Соглашение между Российской Федерацией и Международным банком реконструкции и развития о займе для финансирования проекта восстановления и содержания автомобильных дорог (Loan Number 3706 RU) [англ.]

(Заключено в г. Вашингтоне 22.06.1994)

LOAN AGREEMENT

(HIGHWAY REHABILITATION AND MAINTENANCE PROJECT) BETWEEN RUSSIAN FEDERATION AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

(Washington, 22.VI.1994)

Agreement, dated June 22, 1994, between Russian Federation (the Borrower) and International Bank for Reconstruction and Development (the Bank).

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 Bank to assist in the financing of the Project;

B) the Borrower has obtained from the United States of America a grant in an amount equivalent to 5,000,000 USD to assist in financing the Project on the terms and conditions set forth in the agreement entered into between the Borrower and the United States of America; and

C) the Bank has agreed, on the basis, inter alia, of the foregoing, to extend the Loan to the Borrower upon the terms and conditions set forth in this Agreement;

Now therefore the parties hereto hereby agree as follows:

Section 1.01. The «General Conditions Applicable to Loan and Guarantee Agreements» of the Bank, dated January 1, 1985, with the modifications set forth below (the General Conditions) constitute an integral part of this Agreement:

a) The last sentence of Section 3.02 is deleted.

b) In Section 6.02, sub-paragraph (k) is re-lettered as sub-paragraph (1) and a new sub-paragraph (k) is added to read:

«(k) An extraordinary situation shall have arisen under which any further withdrawals under the Loan would be inconsistent with the provisions of Article III, Section 3 of the Bank's Articles of Agreement.»

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) «FHD» means the Federal Highway Department within MOT;

b) «MOT» means the Borrower's Ministry of Transport;

c) «PIU» means Project Implementation Unit established within FHD;

d) «Project Account» means the account referred to in Section 6.01 (a) of this Agreement, maintained by the Borrower in local currency and to be used for financing the Borrower's contribution to Project expenditures;

e) «Project Preparation Advance» means the project preparation advance granted by the Bank to the Borrower pursuant to an exchange of letters dated September 10, 1992 and May 15, 1993 between the Borrower and the Bank;

f) «Regional Road Administration» means a regional road administration agency in charge of road construction and maintenance;

g) «Road Funds» means the funds established in accordance with the Law of the Russian Federation «On Road Funds», dated October 18, 1991, to finance all construction and maintenance activities for both the federal and regional public road network; and

h) «Special Account» means the account referred to in Section 2.02 (b) of this Agreement.

Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Loan Agreement, various currencies that shall have an aggregate value equivalent to the amount of three hundred million dollars (300,000,000 USD), being the sum of withdrawals of the proceeds of the Loan, with each withdrawal valued by the Bank as of the date of such withdrawal.

Section 2.02. a) The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Loan.

b) The Borrower shall, for the purposes of the Project, open and maintain in dollars a special deposit account in a commercial bank on terms and conditions satisfactory to the Bank, including appropriate protection against set-off, seizure or attachment. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 6 to this Agreement.

c) Promptly after the Effective Date, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and pay to itself the amount required to repay the principal amount of the Project Preparation Advance withdrawn and outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advance shall thereupon be cancelled.

Section 2.03. The Closing Date shall be June 30, 1998 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date.

Section 2.04. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one percent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time.

Section 2.05. a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time, at a rate for each Interest Period equal to the Cost of Qualified Borrowings determined in respect of the preceding Semester, plus one-half of one percent (1/2 of 1%). On each of the dates specified in Section 2.06 of this Agreement, the Borrower shall pay interest accrued on the principal amount outstanding during the preceding Interest Period, calculated at the rate applicable during such Interest Period.

b) As soon as practicable after the end of each Semester, the Bank shall notify the Borrower of the Cost of Qualified Borrowings determined in respect of such Semester.

c) For the purposes of this Section:

i) «Interest Period» means a six-month period ending on the date immediately preceding each date specified in Section 2.06 of this Agreement, beginning with the Interest Period in which this Agreement is signed.

ii) «Cost of Qualified Borrowings» means the cost, as reasonably determined by the Bank and expressed as a percentage per annum, of the outstanding borrowings of the Bank drawn down after June 30, 1982, excluding such borrowings or portions thereof as the Bank has allocated to fund:

A) the Bank's investments; and

B) loans which may be made by the Bank after July 1, 1989 bearing interest rates determined otherwise than as provided in paragraph (a) of this Section.

iii) «Semester» means the first six months or the second six months of a calendar year.

d) On such date as the Bank may specify by no less than six months' notice to the Borrower, paragraphs (a), (b) and (c)(iii) of this Section shall be amended to read as follows:

«a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time, at a rate for each Quarter equal to the Cost of Qualified Borrowings determined in respect of the preceding Quarter, plus one-half of one percent (1/2 of 1%). On each of the dates specified in Section 2.06 of this Agreement, the Borrower shall pay interest accrued on the principal amount outstanding during the preceding Interest Period, calculated at the rates applicable during such Interest Period.»

«b) As soon as practicable after the end of each Quarter, the Bank shall notify the Borrower of the Cost of Qualified Borrowings determined in respect of such Quarter.»

«c) iii) 'Quarter' means a three-month period commencing on January 1, April 1, July 1 or October 1 in a calendar year.»

Section 2.06. Interest and other charges shall be payable semiannually on February 15 and August 15 in each year.

Section 2.07. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement.

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 MOT and FHD with due diligence and efficiency and in conformity with appropriate administrative, financial and technical practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project.

b) Without limitation upon any of its obligations under paragraph (a) of this Section, the Borrower shall: (i) maintain the Project Account referred to in Section 6.01 (a) of this Agreement, and shall replenish said account promptly before each quarter so that the amount deposited in the account at the beginning of each quarter shall not be less than the equivalent of 500,000 USD; (ii) use said account for financing the Borrower's contribution to Project expenditures, including but not limited to expenditures for rent, maintenance and repair of laboratories and office buildings and transportation; and (iii) ensure that sufficient annual allocations will be made within the Road Funds for the Borrower's counterpart contribution to the costs of the Project.

c) Without limitation upon the provisions of paragraph (a) of this Section and except as the Borrower and the Bank shall otherwise agree, the Borrower shall carry out the Project in accordance with the Implementation Program set forth in Schedule 5 to this Agreement.

Section 3.02. a) 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 Loan shall be governed by the provisions of Schedule 4 to this Agreement.

b) For the purposes of bid evaluation, the Borrower shall set up a bid evaluation committee within FHD which shall include, on ad hoc basis, a representative from each Regional Road Administration in whose territory the contract is to be executed.

Section 4.01. a) The Borrower shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof.

b) The Borrower shall:

i) have the records and accounts referred to in paragraph (a) of this Section including those for the Special Account and the Project Account 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 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 Loan Account were made on the basis of statements of expenditure, the Borrower shall:

i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures;

ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account or payment out of the Special 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 5.01. The following events are specified as additional conditions to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions:

a) the Borrower shall have opened a Project Account in a commercial bank on terms and conditions acceptable to the Bank with an initial deposit in local currency equivalent to 500,000 USD;

b) the bidding documents for contracts to be executed in 1994 shall have been prepared and submitted to the Bank for its approval; and

c) FHD shall have appointed consultants to strengthen the PIU's project management capacity pursuant to Section II of Schedule 4 to this Agreement.

Section 5.02. 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 6.01. The Minister of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions.

Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions:

For the Borrower: Ministry of Finance 103097, Moscow Ilyinka Street 9 Russian Federation Telex: 112008

For the Bank:
International Bank for
Reconstruction and Development
1818 H Street, N.W.
Washington, D.C. 20433
United States of America

    Cable address:                                  Telex:
    INTBAFRAD                                       248423 (RCA)
    Washington, D.C.                                82987 (FTCC)

                                                64145 (WUI) or
                                                197688 (TRT)

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.

SCHEDULE 1

WITHDRAWAL OF THE PROCEEDS OF THE LOAN

1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to he financed in each Category:

Category	Amount of the Loan Allocated (Expressed in Dollar Equivalent)	% of Expenditures to be Financed
(1) Civil works	233,800,000	90%
(2) Equipment, materials and	3,500,000	100% of foreign expenditures,
supplies		100% of local expenditures (ex-factory cost) and 70% of local expenditures for other items procured locally
(3) Consultants' services, training, and studies	20,600,000	100%
(4) Refunding of	750,000	Amount due
Project		pursuant to
Preparation		Section 2.02 (c)
Advance		of this Agreement
(5) Unallocated	41,350,000
TOTAL 300,000,000

2. For the purposes of this Schedule:

a) the term «foreign expenditures» means expenditures in the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of the Borrower; and

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 the goods and services are supplied, expenditures in such currency for such goods or services shall be deemed to be «foreign expenditures».

3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expenditures prior to the date of this Agreement.

SCHEDULE 2

DESCRIPTION OF THE PROJECT

The objectives of the Project are to:

i) rehabilitate and improve maintenance of major federal and regional roads;

ii) to strengthen FHD's capacity in the highway management system;

iii) to initiate reform of the financial and institutional structure of the road construction industry; and

iv) to increase the capacity of MOT to develop a policy, legal and institutional framework for transport sector.

The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Bank may agree upon from time to time to achieve such objectives:

1. Rehabilitation of about 1,500 km of high priority links of federal roads selected in accordance with criteria satisfactory to the Bank.

2. Maintenance and road improvements on about 9,500 km of federal roads and 500 km of regional roads selected in agreement with the Bank, in accordance with criteria satisfactory to the Bank.

Acquisition of equipment and materials for laboratories, field testing, traffic counts and vehicle weighing; computers and other office technology and supplies and vehicles for surveying, field inspection, design and supervision of works for FHD to improve its capacity for road management.

1. Design, preparation of bidding documents and supervision of road rehabilitation and maintenance works.

2. Development of FHD staff and local consulting capabilities in highway planning, financing, design and supervision of construction and maintenance, and environmental assessment through provision of consultants' services and training.

3. Training to prepare local contractors to bid for and contract road works.

4. Carrying out of a study to improve the management and efficiency of public expenditures on roads.

5. Implementation of a pavement management system for the federal road network.

6. Assistance for MOT to develop the policy, legal and institutional framework for the transport sector and to restructure the MOT.

The Project is expected to be completed by December 31, 1997.

SCHEDULE 3

AMORTIZATION SCHEDULE

Date Payment Due	Payment of Principal (expressed in dollars) <*>
On each February 15 and August 15 beginning August 15, 1999 through August 15, 2010 And on February 15, 2011	12,500,000.00 12,500,000.00

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<*> The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal. See General Conditions, Sections 3.04 and 4.03.

PREMIUMS ON PREPAYMENT

Pursuant to Section 3.04 (b) of the General Conditions, the premium payable on the principal amount of any maturity of the Loan to be prepaid shall be the percentage specified for the applicable time of prepayment below:

Time of Prepayment	Premium
	The interest rate (expressed as a percentage per annum) applicable to the Loan on the day of prepayment multiplied by:
Not more than three years before maturity	0.18
More than three years but not more than six years before maturity	0.35
More than six years but not more than 11 years before maturity	0.65
More than 11 years but not more than 15 years before maturity	0.88
More than 15 years before maturity	1.00

SCHEDULE 4

PROCUREMENT AND CONSULTANTS' SERVICES

Section I. PROCUREMENT OF GOODS AND WORKS

1. Except as provided in Part C hereof, goods and works shall be procured under contracts awarded in accordance with procedures consistent with those set forth in Sections I and II of the «Guidelines for Procurement under IBRD Loans and IDA Credits» published by the Bank in May 1992 (the Guidelines).

a) For fixed-price contracts, the invitation to bid referred to in paragraph 2.13 of the Guidelines shall provide that, when contract award is delayed beyond the original bid validity period, the successful bidder's bid price will be increased for the period to be established in the bidding document by two predisclosed correction factors acceptable to the Bank, one to be applied to all foreign currency components and the other to the local currency component of the bid price. Such an increase shall not be taken into account in the bid evaluation.

b) In the procurement of goods and works in accordance with this Part A, the Borrower shall use the relevant standard bidding documents issued by the Bank, with such modifications thereto as the Bank shall have agreed to be necessary for the purposes of the Project. Where no relevant standard bidding documents have been issued by the Bank, the Borrower shall use bidding documents based on other internationally recognized standard forms agreed with the Bank.

2. Bidders for civil works shall be prequalified as provided in paragraph 2.10 of the Guidelines.

3. To the extent practicable, contracts for civil works shall be grouped into bid packages estimated to cost the equivalent of 1,000,000 USD or more.

In the procurement of goods in accordance with the procedures described in Part A.1 hereof, goods manufactured in the Russian Federation may be granted a margin of preference in accordance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraphs 1 through 4 of Appendix 2 thereto.

1. Civil works estimated to cost the equivalent of 1,000,000 USD or less per contract, up to an aggregate amount equivalent to 95,000,000 USD, may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Bank, including prequalification of local contractors.

2. Items or group of items estimated to cost the equivalent of 300,000 USD or less per contract, up to an aggregate amount equivalent to 800,000 USD, may be procured under contracts awarded on the basis of comparison of price quotations obtained from at least three suppliers from at least three different countries eligible under the Guidelines, in accordance with procedures acceptable to the Bank.

3. Items or group of items estimated to cost the equivalent of 20,000 USD or less per contract, up to an aggregate amount equivalent to 200,000 USD, may be procured under contracts awarded on the basis of comparison of price quotations obtained from at least three suppliers eligible under the Guidelines, in accordance with procedures acceptable to the Bank.

4. Contracts for goods which are of proprietary nature or which require standardization with existing equipment, up to an aggregate amount equivalent to 1,200,000 USD, may be awarded after direct negotiations with suppliers, in accordance with procedures acceptable to the Bank.

1. Review of prequalification:

With respect to the prequalification of bidders as provided in Part A.2 and Part C.1 hereof, the procedures set forth in paragraph 1 of Appendix 1 to the Guidelines shall apply.

2. Review of invitations to bid and of proposed awards and final contracts:

a) With respect to each contract for civil works and goods estimated to cost the equivalent of 300,000 USD or more, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contracts are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract required to be furnished to the Bank pursuant to said paragraph 2 (d) shall be furnished to the Bank prior to the making of the first payment out of the Special Account in respect of such contract.

b) With respect to each contract not governed by the preceding paragraph, the procedures set forth in paragraphs 3 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, said procedures shall be modified to ensure that the two conformed copies of the contract together with the other information required to be furnished to the Bank pursuant to said paragraph 3 shall be furnished to the Bank as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 5 to this Agreement.

c) The provisions of the preceding subparagraph (b) shall not apply to contracts on account of which withdrawals are to be made on the basis of statements of expenditure.

3. The figure of 15% is hereby specified for purposes of paragraph (A) of Appendix 1 to the Guidelines.

Section II. EMPLOYMENT OF CONSULTANTS

1. In order to assist the Borrower in carrying out the Project, the Borrower shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Bank on the basis of the «Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency» published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower shall employ such consultants under contracts using the standard form of contract for consultant's services issued by the Bank, with such modifications as shall have been agreed by the Bank. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use other standard forms agreed with the Bank.

2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts shall not apply to contracts estimated to cost less than 75,000 USD equivalent each. However, this exception to prior Bank review shall not apply to the terms of reference for such contracts nor to the employment of individuals, to single source selection of firms, to assignments of a critical nature as reasonably determined by the Bank and to amendments of contracts raising the contract value to 75,000 USD equivalent or above.

SCHEDULE 5

IMPLEMENTATION PROGRAM

1. For the purpose of administration, of the activities to be carried out under the Project, except for Part C (5) of the Project, the Borrower shall maintain within FHD the PIU to be headed by a full-time project coordinator to be employed in accordance with Section II of Schedule A to this Agreement, who shall be assisted by competent staff in adequate numbers.

2. The Borrower shall carry out or cause FHD to carry out an action plan, satisfactory to the Bank, which shall include:

a) exchange of views on the program of road reconstruction, rehabilitation and maintenance during the annual budget preparation;

b) development of accounting and auditing system for the Federal Road Fund by January 31, 1995;

c) development of a maintenance strategy for the Russian federal road system based on a model calibrated for Russian road conditions. The Borrower shall submit the maintenance strategy for the Bank's review by December 31, 1994;

d) preparation of a road safety program by December 31, 1994; and

e) development of an adequate system of environmental assessments of road maintenance and construction by July 1, 1994.

3. The Borrower shall:

a) by March 1, 1994, implement the results of a study to develop cost-escalation formulae to be included in civil works contracts;

b) by March 31, 1995, on the basis of a study to be carried out under Part C(3) of the Project, prepare recommendations for improved road financing, including a timetable to implement said recommendations; and

c) consult with the Bank on any proposed changes to the road financing system.

4. Not later than one month after the end of each quarter, the Borrower shall furnish to the Bank quarterly progress reports, of such coverage, detail and format as the Bank may reasonably request, and review, thereafter, with the Bank issues related to the execution of the Project.

5. Not later than June 30, 1996, a mid-term review shall be carried out by the Borrower and the Bank, in order to evaluate and assess, inter alia:

a) the overall progress of Project implementation;

b) the adequacy of the Borrower's counterpart fundings; and

c) the results of recommendations of completed studies and the ongoing technical assistance and training programs.

6. The Borrower shall retain the auditors, acceptable to the Bank, to review the accounting systems and supporting internal procedures and practices for the Special and Project accounts and statement of expenditures, and recommend any needed changes which shall be implemented by the Borrower after Bank agreement not later than November 30, 1994.

SCHEDULE 6

SPECIAL ACCOUNT

1. For the purposes of this Schedule:

a) the term «eligible Categories» means Categories (1), (2), (3) and (4) set forth in the table in paragraph 1 of Schedule 1 to this Agreement;

b) the term «eligible expenditures» means expenditures in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Loan allocated from time to time to the eligible Categories in accordance with the provisions of Schedule 1 to this Agreement; and

c) the term «Authorized Allocation» means an amount equivalent to 5,000,000 USD to be withdrawn from the Loan Account and deposited in the Special Account pursuant to paragraph 3 (a) of this Schedule.

2. Payments out of the Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule.

3. After the Bank has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Special Account shall be made as follows:

a) For withdrawals of the Authorized Allocation, the Borrower shall furnish to the Bank a request or requests for a deposit or deposits which do not exceed the aggregate amount of the Authorized Allocation. On the basis of such request or requests, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and deposit in the Special Account such amount or amounts as the Borrower shall have requested.

b) (i) For replenishment of the Special Account, the Borrower shall furnish to the Bank requests for deposits into the Special Account at such intervals as the Bank shall specify.

ii) Prior to or at the time of each such request, the Borrower shall furnish.to the Bank the documents and other evidence required pursuant to paragraph 4 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and deposit into the 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 the Special Account for eligible expenditures.

All such deposits shall be withdrawn by the Bank from the Loan Account under the respective eligible Categories, and in the respective equivalent amounts, as shall have been justified by said documents and other evidence.

4. For each payment made by the Borrower out of the Special Account, the Borrower 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.

5. Notwithstanding the provisions of paragraph 3 of this Schedule, the Bank shall not be required to make further deposits into the Special Account:

a) if, at any time, the Bank shall have determined that all further withdrawals should be made by the Borrower directly from the Loan Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or

b) once the total unwithdrawn amount of the Loan allocated to the eligible Categories, less the amount of any outstanding special commitment entered into by the Bank pursuant to Section 5.02 of the General Conditions with respect to the Project, shall equal the equivalent of twice the amount of the Authorized Allocation.

Thereafter, withdrawal from the Loan Account of the remaining unwithdrawn amount of the Loan allocated to the eligible Categories shall follow such procedures as the Bank shall specify by notice to the Borrower. 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 Special Account as of the date of such notice will be utilized in making payments for eligible expenditures.

6. a) If the Bank shall have determined at any time that any payment out of the Special Account:

i) was made for an expenditure or in an amount not eligible pursuant to paragraph 2 of this Schedule; or

ii) was not justified by the evidence furnished to the Bank, the Borrower shall, promptly upon notice from the Bank:

A) provide such additional evidence as the Bank may request; or

B) deposit into the Special Account (or, if the Bank shall so request, refund to the Bank) an amount equal to the amount of such payment or the portion thereof not so eligible or justified.

Unless the Bank shall otherwise agree, no further deposit by the Bank into the 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 Bank shall have determined at any time that any amount outstanding in the Special Account will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the Bank, refund to the Bank such outstanding amount.

c) The Borrower may, upon notice to the Bank, refund to the Bank all or any portion of the funds on deposit in the Special Account.

d) Refunds to the Bank made pursuant to paragraphs 6 (a), (b) and (c) of this Schedule shall be credited to the Loan Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions.

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