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December 22, 2000
His Excellency Keat Chhon
Minister of Economy and Finance
Ministry of Economy and Finance
Phnom Penh
Kingdom of Cambodia
Re: 
Cambodia: Global Environment Facility (GEF)
Grant for Preparation of Renewable Energy Development Project
(Bank Executed Component)
GEF-PPG No. TF024867
Your Excellency:
I am writing on behalf of the International Bank for Reconstruction and 
Development acting as an Implementing Agency of the GEF (the Bank) to indicate the 
Bank’s agreement to make a Grant in an amount not exceeding US Dollars ($ 255,000) to 
Kingdom of Cambodia (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.
The provision of the Grant does not constitute or imply any commitment on the 
part of the Bank as a GEF Implementing Agency, or in its own capacity, or the 
International Development Association, to assist in the financing of the 
aforementioned project.
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.  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 countersignature.
Very truly yours,
INTERNATIONAL BANK FOR 
   RECONSTRUCTION AND DEVELOPMENT
acting as an Implementing Agency  
of the Global Environment Facility
By /s/ Zafar Ahmed
Acting Country Director, Cambodia
East Asia and Pacific Region 
AGREED:
THE KINGDOM OF CAMBODIA
By /s/ Keat Chhon
Sr. Minister, Minister of Economy and Finance 
Date:
February 06, 2001
Annex
Purpose, Terms and Conditions of the Grant
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1.
The purpose and activities to be financed by the Grant (the Activities) are as 
follows:
The purpose of the Grant is to assist in the preparation of a proposed Renewable 
Energy Development Project (the Project), the main objectives of which are (a) to 
initiate the process of elimination of barriers to the development of renewable energy 
in Cambodia, and (b) to realize the contribution that electricity access expansion can 
make towards rural transformation. The activities (the Activities) for which the Grant 
is given are as follows:
Pipeline development for micro and small hydropower mini grids. 
Provision of technical advisory services: (a) to conduct a detailed 
pre-feasibility study of 5-10 sites, using the desk studies done by the Recipient’s 
Ministry of Industry, Mines and Energy (MIME) on potential sites for micro and mini 
hydropower plants; and (b) to provide an institutional analysis of the roles of 
different players, and identify the scope and conditions for a proposed International 
Development Association (IDA) credit. 
Market study. 
Development of a framework for market research for pipeline development of solar 
PV electricity investments and a controlled test-marketing, and establishment of a 
pipeline of at least three investment projects, involving community based solar 
electricity, to be implemented by the private sector.
Development of framework for integration of renewable energy in regulation and 
agreements. 
Provision of technical advisory services to develop an integrated framework 
governing renewable energy and, in so doing, strengthen the policy and regulatory 
environment for independent renewable energy producers. 
Project preparation. 
Provision of technical advisory services to support preparation of the Project 
for submission to GEF Council and the Bank for approval, including: assistance in 
project design, preparation of project documents, catalyzing private sector interest, 
liaising with commercial banks and micro-finance institutions, conducting incremental 
cost analysis, and dissemination of core information through internet.
2.
The Bank shall utilize the Grant to finance the following expenditures in 
connection with the services of individual consultants or any consulting firm engaged 
to assist in carrying out the Activities (the Consultants):
(a)
remuneration, per diem and other allowances;
(b)
travel expenses; and 
(c)
out-of-pocket expenses, including communications and reports, incurred by 
the Consultants.
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 December 31, 2001.  
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, Cambodia on the Consultants or any of the  consultants’ personnel 
(other than nationals or permanent residents thereof) in connection with the 
Activities.
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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 to make 
withdrawals under any development credit agreement with the International Development 
Association (IDA) 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 Agreement.
Collaboration between the Recipient and the Bank
9.
The Recipient shall make available to the Consultants, free of charge, such 
counterpart personnel to be selected by the Recipient, with the advice of the Bank and 
the Consultants as are set forth below.  If any member of the counterpart personnel 
fails to perform adequately any work assigned to him by the Consultants that is 
consistent with the position occupied by such member, the Consultants may request the 
replacement of such member, and the Recipient shall not unreasonably refuse to act 
upon such request:
1.
Senior small hydro power specialist
2.
Rural electrification specialist
3.
Senior specialist in electricity law and regulation
4.
Senior renewable energy project coordinator
5.
Senior project advisor
6.
Senior project advisor
10.
For the purposes of carrying out the Activities financed by the Grant, the 
Recipient shall make available to the Consultants, free of charge, the data, services, 
facilities and equipment set out below:
-
hydro potential feasibility studies, maps and databases
-
market surveys in the rural areas
-
list of consumers with existing solar project
-
latest versions of electricity law, regulations and agreements
-
latest versions of business and consumer protection laws.
11.
The Recipient and the Bank shall, from time to time, at the request of either 
party, exchange views on the Activities, any reports prepared by the Consultants and 
the implementation of any recommendations or conclusions of those reports.  The Bank 
may use any such reports for any purpose the Bank considers appropriate but such 
reports shall not be made public except by agreement between the Recipient and the 
Bank.
Attachment
Consultants' Services
1.    Consultants' services shall be procured in accordance with the relevant 
provisions of Statement 15.00 of the Bank's Administrative Manual, dated November 2000 
(the Administrative Manual), the Introduction and Section IV of the "Guidelines: 
Selection and Employment of Consultants by World Bank Borrowers" published by the Bank 
in January 1997 and revised in September 1997 and January 1999 (the Consultant 
Guidelines) and the following provisions of this Attachment.
2.  Services for the Market study, Development of framework for integration of 
renewable energy in regulation and agreements and project preparation shall be 
procured under contracts awarded in accordance with the provisions, which are 
consistent with the provisions of the Administrative Manual, of paragraphs 3.1 and 3.7 
of the Consultant Guidelines (Selection Based on Consultants' Qualifications).
3.  Services for Pipeline development for micro and small hydropower mini grids  may 
be procured on a single-source basis, as permitted under paragraphs 3.8 through 3.11 
of the Consultant Guidelines.
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