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May
30,
1997
His Excellency
Mircea Ciumara
Minister of Finance
Bucharest
Romania
Excellency:
Re:
Japanese Grant for Social Development Fund Project
Grant Number TF
027128
I am writing on behalf of the International Bank for Reconstruction and
Development
(the Bank) to indicate the Bank
’s agreement, as administrator of grant
funds provided by Japan, to make a grant in an amount not exceeding five hundred sixty
seven thousand dollars
($567,000)  (the Grant) to Romania (the Recipient).
The Grant is made in response to the Recipient’s request for financial 
assistance and for the purposes and on the terms and conditions set forth in the Annex
to this Letter Agreement. The Recipient hereby confirms its request that the Bank 
carry out the activities described in paragraph
1
of the Annex to this Letter
Agreement, and represents that it is authorized to contract the Grant for the said
purposes and on the said terms and conditions.
Please confirm your agreement with the foregoing, on behalf of the Recipient, by
signing, dating, and returning to us the enclosed copy of this Letter Agreement. Upon 
receipt by the Bank of the copy of this Letter Agreement countersigned by you, this
Letter Agreement will become effective as of the date of the countersignature.
Very truly yours,
INTERNATIONAL BANK FOR RECONSTRUCTION
AND DEVELOPMENT
By
/s/
Ricardo A. Halperin
Acting Director
Country Department I
Europe and Central Asia Region
AGREED:
 
ROMANIA
By
/s/
Mircea Ciumara
Authorized Representative
Date:
June 16, 1997
ANNEX
Purposes, Terms and Conditions of the Grant
1.
The purpose of the Grant is to assist the Recipient in the preparation of a 
Social Development Fund Project. The technical assistance activities (the Activities) 
for which the Grant is given are as follows:
 (a)
assistance in: (i) designing of the institutional structure of the Social 
Development Funds
(SDFs); (ii) defining the special financial terms under which the 
SDFs will operate;
(iii) specifying the criteria and procedures for selecting 
sub-projects; and (iv) defining the supervsion and monitoring mechanisms;
(b)
a study tour for Romanian counterparts, in countries which have 
established SDFs;
(c)
studies for needs assessment and evaluation of NGOs and local authorities 
capacity to prepare and implement sub-projects; and
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(d)
workshops and training seminars to transfer relevant skills to county and 
local administrations and NGOs.
2.
The Grant shall be used to finance consultants
’
services required for the
Activities. 
3.
The Bank shall carry out the Activities on behalf of the Recipient. The 
Recipient shall cooperate with the Bank to the extent necessary to permit the Bank to
carry out the Activities promptly and effectively, and to evaluate the results of the
Activities. The Recipient shall indemnify the Bank against any costs or liabilities 
incurred by the Bank as a result of claims against the Bank in connection with the
Activities, except those resulting from the gross negligence or willful misconduct of
its staff or external consultants.
4.
It is expected that the Activities will be completed by June 30, 1998. After 
that date, the Bank may at any time cancel the remaining balance of the Grant.
5.
The engagement and supervision of the consultants (the Consultants) required to 
assist in the carrying out of the Activities shall be the responsibility solely of the
Bank and shall be done according to the Bank’s applicable procedures.
6.
The Recipient shall be responsible for the payment of any taxes levied by, or in 
the territory of, Romania on the Consultants or any of the Consultants’ personnel 
(other than nationals or permanent residents thereof) in connection with the 
Activities.
7.
The Recipient may at any time request the Bank in writing to terminate the 
Activities. Whether or not the Recipient has made such a request, the Bank may at any 
time suspend or, after consultation with the Recipient, terminate the right of the
Recipient to receive Grant funds for the Activities if any of the following events has
occurred and is continuing: (a) the Recipient has failed to perform any of its 
obligations under this Letter Agreement; or
(b)
the right of the Recipient  or any
other entity to which the Bank has made a loan with the guarantee of Romania, to make
withdrawals under any loan agreement with the Bank or any development credit agreement
with the International Development Association, shall have been suspended.
8.
The Bank is not an agent of or trustee for the Recipient and shall not have any 
fiduciary relationship with the Recipient. The Recipient shall have no right to any 
portion of the Grant that is not expended by the Bank pursuant to this Letter
Agreement.