the accounts referred to in Part 
B.1 (b) of Schedule 1 to this Agreement;
(kk)
“Special Account A” means the Special Account opened for withdrawals in 
respect of expenditures made under Parts A.2 and A.3 of the Project, and referred to in Part B.1 
(a) of Schedule 1 to this Agreement;
(ll)
“Special Account B” means the Special Account opened for withdrawals in 
respect of expenditures made under Parts A.1, B and C of the Project, and referred to in Part B.1 
of Schedule 1 to this Agreement;
(mm)
“Special Accounts” means Special Account A and Special Account B; and
(nn)
“Subproject” means a specific activity or set of activities financed, or proposed 
to be financed, through a Grant made under Part A.2 or Part A.3 of the Project.
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 seventeen million eight hundred thousand Special Drawing Rights (SDR 
17,800,000).
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) amounts paid (or, if the 
Association shall so agree, amounts to be paid) by the Borrower on account of withdrawals made 
for the benefit of a CBO or a CSO under a Grant to meet the reasonable costs of goods, works 
and services required for a Subproject to be financed under Part A.2 or Part A.3, respectively, of 
the Project, and in respect of which the withdrawal from the Credit Account is requested; and (ii) 
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.
Section 2.03. The Closing Date shall be September 15, 2006 or such later date as the 
Association shall establish. The Association shall promptly notify the Borrower of such later 
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Section 2.03. The Closing Date shall be September 15, 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 15 and October 15 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 15 and 
October 15 commencing April 15, 2012 and ending October 15, 2041. Each installment to and 
including the installment payable on October 15, 2021 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 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 
Page  8
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 French Republic 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 
CNLS with due diligence and efficiency and in conformity with appropriate administrative, 
financial and public health practices, and shall provide, or cause to be provided, 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 
Page  9
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 designed to ensure the 
future achievement of the objectives of the Project; and
(b)
afford the Association a reasonable opportunity to exchange views with the 
Borrower on said plan.
Section 3.04. Without limitation to its obligations under Section 3.01 of this Agreement, 
the Borrower shall for the purposes of the Project:
(a)
open and thereafter maintain, for the duration of  the Project, an account  in CFA 
Francs in the name of CNLS (the Project Account) in  the Treasury and on terms and conditions 
satisfactory to the Association;
(b)
deposit into the Project Account an initial contribution of CFA Francs 
53,000,000;
(c)
thereafter deposit into the Project Account, by January 31 and October 31 in 
each year, until the completion of the Project, such amounts as shall be required to timely 
replenish the Project Account back to the amount of the initial deposit referred to in paragraph 
(b) above, or whenever the balance of the Project Account shall be less than CFA Francs 
25,000,000; and
(d)
ensure that amounts deposited into the Project Account shall be used exclusively 
to make payments to meet expenditures made or to be made in respect of the reasonable cost of 
goods, works and services for the Project in addition of those financed from the proceeds of the 
Credit.
ARTICLE IV
Financial Covenants
Section 4.01. (a) The Borrower shall maintain a financial management system, including 
records and accounts, and prepare financial statements in a format acceptable to the Association 
adequate to reflect the operations, resources and expenditures related to the Project.
(b)
The Borrower shall:
(i)
have the records, accounts and financial statements referred to in 
paragraph (a) of this Section and the records and accounts for the 
Special Accounts and Second Generation Special Accounts for each 
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paragraph (a) of this Section and the records and accounts for the 
Special Accounts and Second Generation Special Accounts for each 
fiscal year audited, in accordance with auditing standards acceptable to 
the Association, consistently applied, by independent auditors acceptable 
to the Association;
(ii)
furnish to the Association as soon as available, but in any case not later 
than six months after the end of each such year: (A) certified copies of 
the financial statements referred to in paragraph (a) of this Section for 
such year as so audited; and (B) an opinion on such statements, records 
and accounts and report of such audit, by said auditors, of such scope 
and in such detail as the Association shall have reasonably requested; 
and
(iii)
furnish to the Association such other information concerning said 
records and accounts, and the audit thereof, and concerning said 
auditors, as the Association may 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 separate 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 referred to in paragraph (a) of said 
section 4.01 in order to enable the Borrower, not later than eighteen (18) months after the 
Effective Date or such later date as the Association shall agree, to prepare quarterly Project 
Management Reports, acceptable to the Association, each of which:
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(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 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 implement the CWMP, in a manner and according to a 
timing satisfactory to the Association.
Section 5.02. By the end of the First Project Year, the Borrower shall adopt a master plan 
for the development of a comprehensive monitoring and information system to monitor the 
HIV/AIDS epidemic in its territory on an ongoing basis, in form and substance satisfactory to the 
Association.
Section 5.03. By the end of the First Project Year, the Borrower shall adopt a 
comprehensive baseline study to allow evaluation of key performance indicators related to 
HIV/AIDS issues, including epidemiological and behavorial aspects of the HIV/AIDS epidemic, 
in form and substance acceptable to the Association.
Section 5.04. (a) By November 15 of each year during the implementation of the Project, 
commencing on November 15, 2002, the Borrower shall submit to the Association for its review 
and comments its draft of: (i) the program of activities to be carried out under the Project during 
the following year; and (ii) the related budget and procurement schedule.
Page  12
(b)
The Borrower shall, in preparing the final version of such program, budget and 
procurement schedule, take into account the comments made by the Association.
(c)
By December 31 of each year during the implementation of the Project, 
commencing on December 31, 2002, the Borrower shall adopt the program of activities to be 
carried out under the Project during the following calendar year, and the annual related budget 
and procurement plan, in form and substance satisfactory to the Association.
Section 5.05. The Borrower shall, by April 30, 2002,  employ the independent auditors 
referred in Section 4.01 (b) of this Agreement in accordance with the provisions of Section II of 
Schedule 3 to this Agreement.
ARTICLE VI
Remedies of the Association
Section 6.01. Pursuant to Section 6.02 (l) of the General Conditions, the following 
additional events are specified:
(a)
a situation shall have arisen which shall make it improbable that the Program or 
a significant part thereof will be carried out; and
(b)
the New CNLS Decree, governing the operations of CNLS, and the 
Decentralized Committees of CNLS shall have been amended, suspended, abrogated, repealed or 
waived so as to materially and adversely affect the implementation of the Project.
Section 6.02. Pursuant to Section 7.01 (h) of the General Conditions, the following 
additional event is specified, namely that any event specified in Section 6.01 of this Agreement 
shall occur and shall continue for a period of 30 days after notice thereof shall have been given 
by the Association to the Borrower.
ARTICLE VII
Effective Date; Termination
Section 7.01. 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 issued the New CNLS Decree, in form and substance 
satisfactory to the Association, and the several units and committees to be established under the 
New CNLS Decree, including a technical secretariat at CNLS and the Decentralized Committees 
of CNLS, have been established each in a form and with functions, staffing and resources 
Page  13
satisfactory to the Association;
(b)
the Project Account has been opened and the initial contribution referred to in 
Section 3.04 (b)  of this Agreement has been deposited therein;
(c)
the Borrower has adopted the Project Implementation Manual, the 
Administrative, Accounting and Financing Manual, and the Monitoring and Evaluation Manual, 
all in form and substance satisfactory to the Association;
(d)
the Borrower has adopted a procurement plan for the implementation of the 
Project during the First Project Year;
(e)
the Borrower has established the PMU in a manner and with functions and 
resources satisfactory to the Association, and with the following staff: a Project coordinator, a 
HIV/AIDS specialist, a financial management specialist, a monitoring and evaluation specialist 
and a procurement specialist, all appointed in accordance with the provisions of Section II of 
Schedule 3 to this Agreement;
(f) 
the Borrower has established an accounting and financial management system 
for the Project satisfactory to the Association;
(g)
the Borrower has employed the Financial Management Firm in accordance with 
the provisions of Section II of Schedule 3 to this Agreement; and
(h)
the Borrower has adopted the CWMP, in form and substance satisfactory to the 
Association.
Section 7.02. The date ninety days (90) days after the date of this Agreement is hereby 
specified for the purposes of Section 12.04 of the General Conditions.
ARTICLE VIII
Representative of the Borrower; Addresses
Section 8.01. The Minister of the Borrower at the time responsible for finance is 
designated as representative of the Borrower for the purposes of Section 11.03 of the General 
Conditions.
Section 8.02. The following addresses are specified for the purposes of Section 11.01 of 
the General Conditions:
For the Borrower:
Page  14
Ministère des Finances et de l’Economie
B.P. 302
Cotonou
Republic of Benin
Cable address:
Telex:
MINFINANCES
5009 or 5289 MINFIN
Cotonou
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 Cotonou, 
Republic of Benin, as of the day and year first above written.
REPUBLIC OF BENIN
By
/s/ Abdoulaye Bio Tchané
Authorized Representative
INTERNATIONAL DEVELOPMENT ASSOCIATION
Page  15
By
/s/ Sidi Boubacar
Acting 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
60,000
85%
(2)
Goods:
100% of foreign
expenditures and
85% of local
expenditures
(a) vehicles, motorcycles
1,550,000
     and equipment
(b) drugs, tests and 
2,320,000
      reagents
(3)
Consultants’ services
2,320,000
85% 
training and audits
(4)
Grants for Subprojects
100% of amounts
disbursed
(a)
under Part  A.2 of 
      6,190,000
the Project
(b)
under Part A.3 of
      1,550,000
the Project
(5)
Operating costs
1,550,000
80%
(6)
Unallocated                                        2,260,000
TOTAL
17,800,000
2.
For the purposes of this Schedule:
(a)
the term “foreign expenditures” means expenditures in the currency of any 
Page  16
(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; provided, 
however, that if the currency of the Borrower is also that of another country from the territory of 
which goods or services are supplied, expenditures in such currency for such goods or services 
shall be deemed to be “foreign expenditures”; and
(c)
the term “operating costs” means the incremental operating costs incurred on 
account of Project implementation, management and supervision, including travel and other 
allowances, local contractual staff salaries, utilities, communication costs, office supplies, office 
equipment and vehicle maintenance and operation costs, but excluding salaries of the Borrower’s 
civil servants.
3.
Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in 
respect of:
(a)
a Grant, unless the Grant has been made in accordance with eligibility criteria 
and on terms and conditions set forth or referred to in the Project Implementation Manual and the 
provisions of Schedule 4 to this Agreement; and
(b)
payments made for expenditures prior to the date of this Agreement.
4.
The Association may require withdrawals from the Credit Account to be made on the 
basis of statements of expenditure for expenditures for: (i) goods under contracts costing less 
than the equivalent of $100,000 each; (ii) works under contracts costing less than the equivalent 
of $20,000 each; (iii) consultant services under contracts costing less than: (A) $50,000 
equivalent each for consulting firms, and (B) $25,000 equivalent each for individual consultants; 
and (iv) training and operating costs, all under such terms and conditions as the Association shall 
specify by notice to the Borrower.
B.
Special Accounts and Second Generation Special Accounts
1.
(a)  
The Borrower shall open and maintain in CFA Francs two separate special 
accounts in a commercial bank and on terms and conditions satisfactory to the Association: (i) 
Special Account A; and (ii) Special Account B; said terms and conditions shall include 
appropriate protection against set-off, seizure and attachment, of the two separate special deposit 
accounts in CFA Francs. 
(b) 
The Borrower shall additionally open and maintain in CFA Francs, for the 
benefit of  the Financial Management Firm in each of the six administrative areas (départements
)
of the Borrower’s territory where the Financial Management Firm shall have an office, one 
Second Generation Special Account of Special Account A, all in a commercial bank and on 
terms and conditions satisfactory to the Association, including appropriate protection against 
Page  17
terms and conditions satisfactory to the Association, including appropriate protection against 
set-off, seizure and attachment.
2.
After the Association has received evidence satisfactory to it that a Special Account has 
been opened, withdrawals from the Credit Account of amounts to be deposited into said Special 
Account shall be made as follows:
(a)
until the Association 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 Borrower 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 Association of a Project Management Report pursuant to 
Section 4.02 (b) of this Agreement, accompanied by a request from the Borrower 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 Borrower out of a 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.
4.
Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be 
required to make further deposits into any 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 any Special Account; or (B) the records and accounts reflecting expenditures 
with respect to which withdrawals were made on the basis of Project Management Reports.
5.
The Association 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 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 Accounts may be made and what procedures should be 
followed for making such deposits, and shall notify the Borrower of its determination.
Page  18
6.
(a)
If the Association 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 Association, the Borrower shall, promptly upon notice from the 
Association, provide such additional evidence as the Association may request, or deposit into 
said Special Account (or, if the Association shall so request, refund to the Association) an 
amount equal to the amount of such payment. Unless the Association shall otherwise agree, no 
further deposit by the Association into any Special Account shall be made until the Borrower has 
provided such evidence or made such deposit or refund, as the case may be.
(b)
If the Association 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 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 a Special Account.
(d)
Refunds to the Association made pursuant to sub-paragraph (a), (b) or (c) of this 
paragraph 6 shall be credited to the Credit Account for subsequent withdrawal or for cancellation 
in accordance with the provisions of the Development Credit Agreement.
7.
 (a)
The Borrower shall withdraw from the Special Account A and deposit into each 
Second Generation Special Account funds to assist the  Financial Management Firm to pay for 
goods, works  and services under Parts A.2 and A.3 of the Project. Such withdrawals and 
deposits shall be in amounts sufficient to assist the  Financial Management Firm in the manner 
contemplated in Schedule 1 to this Agreement, to pay for such goods, works and services in due 
course, provided that, at no time, shall the Borrower cause the amount held in any Second 
Generation Special Account to exceed CFA Francs 50,000,000. 
(b)
Any withdrawal from any Second Generation Special Account must be justified 
to the Borrower by the same documentation and other evidence regarding Eligible Expenditures 
required pursuant to Part B.3 of this Schedule.
(c)
If the Association or the Borrower shall have determined at any time that any 
amount outstanding in any Second Generation Special Account will not be required to cover 
further payments for eligible expenditures, the Financial Management Firm shall, promptly upon 
notice from the Association or the Borrower, refund to the Special Account A such outstanding 
amount.
Annex A
to
SCHEDULE 1
Page  19
Operation of 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: (i) in respect of 
Special Account A, an amount of CFA Francs 800,000,000 to be withdrawn from the Credit 
Account and deposited into Special Account A pursuant to paragraph 2 of this Annex; provided, 
however, that, unless the Association shall otherwise agree, said Authorized Allocation shall be 
limited to an amount of CFA Francs 400,000,000 until the aggregate amount of withdrawals from 
the Credit Account of amounts allocated to Special Account A’s Eligible Categories, plus the 
total amount of all outstanding special commitments entered into by the Association 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 5,000,000; and (ii) in respect of Special Account B, an 
amount of CFA Francs 500,000,000 to be withdrawn from the Credit Account and deposited into 
Special Account B pursuant to paragraph 2 of this Annex; provided, however, that, unless the 
Association shall otherwise agree, said Authorized Allocation shall be limited to an amount of 
CFA Francs 400,000,000, until the aggregate amount of withdrawals from the Credit Account of 
amounts allocated to Special Account B’s Eligible Categories, plus the total amount of all 
outstanding special commitments entered into by the Association 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 5,000,000.
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 said Special Account’s Authorized Allocation, the 
Borrower shall furnish to the Association a request or requests for deposit into the said Special 
Account of an amount or amounts which in the aggregate do not exceed the 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 Account such amount as the Borrower shall have 
requested and as shall have been shown by said documents and other evidence to have been paid 
out of 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 a Special Account, 
once the total unwithdrawn amount of the Credit allocated to said Special Account’s Eligible 
Categories minus the total amount of all outstanding special commitments entered into by the 
Association pursuant to Section 5.02 of the General Conditions in respect of expenditures to be 
Page  20
Association pursuant to Section 5.02 of the General Conditions in respect of expenditures to be 
financed out of the proceeds of the Credit allocated to said Categories, shall equal the equivalent 
of twice the amount of said Special Account’s Authorized Allocation. Thereafter, withdrawal 
from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to said 
Categories 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 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 Association from the Credit Account 
under one or more of said Special Account’s Eligible Categories.
2.
Each application for withdrawal from the Credit 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 Credit, the 
Association shall, on behalf of the Borrower, withdraw from the Credit 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 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 Project Management 
Report to be remaining in said Special Account, shall not exceed: (i) CFA Francs 800,000,000 in 
respect of Special Account A; and (ii) CFA Francs 500,000,000 in respect of Special Account B.
SCHEDULE 2
Description of the Project
The objectives of the Project are to contribute in curbing the spread of the HIV/AIDS 
epidemic and in mitigating its impact on PLWHA or people affected by HIV/AIDS through: (i) 
accelerating, intensifying, diversifying and empowering the response of civil society and the 
public sector to the HIV/AIDS epidemic; and (ii) building capacity in both civil society and the 
public sector to achieve and sustain the scaled-up response to the HIV/AIDS epidemic.
Page  21
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
: Supporting Civil Society Response
1.
Strengthening the institutional and technical capacities of CBOs and CSOs to prepare, 
execute and monitor Subprojects, carrying out HIV/AIDS awareness raising campaigns, and 
training of trainers at the national level participating in HIV/AIDS prevention and control 
activities, all through the provision of technical advisory services.
2.
Provision of Grants to CBOs for the financing of Subprojects for HIV/AIDS related 
activities, including, in particular: (i) media and cultural event communication activities to 
promote and valorize behavioral change; (ii) incentive activities to ensure follow-up on such 
behavioral change; and (iii) activities to support PLWHA and their affected families.
3. 
Provision of Grants to CSOs for the financing of Subprojects for HIV/AIDS related 
activities, including, in particular: (i) creation of centers of care for PLWHA; (ii) facilitation of 
community based support for HIV/AIDS orphans and affected families; (iii) promotion of 
collaboration with the national and decentralized associations of traditional practitioners; (iv) 
support for HIV/AIDS transmissions on community radio networks; (v) programs of anonymous 
voluntary testing and counseling for HIV/AIDS in high risk/high prevalence zones; and (vi) 
programs facilitating “peer group” counseling among, inter alia, youth groups and commercial 
sex workers.
Part B
: Supporting Public Sector Response
1.
Assisting the PSOs to implement Action Plans consisting of HIV/AIDS prevention and 
control activities and initiatives, focusing, in particular, on: (i) awareness raising, advocacy and 
counseling activities encouraging appropriate behavioral change, or socio-psychological support 
needed by the staff of the PSOs; and (ii) activities related to the specific mandate of the PSOs; all 
through the provision of technical advisory services and training, and the acquisition of goods.
2.
Assisting MOPH to: (i)  improve access to HIV testing and counseling; (ii) improve the 
prevention of HIV transmission; (iii) improve the scale and quality of provision of health care to 
PLWHA; (iv) initiate a systematic program of collaboration with AT; and (v) support HIV/AIDS 
prevention and control activities for its staff; all through (i)  the acquisition of essential 
laboratory equipment and reagents and other consumables, including the laboratory infrastructure 
needed to develop HART; (ii)  the acquisition of tests and drugs for the prevention of mother to 
child transmission of HIV/AIDS and  the management of related opportunistic diseases; (iii) the 
provision of  skills training  for all decentralized levels of health professional staff and traditional 
practitioners, in particular for the implementation of the CWMP; and (iv) the provision of 
technical advisory services. 
Part C
: Support to Project Coordination, Management, Monitoring and Evaluation
1.
Strengthening the capacity of CNLS and PMU to carry out and implement a 
Page  22
1.
Strengthening the capacity of CNLS and PMU to carry out and implement a 
coordination, management, monitoring and evaluation framework for the Project through the 
provision of technical advisory services and training, and the acquisition of goods, equipment 
and vehicles.
2.
Strengthening the capacity of CDLSs, CALSs, CCLSs and CVLSs to carry out the 
coordination, monitoring and evaluation of Subprojects, through the provision of training.
3.
Carrying out the activities under the  Monitoring and Evaluation Manual through the 
provision of technical advisory services.
4.
 Carrying out the accounting, financial reporting and disbursement functions related to 
the Subprojects to be implemented by CBOs and CSOs at a decentralized level, through the 
provision of technical advisory services and training, the renovation and equipment of office 
space, and the acquisition of vehicles.
5. 
Carrying out financial and technical audits of the Project and the Financial Management 
Firm, through the provision of technical advisory services.
* * *
The Project is expected to be completed by March 15, 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 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.
Except as otherwise provided in Part C of this Section, goods and works shall be 
procured under contracts awarded in accordance with the provisions of Section II of the 
Page  23
Guidelines and paragraph 5 of Appendix 1 thereto.
2.
The following provisions shall apply to goods to be procured under contracts awarded in 
accordance with the provisions of paragraph 1 of this Part B.
Grouping of contracts
To the extent practicable, contracts for goods shall be grouped in bid packages estimated 
to cost $100,000 equivalent or more each.
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 $640,000 equivalent, may be procured under contracts awarded 
in accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines.
(b)
Works estimated to cost $20,000 equivalent or more per contract, up to an 
aggregate amount not to exceed $40,000 equivalent, may be procured under contracts awarded in 
accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines
2.
Community Participation
Goods and works required for Subprojects may be procured in accordance with 
procedures acceptable to the Association and described in the Project Implementation Manual.
3.
Procurement of Small Works
Works estimated to cost less than $20,000 equivalent per contract, up to an aggregate 
amount not to exceed $40,000 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 
Page  24
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: (i) each contract for goods estimated to cost the equivalent of $100,000 
or more and to be procured under international competitive bidding procedures; (ii) the first three 
contracts for goods estimated to cost the equivalent of $100,000 or less and to be procured 
through national competitive bidding procedures; (iii) each contract for works estimated to cost 
the equivalent of $20,000 or more; and (iv) each of the first two contracts for works estimated to 
cost less than the equivalent of $20,000 and to be procured on the basis of quotations under Part 
C, paragraph 3 of this Section, the procedures set forth in paragraphs 2 and 3 of Appendix 1 to 
the Guidelines shall apply.
3.
Post Review
With respect to each contract not governed by paragraph 2 of this Part, the procedures set 
forth in paragraph 4 of Appendix 1 to the Guidelines shall apply.
Section II
.
Employment of Consultants
Part A
:
General
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 short list of 
consultants, estimated to cost less than $20,000 equivalent per contract, may comprise entirely 
Page  25
consultants, estimated to cost less than $20,000 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 for financial and technical audits 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 3.6 of the Consultant Guidelines.
2.
Selection Based on Consultants’ Qualifications
Services estimated to cost less than $50,000 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.
3.
Single Source Selection
Services for information, education and communication  training, and services which are 
estimated to cost less than $10,000 per contract, 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. 
4.
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.
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 of consulting firms estimated 
Page  26
(a)
With respect to each contract for the employment of consulting firms estimated 
to cost the equivalent of $50,000 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 $25,000 or more, but less than the equivalent of $50,000, 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 $25,000 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. However, the 
exception to prior review by the Association shall not apply to: (i) the terms of reference of such 
contracts, regardless of their estimated cost; and (ii) each of the first two contracts for the 
strengthening of the institutional and technical capacities of CBOs under Part A.1 of the Project, 
regardless of their estimated cost.
SCHEDULE 4
Implementation Program
A. Overall
Project Implementation
1.         Except as the Association shall otherwise agree, the Borrower shall: (i) apply the criteria, 
policies, procedures and arrangements set out in the Project Implementation Manual, the 
Administrative, Accounting and Financial Manual and the Monitoring and Evaluation Manual; 
and (ii) not amend or waive, or permit to be amended or waived, the CWMP, the Project 
Implementation Manual, the Administrative, Accounting and Financial Manual and the 
Monitoring and Evaluation Manual or any provision thereof, in a manner which, in the opinion 
of the Association, may materially and adversely affect the implementation of the Project. 
2.
(a)
The Borrower shall maintain CNLS with an Assembly, a Board, a National 
Consultative Group, a Technical Secretariat and the Decentralized Committees of CNLS  in a 
form and with functions, staffing and resources consistent with the New CNLS Decree  and 
satisfactory to the Association. 
(b)
The Decentralized Committees of CNLS shall assist: (i) CNLS  in the 
establishment of an appropriate framework for the execution of the Program; and (ii) CNLS and 
Page  27
(b)
The Decentralized Committees of CNLS shall assist: (i) CNLS  in the 
establishment of an appropriate framework for the execution of the Program; and (ii) CNLS and 
PMU in the implementation of the Project
as specified in paragraphs B and C below and in more 
detail in the Project Implementation Manual.
(c)
The Technical Secretariat, a multi-sector unit, shall assist CNLS in, inter alia, 
selecting the Action Plans to be implemented by PSOs, reviewing the execution of the 
Subprojects and Action Plans and preparing completion reports relating thereto, and keeping 
CNLS informed of the implementation of the activities under the Monitoring and Evaluation 
Manual.
3.
(a)
The Borrower shall maintain a PMU in a form and with functions, staffing and 
resources satisfactory to the Association. PMU’s functions shall include: (i) financial 
management of the Project, on the basis of the Administrative, Accounting and Financial 
Manual, including disbursement for the Actions Plans which meet the criteria set forth in 
paragraph D.1 below; (ii) facilitation of Project execution within the framework of the Program; 
and (iii) supporting the Technical Secretariat of CNLS in the carrying out of its functions under 
the Project.
(b)
The Borrower shall, through PMU, establish an independent ad hoc procurement 
evaluation commission in a form and with functions, staffing and resources satisfactory to the 
Association, to be responsible for the processing, in accordance with the Project Implementation 
Manual, of all Project bids requiring action at the national level, proposals and contracts for the 
Project, including the Action Plan Agreements.
B.
Subprojects Estimated to Cost the Equivalent of $3,000 or less to be Implemented by a 
CBO, and Related CBO Grant Agreements
1.
Without limitation upon the provisions of paragraph A.1 above, no Subproject to be 
implemented by a CBO shall be eligible for financing out of the proceeds of the Credit unless the 
concerned CALS or CCLS, as the case may be, has determined, on the basis of an appraisal 
conducted in accordance with the guidelines set forth in the Project Implementation Manual, that 
the Subproject satisfies the eligibility criteria specified below and in more detail in the Project 
Implementation Manual, which shall include the following:
(a)
the Subproject shall be for any of the types of activities referred to in Part A.2 of 
the Project;
(b)
the Subproject shall be initiated by a CBO or a CSO for the account of a CBO;
(c)
the Subproject shall be implemented by a CBO;
(d)
the Subproject shall be in accordance with the standards specified in the Project 
Implementation Manual; 
Page  28
(e)
the Subproject shall be in compliance with the standards set forth in the 
applicable laws and regulations of the Borrower relating to the Program; and
(f)
no Grant shall be in excess of the equivalent of $3,000.
2.
Subprojects referred to in paragraph B.1 above shall be carried out pursuant to CBO  
Grant Agreements, to be concluded between the relevant CDLS, the Financial Management Firm 
and the relevant CBO, under terms and conditions satisfactory to the Association, which shall 
include the following:
(a)
provisions requiring the financing to be made on a grant basis;
(b)
the obligation for the relevant CBO to: (i) carry out the Subproject with due 
diligence and efficiency and in accordance with sound administrative, financial and public health 
standards and the provisions of the Project Implementation Manual; (ii) maintain adequate 
records to reflect, in accordance with sound accounting practices, the operations, resources and 
expenditures in respect of the Subproject; and (iii) comply with the reporting obligations 
specified in the Project Implementation Manual;
(c)
the requirement that: (i) the goods, works and services to be financed from the 
proceeds of the Credit shall be procured in accordance with the procedures set forth in Schedule 
3
to this Agreement; and (ii) such goods, works and services shall be used exclusively in the 
carrying out of the Subproject;
(d)
the right of CNLS, the relevant CDLS, PMU and the Financial Management 
Firm to inspect, by themselves, or jointly with the Association, if the Association shall so 
request, the goods, works, sites, plants and construction included in the Subproject, the 
operations thereof and any relevant records and documents;
(e)
the right of CNLS, the relevant CDLS, PMU and the Financial Management 
Firm to obtain all information as CNLS, the relevant CDLS, PMU, the Financial Management 
Firm or the Association shall reasonably request regarding the administration, operations and 
financial conditions of the Subproject; and 
(f)
the right of the relevant CDLS to suspend or terminate the right of the relevant 
CBO to use the Grant for the Subproject upon failure by the relevant CBO to perform any of its 
obligations under its CBO Grant Agreement. 
C.
Subprojects Estimated to Cost the Equivalent of $15,000 or Less and to be Implemented 
by a CSO, and Related CSO Grant Agreements
1.
Without limitation upon the provisions of paragraph A.1 above, no Subproject to be 
implemented by a CSO and estimated to cost the equivalent of $15,000 or less shall be eligible 
for financing out of the proceeds of the Credit unless the relevant CDLS has determined, on the 
basis of an appraisal conducted in accordance with the guidelines set forth in the Project 
Page  29
for financing out of the proceeds of the Credit unless the relevant CDLS has determined, on the 
basis of an appraisal conducted in accordance with the guidelines set forth in the Project 
Implementation Manual, that the Subproject satisfies the eligibility criteria specified below and 
in more detail in the Implementation Manual, which shall include the following:
(a)
the Subproject shall be for any of the types of activities referred to in Part A.3 of 
the Project;
(b)
the Subproject shall be initiated and implemented by a CSO;
(c)
the Subproject shall be in accordance with the standards specified in the Project 
Implementation Manual; 
(d)
the Subproject shall be in compliance with the standards set forth in the 
applicable laws and regulations of the Borrower relating to the Program; and 
(e)
the estimated cost of the Subproject is the equivalent of $15,000 or less.
2.
 Subprojects referred in paragraph C.1 above shall be carried out pursuant to CSO Grant 
Agreements, to be concluded between the relevant CDLS, the Financial Management Firm and 
the relevant CSO, under terms and conditions satisfactory to the Association, which shall include 
the following:
(a)
provisions requiring the financing to be made on a grant basis;
(b)
the obligation for the relevant CSO to: (i) carry out the Subproject with due 
diligence and efficiency and in accordance with sound administrative, financial and public health 
standards and the provisions of the Project Implementation Manual; (ii) maintain adequate 
records to reflect in accordance with sound accounting practices, the operations, resources and 
expenditures in respect of the Subproject; and (iii) comply with the reporting requirements 
specified in the Project Implementation Manual;
(c)
the requirement that: (i) the goods and services to be financed from the proceeds 
of the Credit shall be procured in accordance with the procedures set forth in Schedule 3 to this 
Agreement; and (ii) such goods and services shall be used exclusively in the carrying out of the 
Subproject;
(d)
the right of CNLS, the relevant CDLS, PMU and the Financial Management 
Firm to inspect, by themselves, or jointly with the Association, if the Association shall so 
request, the goods included in the Subproject, the operations thereof and any relevant records and 
documents;
(e)
the right of CNLS, the relevant CDLS, PMU and the Financial Management 
Firm to obtain all information as CNLS, the relevant CDLS, PMU, the Financial Management 
Firm or the Association shall reasonably request regarding the administration, operations and 
Page  30
financial conditions of the Subproject; and 
(f)
the right of the relevant CDLS to suspend or terminate the right of the relevant 
CSO to use the Grant for the Subproject upon failure by the relevant CSO to perform any of its 
obligations under its CSO Grant Agreement. 
D.
Subprojects Estimated to Cost the Equivalent of $15,000 or More and to be Implemented 
by a CSO, and Related CSO Grant  Agreements
1.
Without limitation upon the provisions of paragraph A.1 above, no Subproject to be 
implemented by a CSO, and estimated to cost the equivalent of $15,000 or more shall be eligible 
for financing out of the proceeds of the Credit unless CNLS has determined, on the basis of an 
appraisal conducted in accordance with the guidelines set forth in the Project Implementation 
Manual, that the Subproject satisfies the eligibility criteria specified below and in more detail in 
the Implementation Manual, which shall include the following:
(a)
the Subproject shall be for any of the types of activities referred to in Part A.3 of 
the Project;
(b)
the Subproject shall be initiated and implemented by a CSO;
(c)
the Subproject shall be in accordance with the standards specified in the Project 
Implementation Manual; 
(d)
the Subproject shall be in compliance with the standards set forth in the 
applicable laws and regulations of the Borrower relating to the Program; and
(e)
the estimated cost of the Subproject is superior to the equivalent $15,000 but not 
more than the equivalent of $35,000. 
2.
 Subprojects referred in paragraph D.1 above shall be carried out pursuant to CSO Grant 
Agreements, to be concluded between CNLS, PMU and the relevant CSO, under terms and 
conditions satisfactory to the Association, which shall include the following:
(a)
provisions requiring the financing to be made on a grant basis;
(b)
the obligation for the relevant CSO, to: (i) carry out the Subproject with due 
diligence and efficiency and in accordance with sound administrative, financial and public health 
standards and the provisions of the Project Implementation Manual; (ii) maintain adequate 
records to reflect in accordance with sound accounting practices, the operations, resources and 
expenditures in respect of the Subproject; and (iii) comply with the reporting requirements 
specified in the Project Implementation Manual;
(c)
the requirement that: (i) the goods and services to be financed from the proceeds 
Page  31
(c)
the requirement that: (i) the goods and services to be financed from the proceeds 
of the Credit shall be procured in accordance with the procedures set forth in Schedule 3 to this 
Agreement; and (ii) such goods and services shall be used exclusively in the carrying out of the 
Subproject;
(d)
the right of CNLS and PMU to inspect, by themselves, or jointly with the 
Association, if the Association shall so request, the goods included in the Subproject, the 
operations thereof and any relevant records and documents;
(e)
the right of CNLS and PMU to obtain all information as CNLS, PMU or the 
Association shall reasonably request regarding the administration, operations and financial 
conditions of the Subproject; and 
(f)
the right of CNLS to suspend or terminate the right of the relevant CSO, to use 
the Grant for the Subproject upon failure by the relevant CSO to perform any of its obligations 
under its CSO Grant Agreement. 
E.
Action Plans Estimated to Cost the Equivalent of $15,000 or More and to be 
Implemented by a PSO, and Related Action Plan Agreements
Without limitation upon the provisions of paragraph A.1 above, no Action Plan to be 
implemented by a PSO, and estimated to cost the equivalent of $15,000 or more shall be eligible 
for financing out of the proceeds of the Credit unless CNLS has determined, on the basis of an 
appraisal conducted in accordance with the guidelines set forth in the Project Implementation 
Manual, that the Action Plan satisfies the eligibility criteria specified below and in more detail in 
the Implementation Manual, which shall include the following:
(a)
the Action Plan shall be for any of the types of activities referred to in Part B.1 
of the Project;
(b)
the Action Plan shall be initiated and implemented by a PSO;
(c)
the Action Plan shall be in accordance with the standards specified in the Project 
Implementation Manual; 
(d)
the Action Plan shall be in compliance with the standards set forth in the 
applicable laws and regulations of the Borrower relating to the Program; and
(e)
the estimated cost of the Action Plan is superior to the equivalent $15,000 but 
not more than the equivalent of $50,000.
2.
 Action Plans referred in paragraph E.1 above shall be carried out pursuant to Action 
Plan Agreements, to be concluded between CNLS, PMU and the relevant PSO, under terms and 
conditions satisfactory to the Association, which shall include the following:
Page  32
(a)
provisions requiring the financing to be made on a grant basis;
(b)
the obligation for the relevant PSO, to: (i) carry out the Action Plan with due 
diligence and efficiency and in accordance with sound administrative, financial and public health 
standards and the provisions of the Project Implementation Manual; (ii) maintain adequate 
records to reflect in accordance with sound accounting practices, the operations, resources and 
expenditures in respect of the Action Plan; and (iii) comply with the reporting requirements 
specified in the Project Implementation Manual;
(c)
the requirement that: (i) the goods and services to be financed from the proceeds 
of the Credit shall be procured in accordance with the procedures set forth in Schedule 3 to this 
Agreement; and (ii) such goods and services shall be used exclusively in the carrying out of the 
Action Plan;
(d)
the right of CNLS and PMU to inspect, by themselves, or jointly with the 
Association, if the Association shall so request, the goods included in the Action Plan, the 
operations thereof and any relevant records and documents;
(e)
the right of CNLS and PMU to obtain all information as CNLS, PMU or the 
Association shall reasonably request regarding the administration, operations and financial 
conditions of the Action Plan; and 
(f)
the right of CNLS to suspend or terminate the right of the relevant PSO to use 
the proceeds of the Credit upon failure by the relevant PSO to perform any of its obligations 
under its Action Plan Agreement. 
F.
Reports and Mid-Term Review
1.
The Borrower shall submit to the Association, for its review, quarterly progress reports 
on the status of the Project, including regular beneficiary assessment and beneficiary feedback 
reports and Subproject and Action Plan completion reports.
2.
The Borrower shall:
(a)
maintain policies and procedures adequate to enable it to monitor and evaluate 
on an ongoing basis, in accordance with indicators satisfactory to the Association, 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, not later than March 31 of each year during the implementation of the Project, 
commencing March 31, 2003, 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 calendar year preceding the date of said report and setting 
out the measures recommended to ensure the efficient carrying out of the Project and the 
Page  33
out the measures recommended to ensure the efficient carrying out of the Project and the 
achievement of the objectives thereof during the period following such date; and
(c)
review with the Association, not later than June 30 of each year during the 
implementation of the Project, commencing June 30, 2003, or such later date as the Association 
shall request, 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.
(a)      On or about twenty four months after the Effective Date, the Borrower shall carry 
out jointly with the Association and CNLS a midterm review of the progress made in carrying 
out the Project (hereinafter referred to as the Midterm Review).
The Midterm Review shall cover, amongst other things:
(i)
progress made in meeting the Project’s objectives; 
(ii)
results of the monitoring and evaluation activities under the Project; and
(iii)
overall Project performance against Project performance indicators.
(b)
CNLS shall, at least four weeks prior to the Midterm Review, furnish to the 
Borrower and the Association a separate report describing the status of implementation of each 
component of the Project and a summary report of Project implementation generally.
(c)
CNLS shall, not later than four weeks after the Midterm Review, prepare an 
action program, acceptable to the Borrower and the Association, for the further implementation 
of the Project having regard to the findings of the Midterm Review and, thereafter, implement 
such action program.