OFFICIAL CREDIT NUMBER 1785 CRG Development Credit Agreement (Fourth Caribbean Development Bank - Regional Vocational and Technical Education Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and CARIBBEAN DEVELOPMENT BANK Dated , 1987 CREDIT NUMBER 1785 CRG DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated 4 , 1987, between INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and CARIBBEAN DEVELOPMENT BANK (the Borrower), a regional development public organization established as a bank and operating under an Agreement entered into at Kingston, Jamaica, on October 1969 by the Governments of the several States and Territories which were signatories thereto. WHEREAS (A) Each Eligible Country, as the term is defined in paragraph (b) of Section 1.02 of this Agreement, and the Borrower, having satisfied themselves as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, have requested the Association to assist in the financing of the Project; (B) the Project will be carried out by the Borrower with the participation, including financial assistance, of the Eligible Countries, and is aimed at fostering the cooperation and regional efforts in the education sector by the member countries of the Organization of Eastern Caribbean States (tie Organiza- tion); (C) for the carrying out of the Project, the Borrower will make available to each Eligible Country a portion of the proceeds of the Credit, all as provided in this Agreement; and (D) the OPEC Fund, as the term is defined in paragraph (f) of Section 1.02 of this Agreement will further assist each Eligible Country in financing the Project; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "Generai Conditions Applicable to Develop- ment Credit Agreements" of the Association, dated January 1, 1985, with the modifications set forth in Schedule 5 to this Agreement (the General Conditions) constitute an integral part of this Agreement. -2- 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) "Organization" means the Organization of Eastern Caribbean States as established by virtue of the Treaty entered into in Basseterre, St. Christopher, on June 18, 1981 by the Governments of the following States and Territory: Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, and Montserrat; (b) "Eligible Country" means any state that, on the Effective Date, or on a later date as determined by the Association, is a member of the Organization and, as a member of the Association, is listed in Schedule 6 to this Agreement, as such schedule may be amended from time to time by the Association; (c) "Government" means the government of an Eligible Country; provided, however, that, if the context so requires for purposes of this Agreement (including the General Conditions), the term includes the Government of any country that at one point in time was an Eligible Country even if it later ceased to be so; (d) "Sub-project" means a specific development project consisting of activities aimed at enhancing education services in one of the Eligible Countries, to be carried out by the Government of the Eligible Country in question, utilizing the proceeds of a Sub-loan, and which is described in Part B of the Project; "Dominica Sub-project" means the Sub-project described in Part B.1 of the Project; "Grenada Sub-project" means the Sub-project described in Part B.2 of the Project; "St. Kitts and Nevis Sub-project" means the Sub-project described in Part B.3 of the Project; "St. Lucia Sub-project" means the Sub-project described in Part B.4 of the Project; and "St. Vincent and the Grenadines Sub-project" means the Sub-project described in Part B.5 of the Project; (e) "Sub-loan" means a loan made or proposed to be made out of the proceeds of the Credit by the Borrower to a Government for the financing of: (i) a Sub-project to be carried out by such Government; and (ii) such Government's Share, as the term is defined below; "Sub-loan Agreement" means the contractual arrangement entered into between an Eligible Country and CDB pursuant to Section 3.01 (b) (v) of this Agremeent providing, inter alia, for the terms and conditions under which a Sub-loan is to be made; and "Government's Share" means the portion or portions to be shared by each Government of the cost of expenditures under Part A of the Project to be financed with the proceeds of the Credit allocated from time to time to Category (4) of the table set forth in paragraph 1 of Schedule 1 to this Agreement, as the method or methods for such apportion- ment are stipulated from time to time under the corresponding Sub-loan Agreement; (f) "OPEC Fund" means the OPEC Fund for International Development established by the States Members of the Organization of Petroleum Exporting Countries by virtue of the Agreement signed in Paris on January 28, 1976, as amended; (g) "Prior Credit", "Special Action Credit" and "Preceding Credit" mean, respectively, the credits provided under: (i) a Development Credit Agreement between the Association and the Borrower dated January 9, 1980; (ii) a special action credit agreement between the Association, as Administrator of the Special Account established with funds contributed by members of the European Economic Community, and the Borrower, dated January 9, 1980; and (iii) a development credit agreement between the Association and the Borrower dated May 27, 1983; (h) "Charter" mea,is the Agreement of October 18, 1969 establishing the Borrower, referred to in the Preamble to this Agreement, as amended to the date of this Agreement; (i) "Statement of Policy" means the statement of lending and investments policy approved by the Directors of the Borrower on December 18, 1970, as modified from time to time in compliance with the provisions of the Agreements referred to in paragraph (g) above of this Section; (j) "Policies and Procedures Manual" means the Borrower's manual of policies and procedures dated September 1977, as modi- fied from time to time in compliance with the provisions of the Agreement referred to in paragraph (g) above; (k) "Foreign currency", for the purposes of any Sub-pro- ject, means any currency other than the currency of an Eligible Country; -4- (1) "Special Account" means the account to be established by the Borrower pursuant to paragraph (b) of Section 2.02 of this Agreement; "Dominica Sub-account", "Grenada Sub-account", "St. Kitts and Nevis Sub-account", "St. Lucia Sub-account", "St. Vincent and the Grenadines Sub-account" and "Project Implementation Team Sub-account" means each of the Sub-accounts of the Special Account to be opened pursuant to such paragraph and Section in respect of each of the Sub-projects described in Parts B.1, 2, 3, 4 and 5 of the Project, and in respect of Part A of the Project, respectively, and "Sub-account" means unless the content indicates otherwise, any one of the aforesaid sub-accounts; and (m) "Project Implementation Team" means the team esta- blished by the Borrower for purposes of Part A of the Project as referred to in the Borrower's paper BD/187, the head of which team will report directly to the Senior Manager of the Borrower's Project Services Division. ARTICLE II The Credit Section 2.01. (a) The Association agrees to lend to the Borrower, on the terms and conditions in the Development Cre6it Agreement set forth or referred to, an amount in various cur- rencies equivalent to four million eight hundred thousand Special Drawing Rights (SDR 4,800,000). (b) The Credit shall be part of the special funds resources of the Borrower, as defined in Article 9 (3) of the Charter and, consequently, shall be funnelled through a special fund, other than special funds established by the Borrower for purposes of the Prior Credit, the Special Action Credit and the Preceeding Credit, to be established for the purposes of carrying out the Project. Except insofar as this Agreement requires otherwise, the utilization of the Credit shall be governed by the provisions of the Charter prescribing how slich special funds resources shall be utilized. Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement for amounts paid (or, if the Association shall so agree, amounts to be paid) by the Borrower, - 5 - on behalf of one or more Governments, or directly by a Govern- ment, both on account of withdrawals made by such Government or Governments under a Sub-Loan or Sub-loans to meet the reasonable cost of goods and services requized for the Project in respect of which the withdrawal from the Credit Account is requested. (b) The Borrower shall, for the purposes of the Project, open and maintain in dollars a special account in a bank accept- able to the Association on terms and conditions satisfactory to the Association. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 4 to this Agreement. The Special Account shall have 6 sub-accounts, one each for the Dominica Sub-project, the Grenada Sub-project, the St. Christopher and Nevis Sub-project, the Saint Lucia Sub-project and the St. Vincent and the Grenadines Sub-project respectively, and one more for Part A of the Project. Section 2.03. The Closing Date shall be December 31, 1993 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 s&hall pay to the Association a commitment charge at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of the Credit not with- drawn from time to time. The commitment charge shall accrue from the Effective Date or, if so determined by the Association, from December 3, 1987, whichever is earlier, to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or shall be cancelled; provided, however, that, the commitment charge shall not accrue before a date sixty days after the date of this Agreement. (b) 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, any Government or in the territory where the Borrower is located; 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 ,ursuant to the provisions of that Section. -6 - Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (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 March 15 and September 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each March 15 and September 15 commencing September 15, 1997, and ending March 15, 2037. Each installment to and including the installment payable on March 15, 2007 shall be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter shall be one and one-half per cent (1-1/2%) of such principal amount. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.09. Except as the Association shall otherwise agree, the Borrower shall not utilize, or permit the utilization of, the proceeds of the Credit to co-finance projects financed by the proceeds of any other loan or credit made or extended by the Bank or the Association. 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 and conduct its operations and affairs with due diligence and efficiency and in conformity with appropriate administrative and financial practices, with qualified management and personnel and in accordance with the procedures described in the Policies and Procedures Manual. The Borrower shall provide each Government, promptly as needed and in accordance with the terms agreed therewith, the funds, services and other resources for the Project committed by the Borrower to the Government in question pursuant to sub-paragraphs (iv), (v) and (vi) of paragraph (b) below. -7- (b) The Borrower shall enter with each of the Governments into contractual arrangements by means of which the Borrower shall cause each of the Governments to take such action on such Government's part as shall be necessary or convenient to enable the Borrower to carry out the Project including, without limita- tion: (i) to provide, promptly as needed, the funds, facilities, services and other resources required from each Government for the carrying out of the Project; (ii) to provide, without limita- tion to such Government's obligations pursuant to (i) above, all resources required for (A) the execution of the corresponding Sub-project, and (B) covering such Government's Share, such resources to include, but not to be limited to, the proceeds of the loans made to such Governments for the Project by the OPEC Fund pursuant to (iii) below, by the Borrower, out of its own resources, pursuant to (iv) below, and by the Borrower, out of the proceeds of the Credit, pursuant to (v) below; (iii) to enter with the OPEC Fund into contractual arrangements for the borrowing therefrom and utilization for purposes of financing civil works under the Project, of freely convertible funds that will amount to not less than the equivalent of $500,000, in the case of Dominica, the equivalent of $500,000, in the case of Grenada, the equivalent of $500,000 in the case of St. Kitts and Nevis, the equivalent of $500,000, in the case of Saint Lucia, and the equivalent of $500,000, in the case of Saint Vincent and the Grenadines; (iv) to borrow from the Borrower, and utilize for purposes of the Project, freely convertible funds that will amount, to not less than the equivalent of $430,000, in the case of Dominica, $347,000, in the case of Grenada, $352,000 in the case of St. Kitts and Nevis, $876,000,in the case of Saint Lucia, and $795,000 in the case of Saint Vincent and the Grenadines; (v) to borrow from the Borrower in terms satisfactory to the Association including those stipulated under Section 3.02 of this Agreement, and to utilize for purposes of the Project, the pro- ceeds of the Credit allocated from time to time to the Government in question in the corresponding Category of the table set forth in paragraph 1 of Schedule 1 to this Agreement (including a portion of the proceeds allocated to Category (4) of such table equal to the applicable Government's Share), as such table and Schedule may be changed from time to time pursuant to the pro- visions of this Agreement, or by further agreement between the Association and the Borrower, acting on its own behalf or on behalf of the applicable Government or Governments; (vi) to appoint the Borrower as agent of the Government in question, on terms and conditions that shall be substantially similar for every Government and adequate to enable the Borrower to comply -8- with its obligations under paragraph (a) of this Section, both for purposes of hiring consultant services on behalf of each of the Governments in order to assist the Project Implementation Team in performing its tasks under Part A of the Project and for acquiring, also on behalf of each of the Governments, the goods required for the execution of the corresponding Sub-project; and (vii) to execute the corresponding Sub-project with due diligence and efficiency and in accordOance with appropriate practices and to procure all goods, works and consultants' services required for the Project and to be financed totally or partially out of the proceeds of the Credit relent to the corresponding Government pursuant to sub-paragaraph (v) of this paragraph, in accordance with the provisions of Schedule 3 to this Agreement. (c) The Borrower shall exercise its rights in relation to each of the contractual arrangements referred to in paragraph (b) of this Section in such manner as to: (i) protect the interests of the Association and the Borrower; (ii) comply with its obliga- tions under this Agreement; and (iii) achieve the objectives of the Project. To that end, the Borrower shall not amend, abrogate or waive any substantive provision of such contractual arrange- ments concerning the matters referred to in paragraph (b) of this Section or any provision thereof concerning the payment of prin- cipal of, and service charge or other charges on, any Sub-loan, without the Association's concurrence and shall cause each of the Governments not to amend, abrogate or waive any provision of such Government's contract with the OPEC Fund entered into for pur- poses of the Project pursuant to paragraph (b) (iii) of this Section, without the Borrower's concurrence. Section 3.02. For the purpose of carrying out the Project, the Borrower shall relend to each Government the proceeds of the Credit allocated from time to time to the corresponding Eligible Country under the provisions of Schedule 1 to this Agreement, and such Government's Share of the proceeds of the Credit allocated to Category (4) of the table set forth in paragraph 1 of such Schedule. Such relending shall be made under Sub-loans which shall be denominated in SDR determined as of the respective dates of withdrawal from the Credit Account and repayable in amounts equivalent to the value of the currency or currencies withdrawn from the Credit Account for the purpose, expressed in terms of SDR determined as of the date, or the respective dates, of repay- ment. The grace period shall be approximately ten years and the repayment term shall be approximately fifty years for each Sub-loan; provided, however, that neither the grace period nor -9- the last matutity under any Sub-loan shall extend beyond a date 15 days earlier than the first payment date set forth in Section 2.07 or a date 15 days earlier than the last payment date set forth in Section 2.07, respectively. Repayment of a Sub-loan by the Government in question shall be in installments: (i) pay- able not more frequently than quarterly or not less frequently than semiannually; (ii) equivalent, in their semiannual aggre- gate, to one-half of one per cent (1/2 of 1%) of the principal amount relent under the Sub-loan in question and outstanding during the first ten years of the repayment period thereof; and (iii) equivalent, also in their semiannual aggregate, to one and one-half per cent (1-1/2%) of such principal amount outstanding during the remainder of such period. The Government in question shall pay to the Borrower a service charge at the rate of three- fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Sub-loan withdrawn and outstanding from time to time and a commitment charge on the same terms and conditions of the commitment charge payable by the Borrower to the Association as set forth in Section 2.04 of this Agreement on the principal amount of the Sub-loan not withdrawn from time to time. All pay- ments under a Sub-loan shall be made, in the currency specified in Section 2.08 of this Agreement or in such other eligible cur- rency or currencies as may from time to time be designated or selected pursuant to Section 4.02 of the General Conditions and, either semiannually or quarterly, on dates thirty days, and thirty and one hundred and twenty days, respectively, before each of the dates set forth in Section 2.06 of this Agreement. Section 3.03. It shall be a condition in all contracts or agreements for Sub-loans that the Government agree that the rights of the Borrower under such contracts or agreements shall be assigned by the Borrower to the Association. Section 3.04. The Borrower shall duly perform all its obli- gations under agreements under which funds have been lent or otherwise put at the disposal of the Borrower for relending, investment or management. The Borrower shall promptly inform the Association of any action which would have the effect of assign- ing, or of amending, abrogating or waiving any material provision of, any such agreement. Section 3.05. (r) The Borrower shall: (i) maintain the Project Implementation Team until the Closing Date or, if the Borrower's right to mixake withdrawals from the Credit Account has - 10 - not been terminated on or before the Closing Date, until a later date to be determined by the Association; (ii) ensure at all times the ability of the Project Implementation Team to perform the tasks described under Part A of the Project; (iii) maintain a member of the Borrower's staff as head of the Project Imple- mentation Team (the Project Coordinator) and provide the Project Coordinator with such resources as shall be necessary to enable the Project Coordinator to perform the functions of such posi- tion; and (iv) provide the Project Implementation Team with the services of the consultants hired by the Borrower, on behalf of the Eligible Countries for purposes of Part A of the Project, and ensure that such consultants report directly to the Project Coordinator. (b) The Borrower shall provide the Project Implementation Team with the facilities and staff, including support staff, required for the performance of the functions described in Part A of the Project, particularly Part A.2 (b) of the Project, and shall not replace the Project Coordinator or the Senior Manager of the Borrower's Services Division, without providing the Association a reasonable opportunity to express its views on the qualifications and experience of the person proposed for any such replacement. (c) The Borrower shall, on behalf of the Eligible Countries, hire the person referred to in Section 6.01 (c) (i) of this Agreement within thirty (30) days from the Effective Date, and the remainder of the consultants whose services are required for carrying out Part A of the Project, within 150 days from the Effective Date. Section 3.06. Wherever the Borrower shall request any change in the allocation of Credit proceeds in respect of the table set forth in paragraph 1 of Schedule 1 to this Agreement, or in the distribution of the Authorized Allocation, as defined in para- graph 1 (c) of Schedule 4 to this Agreement, it shall be deemed, subject to the proviso to Section 5.04 to the General Conditions, that the Borrower is acting under a valid power of attorney conferred by the Eligible Country or Countries in question. Section 3.07. The Borrower shall ensure that, by a date not later than one year after the E'fective Date, the education finance consultant or consultants to be hireu by Lhe Borrower for purposes of Part A.1 (c) of the Project have completed a report on their findings and recommendations for purposes of that Part - 11 - of the Project and furnished such report, for comments, to the Borrower, IDA and the Sub-project Manager in each Eligible Country. Section 3.08. Without limiting the generality of the provisions of Section 9.01 of the General Conditions, the Borrower and the Association shall, on or about September 30, 1990 undertake a joint interim assessment of the performance of each Eligible Country in respect of the implementation of the corresponding Sub-project with a view to making recommendations for corrective actions, if warranted. The Borrower shall take all such action on its part so as to ensure the input of the Board referred in Part A.3 of the Project, if established by then, in the preparation of the aforesaid report. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained separate accounts, including separate accounts for each Sub-loan, and records adequate to monitor and record the progress of the Project and of each Sub-project (including its cost and the benefits to be derived from it) and to reflect in accordance with consistently maintained appropriate accounting practices the operations and financial condition of the Borrower and of the special fund to be established pursuant to Section 2.01 (b) of this Agreement. (b) The Borrower shall: (i) have the accounts referred to in paragraphs (a) and (c) of this Section and the Special Account, and its financial statements (balance sheets, statements of income and expenses and related statements), for each fiscal year audited, in accordance with appropriate auditing principles 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 its aforesaid accounts and financial statements for such year as so audited; and (B) a certified copy of the report of such audit by such 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 the said records, accounts, financial statements and the audit thereof as the Association shall from time to time reasonably request. - 12 - (c) For all expenditures with respect to which withdrawals from the Credit 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 or cause to be retained, until at least one year after the completion of the audit 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; and (iii) 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 sub- mitted 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. The Borrower shall not make any repayment in advance of maturity in respect of any outstanding debt of the Borrower which, in the judgment of the Association, would mate- rially affect the Borrower's ability to meet its financial obligations. Section 4.03. The Borrower shall take such steps satisfac- tory to the Association as shall be necessary to protect itself against risk of loss resulting from changes in the rates of exchange between the currencies used in its lending and borrowing operations. Section 4.04. The Association and the Borrower shall from time to time, at the request of either party, exchange views through their representatives with regard to the administration, operation and financial condition of the Borrower and any sub- sidiary, and the Borrower shall furnish to the Association all such information as the Association shall reasonably request concerning such administration, operations and financial condition. - 13 - Section 4.05. The Borrower shall enable the Association's representatives to inspect the records referred to in Section 4.01 of this Agreement and any relevant documents. ARTICLE V Remedies of the Association Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) any part of the principal amount of any loan to the Borrower having an original maturity of one year or more shall, in accordance with its terms, have become due and payable in advance of maturity as provided in the relative contractual instruments, or any security for any such loan shall have become enforceable; (b) a change shall have been made in the Charter or the Statement of Policy or the Policies and Procedures Manual which would materially and adversely affect the operations or the financial condition of the Borrower; (c) a resolution shall have been passed for the dissolution or liquidation of the Borrower or of the fund to be established pursuant to Section 2.01 (b) of this Agreement; (d) (i) the Bank or the Association shall have suspended in whole or in part the right of any Government to make withdrawals in respect of any loan made by the Bank to, or with the guarantee of, the corresponding Eligible Country, or under any development credit agreement between such Government and the Association, respectively, or (ii) the Borrower shall have suspended in whole or in part the right of any Government to make withdrawals under any loan agreement between such Government and the Borrower, or (iii) any Government shall have failed to make payment of principal, interest, service charge or any another amount due to the Borrower, or to the Association as assignee thereof, under a Sub-loan, or (iv) any Government shall have failed to make any payment due to the Bank in consequence of any guarantee or other financial obligation of any kind extended by the Bank to any third party with the agreement of such Government; provided, however, that any suspension of the right of the Borrower to make - 14 - withdrawals from the Credit Account based on this paragraph shall be limited to that part of the Credit intended to be used to finance one or more Sub-loans to the Government or Governments in question; (e) a subsidiary or any other entity shall have been creat- ed or acquired or taken over by the Borrower, if such creation, acquisition or taking over would adversely affect the conduct of the Borrower's business or the Borrower's financial situation or the efficiency of the Borrower's management and personnel or the carrying out of the Project; (f) (i) Subject to subparagraph (ii) of this paragraph: (A) The right of an Eligible Country to withdraw the proceeds of any loan made to it by the OPEC Fund for the financing of the Project shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing therefor, or (B) any such loan or any loan made by the Borrower to a Government for purposes of the Project shall have become due and payable prior to the agreed maturity thereof. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Association that: (A) such suspension, cancellation, termination or prematuring is not caused by the failure of the Eligible Country or Government in question, or the Borrower to perform any of its obligations under or related to such agreement; and (B) adequate funds for the Project are available to the Eligible Country or Government in question from other sources on terms and conditions satisfactory to the Association and the Borrower and provided, fur- ther, that Sub-paragraph (i) (A) of this paragraph shall apply only in respect of that part of the Credit intended to be used to finance one or more Sub-loans to the Government or Governments in question; and - 15 - (g) that any Government shall have agreed to replace the Borrower as loan administrator in respect of any of the loans referred to in paragraph (f) (i) (A) of this Section without the Association's concurrence; provided, however, that this paragraph shall apply only in the limited fashion stipulated in paragraph (f) (ii) in fine of this Section. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (d) thereof: (a) any event specified in paragraph (a) or (b) or (c) of Section 5.01 of this Agreement shall occur; (b) any event specified in paragraph (e) of Section 5.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower; (c) a default shall occur in the performance of any obliga- tion consisting of paying monies on the part of a.iy Government under any Sub-loan Agreement; and (d) any event specified in paragraph (f)(i)(B) of Section 6.01 of this Agreement shall occur, subject to the proviso of paragraph (f) (ii) of that Section. ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as addi- tional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) that the contractual arrangements: (i) stipulated under Section 3.01 (b) of this Agreement between the Borrower and at least each of three Eligible Countries, and (ii) referred to in Section 3.01 (b) (iii) of this Agreement, between each of the same three Eligible Countries and the OPEC Fund, have been entered into in form and substance satisfactory to the Association, and that the Association has received evidence, satisfactory to the Association, that the execution thereof on behalf of the Borrower and the Government in question have been - 16 - duly authorized or ratified by all necessary corporate and Governmental action, respectively, and that all conditions, if any, other than the effectiveness of this Agreement and precedent to the initial disbursement for the Project thereunder, or to the effectiveness thereof, as the case may be, have been fulfilled; (b) that the Association has received an instrument in form and substance satisfactory to the Association, whereby the Bor- rower assigns to the Association the Borrrower's rights under each of the Sub-loan Agreements with three Governments referred to in paragraph (a) of this Section subject to and in accordance with the provisions of the Assignment Agreement of even date herewith between the Association and the Borrower; and (c) that: (i) the person that will provide the services required for purposes of Part A.1 (a) of the Project has been selected by the Borrower and approved by the Sub-project Manager in each Eligible Country; and (ii) the person that will provide the services for purposes of Part A.2 (b) of the Project has been appointed by the Borrower in form and substance satisfactory to the Association. Section 6.02. The following are specified as additional matters, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished tu the Association, namely, that the Borrower shall have received on behalf of each applicable Government an opinion satisfactory to the Association showing that the corresponding Sub-loan Agreement with such Government has been duly authorized or ratified by such Government and is legally binding upon such Government in accordance with its terms. Section 6.03. The date of September 30, 1987, is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VII Addresses Section 7.01. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: - 17 - For the Borrower: Caribbean Development Bank P.O. Box 408 Wildey St. Michael Barbados, W.I. Cable address: Telex: CARIBANK WB2287 Barbados For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (wUI) - 18 - 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. INTERNATIONAL DEVELOPMENT ASSOCIATION By A Regional Vice President Latin America and the Caribbean CARIBBEAN DEVELOPMENT BANK By/j/ Authorized Representative - 19 - SCHEDULE 1 Withdrawal of the Proceeds of the Credit 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) Civil works: (a) Dominica 60,000 14% Sub-project (b) Grenada 70,000 16% Sub-project (c) St. Kitts and 370,000 52% Nevis Sub- project (d) Saint Lucia 1,030,000 75% Sub-project (e) Saint Vincent 720,000 67% and the Grenadines Sub-project (2) Fellowships: 100% of foreign expenditures (a) Dominica 130,000 Sub-project (b) Grenada 120,000 Sub-project - 20 - Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (c) St. Kitts and 90,000 Nevis Sub- project (d) Saint Lucia 120,000 Sub-project (e) Saint Vincent 120,000 and the Grenadines Sub-project (3) Unallocated: (a) Dominica 30,000 Sub-project (b) Grenada 30,000 Sub-project (c) St. Kitts and 70,000 Nevis Sub- project (d) Saint Lucia 170,000 Sub-project (e) Saint Vincent 110,000 Sub-project - 21 - Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (4) Consultants' ser- 100% vices for the Project Implementation Team and other expenditures (includ- ing expenditures for salaries but excluding expenditures for goods) of the Project Implementation Team 1,560,000 TOTAL 4,800,000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of an Eligible Country for goods or services supplied from the territory of any country other than that of an Eligible Country; and (b) the term "local expenditures" means expenditures in the currency of an Eligible Country or for goods or services supplied from the territory of an Eligible Country; provided, however, that if the currency of such Eligible Country 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. 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. - 22 - SCHEDULE 2 Description of the Project The objectives of the Project are: at the regional level: (i) to enhance coordination amongst countries within the Eastern Caribbean sub-region in vocational and technical education and matters directly related thereto, such as development of regional training programs, curricula standardization, common instruc- tional material, and testing and certification of proficiency; and, at the level of each Eligible Country: (ii) to upgrade quality and job relevance of vocational and technical education; (iii) to expand the training capacity for vocational and tech- nical education; (iv) to improve efficiency and effectiveness of the vocational-technical education system; and (v) to develop the capabilities for establishing and maintaining a labor market information system as a tool for determining manpower and training needs. The aforesaid notwithstanding, it is further recognized, as an objective of the Project, that the activities thereunder in pursuit of the aforesaid Eligible Country level objectives will be performed with a view to maximizing the regional impact of the Project. 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: 1. Establishment and operation of a unit (the Project Implementation Team) that will be located at the Borrower's premises and that will hire, on behalf of Eligible Countries, the services of the consultant services listed below. The Project Implementation Team will, inter alia, by means of the utiliza- tion of such services, undertake to facilitate for each Eligible Country the attainment of the following results: (a) Refinement of curricula, course syllabi and institu- tional management policies and procedures, and development of national and regional training board policies and procedures. These tasks will require about forty-eight (48) staff-months of vocational-technical education consultant services. (b) Establishment in the Ministry of Education or Labor, as the case may be, of each Eligible Country, of a labor market - 23 - information system for the preparation of labor market/job analysis studies and development of a system of intra-regional links for the sharing of such information. These tasks will require about twenty-four (24) staff-months of manpower specialist consultant services and the arrangement of meetings of representatives of each Eligible Country's labor market information system for the purpose of strengthening such intra-regional links. (c) (I) Determination of the feasibility of: (i) improving training efficiency by increasing class size where possible and by merging courses which are common to several training specializations and thus increasing the student-teacher ratio for such courses; (ii) establishing a system of student fees at the post-secondary level and student loans for those unable to pay said fees; (iii) establishing cost-savings and cost-recovery schemes through on-the-job training programs that would provide paid repair services rendered by the instructors and trainees; (iv) providing textbooks to students that would pay a user's fee therefor; and (v) other cost recovery schemes; and (II) putting into effect one or more of said schemes. These tasks will require about twelve (12) staff- months of education finance consultant services. 2. In addition to its activities under 1 above, the Project Implementation Team will: (a) Design and implement procurement procedures, including: (i) grouping of goods and preparation of bidding packages, and tendering thereof on behalf of Eligible Countries, so as to allow economies of scale stemming from bulk procurement of goods to be acquired under Part B of the Project while distributing the costs thereof among the Eligible Countries; and (ii) advise the - 24 - J 'llible Countries in matters pertaining to procurement of civil works contracts. These tasks will require about thirty-six (36) staff-months of procurement specialist consultant services. (b) Advise each Eligible Country on architectural design and school construction works, in respect of facilities included in Part B of the Project. This task will require about eighteen (18) staff-months of architect and/or construction engineer services. 3. Finally, the Project Implementation Team will also undertake a central role in preparatory works, including travel arrange- ments to and from, and meetings in, Saint Lucia, all leading to the establishment, within the framework of the Organization, of a Regional Training Board. The Board is expected to be responsible for developing and implementing cooperative efforts on region- wide needs such as course syllabi development, special :1n-service instructor training, improvement of institutional managers, seminars on effective and economical cost recovery techniques, skill training courses on a regional basis which would not be economically justified for an individual country to develop, such as diesel fuel injection mechanics, industrial electronics and commercial industrial electronics and commercial air conditioning and refrigeration, and other priority needs. Part B Within the framework of Part A of the Project, the activities described in each of the following sub-projects will be executed: 1. Dominica Sub-project (a) Limited renovation of the training facilities of Clifton Dupigney Technical College and of the vocational blocks of Goodwill and Portsmouth senior secondary schools and of Grand Bay, Castle Bruce, Portsmouth, Marigot Weir, St. Joseph and Goodwill junior secondary schools. (b) Acquisition and utilization of improved and updated equipment, including spare parts therefor as required, for all of the above facilities. - 25 - (c) A program of fellowship training in the Caribbean region for about ten (10) vocational education instructors (about ninety (90) staff-months) and eight (8) vocational education supervisors (about twenty-four (24) staff-months). (d) A program of internships abroad for about four (4) technical college instructors (about twelve (12) staff-months). (e) Establishment of a revolving stock of consumable supplies (including supplies for repair shops) for use in the facilities in (a) above as a pilot program for the testing and putting into effect of cost recovery schemes. 2. Grenada Sub-project (a) Limited renovation of the facilities of Grenada Technical and Vocational Institute and of the Domestic Art Institute, both at Tanteen, St. Georges. (b) Construction of a Multipurpose Training Center at La Fortune, in St. Patrick parish. (c) Acquisition and utilization of furniture and equipment (including spare parts therefor, as required) for the above facilities which, in the case of (a) above, will complement the furniture and equipment already existing. (d) A program of fellowship training in the Caribbean region for about sixteen (16) vocational education instructors (about one hundred forty-four (144) staff-months). (e) Establishment of a revolving stock of consumable supplies (including supplies for repair shops), for use in the facilities included in (a) and (b) above as a pilot program for the testing and putting into effect of cost recovery schemes. 3. St. Kitts and Nevis Sub-project (a) Construction of new classrooms and shops for two junior secondary school multipurpose training centers, one in St. Kitts and the other in Nevis. (b) Construction of a new Hotel Training Unit on the campus of the Technical College in St. Kitts. - 26 - (c) Acquisition and utilization of furniture and equipment, including spare parts therefor, as required, for the facilities to be constructed in (a) above and for the Technical College referred to in (b) above. (d) A program of fellowship training in the Caribbean region for about ten (10) vocational education instructors (about ninety (90) staff-months), 2 vocational education supervisors (about eight (8) staff-months) and a maintenance technician (about nine (9) staff-months). (e) Establishment of a revolving stock of consumable supplies (including supplies for repair shops), for use in the facilities included in (a) above and referred to in (b) above as a pilot program for the testing and putting into effect of cost recovery schemes. 4. St. Lucia Sub-project (a) Construction of new classrooms and laboratory/shop buildings for the Morne Fortune Technical College adjacent to others on space already owned by the College. (b) Construction of new classrooms and workshops and renovation of workshop space, all for the Vieux Fort Senior Secondary School. (c) Acquisition and utilization of furniture and equipment, including spare parts therefor, as required, for the new facilities referred to in (a) above and for the renovated facilities in (b) above. (d) A program of fellowship training in the Caribbean region for about nine (9) vocational education instructors and a maintenance technician (about ninety (90) staff-months), and a vocational education supervisor (about four (4) staff-months). (e) A program of internships abroad for about five (5) technical college instructors (about fifteen (15) staff-months). (f) Establishment of a revolving stock of consumable supplies (including supplies for repair shops), for use in the facilities referred to in (a) and (b) above as a pilot program for the testing and putting into effect of cost recovery schemes. - 27 - 5. St Vincent and the Grenadines Sub-project (a) Limited renovation of teaching facilities in the St. Vincent Technical College in Arnos Vale, the Girls Business School in Kingston, and Richmond Hill Home Economics Center. (b) Construction of two (2) new multipurpose training centers to be located in Carapan and Georgetown for serving rural secondary feeder schools. (c) Acquisition and utilization of furniture and equipment, including spare parts therefor, as required, for the above facilities which, in the case of (a) above, will complement the furniture and equipment already existing. (d) A program of fellowship training in the Caribbean Region for about twelve (12) vocational educational instructors (about one hundred eight (108) staff-months), five (5) vocational and/or technical educational supervisors (about twenty (20) staff-months) and two (2) equipment maintenance technicians (about eighteen (18) staff-months) who would service and maintain instructional equipment of all vocational and technical schools in the country. (e) Establishment of a revolving stock of consumable supplies (including supplies for repair shops), for use in the facilities referred to in (a) above and included in (b) above as a pilot program for the testing and putting into effect cost recovery schemes. T P * The Project is expected to be completed by June 30, 1993. - 28 - SCHEDULE 3 Procurement and Consultants' Services Section I. Procurement of Works Part A: International Competitive Bidding Except as provided in Part B hereof, 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 1985 (the Guidelines). Part B: Other Procurement Procedures Civil works in an Eligible Country may be procured under contracts awarded on the basis of competitive bidding, advertised locally in the Eligible Country in question, in accordance with procedures satisfactory to the Association. Part C: Review by the Association of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract for works estimated to cost the equivalent of $500,000 or more, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract 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 Association pursuant to said paragraph 2 (d) shall be furnished to the Association 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, such 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 Association pursuant to said paragraph 3 shall be furnished to the Association as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 4 to this Agreement. - 29 - (c) The provisions of the preceding subparagraphs (a) and (b) shall not apply to contracts on account of which the Associa- tion has authorized withdrawals from the Credit Account on the basis of statements of expenditure. Such contracts shall be retained in accordance with Section 4.01 (c) (ii) of this Agree- ment. 2. The figure of 20% is hereby specified for purposes of para- graph 4 of Appendix 1 to the Guidelines. Section II. Employment of Consultants In order to assist the Borrower in the carrying out of Part A of the Project, the Borrower shall employ consultants, as described under the Project, whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association 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 top ranked consultant or consulting firm selected in respect of each field of consul- tant services shall be submitted to the Eligible Countries for approval. The appointment of the consultant or consultants in question shall be conditioned to the aforesaid approval unless the Borrower considers that one or more of the Eligible Countries are unreasonably withholding its or their approval. The submis- sion to the Bank of an unqualified notice from the Borrower informing on the appointment of one or more consultants shall be deemed a representation by the Borrower that the Eligible Countries have approved the Borrower's selection of such consultant or consultants. - 30 - SCHEDULE 4 Special Account 1. For the purposes of this Schedule: (a) the term "eligible Category" means Category (4), or any of the Sub-categories of Categories (1) or (2), or all as set forth in the table in paragraph 1 of Schedule 1 to this Agreement (the Table); (b) the term "eligible expenditures" means expenditures in respect of the reasonable cost of goods and services required for the Dominica Sub-project, the Grenada Sub-project, the St. Kitts and Nevis Sub-project, the Saint Lucia Sub-project, the St. Vincent and the Grenadines Sub-projects or Part A of the Project and to be financed out of the proceeds of the Credit allocated from time to time to the corresponding eligible Categories in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount equivalent to SDR 480,000 to be withdrawn from the Credit Account and deposited in the Special Account pursuant to paragraph 3 (a) of this Schedule and to be distributed in the Sub-accounts as follows: SDR 50,000 in the Dominica Sub-account, SDR 50,000 in the Grenada sub-account, SDR 70,000 in the St. Kitts and Nevis Sub-account, SDR 110,000 in the St. Lucia Sub-account, SDR 100,000 in the St. Vincent and the Grenadines Sub-account, and SDR 100,000 in the Project Implementation Team Sub-account. The amounts so distributed may be redistributed or changed from time to time by agreement between the Association and the Bor- rower, the latter acting on behalf of the Eligible Country or Countries in question. 2. Except as the Association shall otherwise agree, payments out of the Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Association 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 may be made as follows: - 31 - (a) On the basis of a request or requests by the Borrower for a deposit or deposits which add up to the aggregate amount of the Authorized Allocation, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account for the corresponding Sub-account or Sub-accounts such amount or amounts as the Borrower shall have requested. (b) The Borrower shall furnish to the Association requests for replenishment of the Special Account at such intervals as the Association shall specify. On the basis of such requests, the Association shall withdraw from the Credit Account and deposit into the Special Account for the corresponding Sub-account or Sub-accounts such amounts as shall be required to replenish such Sub-account or Sub-accounts with amounts not exceeding the amount of payments made out of such Sub-account or Sub-accounts for eligible expenditures. All such deposits shall be withdrawn by the Association from the Credit Account under the respective eligible Categories, and in the respective equivalent amounts, as shall have been justified by the evidence supporting the request for such deposit furnished pursuant to paragraph 4 of this Schedule. 4. For each payment made by the Borrower out of the Special Account for which the Borrower requests replenishment pursuant to paragraph 3 (b) of this Schedule, the Borrower shall furnish to the Association, prior to or at the time of such request, such documents and other evidence as the Association shall reasonably request, showing that such payment was made for eligible expen- ditures. 5. (a) Notwithstanding the provisions of paragraph 3 of this Schedule, any further request for deposit into the Special Account may be denied by the Association when either of the following situations arises: (i) the Association shall have determined that all further withdrawals should be made by the Borrower directly from the Credit Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or (ii) the total unwithdrawn amount of the Credit allo- cated to the eligible Categories minus the amount of any outstanding special commitment entered into - 32 - in each case by the Association pursuant to Section 5.02 of the General Conditions for each Sub-project, and for Part A of the Project, as the case may be, shall be equal to the equivalent of twice the amount of the Authorized Allocation. (b) Thereafter, withdrawals from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to the eligible Categories shall follow such procedures as the Associa- tion shall specify by notice to the Borrower. Such further with- drawals shall be made only after and to the extent that the Association shall have been satisfied that all such amounts remaining on deposit in the corresponding Sub-account as of the date of such notice will be utilized in making payments for eligible expenditures. 6. (a) If the Association shall have determined at any time that any payment out of the Special Account: (i) was made for any expenditure or in any amount not eligible pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence furnished purl;uant to paragraph 4 of this Schedule, the Borrower shall, promptly upon notice from the Association deposit into the Special Account for the corresponding Sub-account or Sub-accounts (or, if the Association shall so request, refund to the Association) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. No further deposit by the Association into the Special Account shall be made until the Borrower has made such deposit or refund. (b) If the Association shall have determined at any time that any amount outstanding in the Special Account, or any of its Sub-accounts, will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount for crediting to the Credit Account for its immediate cancellation, or request to the Association the re-distribution of such amount, pursuant to paragraph 1 (c) of this Schedule, to other Sub-account or Sub-accounts. - 33 - SCHEDULE 5 Modifications of General Conditions For the purpose of this Agreement, the provisions of the General Conditions are modified as follows: 1. Section 1.01 is deleted and replaced by the following Section 1.01: "Section 1.01. Application of General Conditions. These General Conditions set forth certain terms and conditions generally applicable to development credits granted by the Association. They apply to any development credit agreement providing for any such development credit to the extent and subject to any modifications set forth in such agreement." 2. Paragraphs 5 and 9 of Section 2.01 are deleted and replaced by the following paragraphs 5 and 9: "5. "Borrower" means the party to the Development Credit Agreement to which the Credit is granted." "9. "Project" means the project or program for which the Credit is granted, as described in the Development Credit Agreement and as the description thereof may be amended from time to time by agreement between the Borrower and the Association, and other parties if so stipulated in the Development Credit Agreement." 3. The last sentence of Section 3.02 is deleted. 4. Paragraph (b) of Section 4.06 is deleted and replaced by the following paragraph: "(b) The principal of, and service charges on, the Credit shall be paid without restrictions of any kind imposed by any Government, or in the territory of any Eligible Country, or in the territory where the Borrower is located." - 34 - 5. The following proviso is added at the end of Section 5.04: "provided, however, that, the preceding provisions shall not apply to reallocations of Credit proceeds from Category (4) of the table set forth in Schedule 1 to the Development Credit Agreement to any other Category of such table without the express consent of all the Eligible Countries, or to reallocation of Credit proceeds from one Sub-project to another in Categories (1) to (3) of such table, in which case the acquiescence of the Eligible Countries concerned shall be sought by the Borrower and evidenced in a manner satisfactory to the Association." 6. Section 5.08 is deleted and replaced by the following Section 5.08: "Section 5.08. Treatment of Taxes. It is the policy of the Association that no proceeds of the Credit shall be withdrawn on account of payments for any taxes levied by, or in the territory of, any Eligible Country or in the territory where the Borrower is located, on goods or services, or on the importa- tion, manufacture, procurement or supply thereof. To that end, if the amount of any taxes levied on or in respect of any item to be financed out of the proceeds of the Credit decreases or increases, the Association may, by notice to the Borrower, increase or decrease the percentage for withdrawal set forth or referred to in respect of such item in the Development Credit Agreement as required to be consistent with such policy of the Association." 7. Section 5.09. is deleted and replaced by the following Section 5.09: "Section 5.09. Payment by the Association. The Association shall pay the amounts withdrawn by the Borrower from the Credit Account only to or on the order of the Borrower, or with the prior and specific written request of the Borrower, to or on the order of a Government agency; provided, however, that any request of the Borrower that such amounts be paid to or on the order of a Government agency shall be deemed also a representation made by the Borrower to the - 35 - Association that: (i) the Borrower has received, and has agreed to, a specific written request from an authorized representative of the Government in question to the effect that such amounts be paid to or on the order of the Governments agency in question; and (ii) that the Borrower is satisfied that the payment in question is made in direct connection with expenditures for the Project eligible for financing under the Credit." 8. Paragraph (a) of Section 6.02 is deleted and replaced by the following paragraph (a): "(a) The Borrower shall have failed to make payment (notwithstanding the fact that such payment may have been made by a third party) of principal, interest, service charges or any other amount due to the Association or the Bank: (i) under the Development Credit Agreement, or (ii) under any other development credit agreement between the Borrower and the Associa- tion, or (iii) under any loan or guarantee agreement between the Borrower and the Bank, or (iv) in con- sequence of any guarantee or other financial obligation of any kind extended by the Bank to any third party with the agreement of the Borrower, provided however, that, for purposes of this paragraph a payment made to the Association by a Government, upon request from the Association, exercising as assignee of the Borrower the right of the Borrower to receive such payment from such Government, shall not be deemed made by a third party." 9. Paragraph (e) of Section 6.02 is deleted and replaced by the following paragrah (e): "(e) (i) Any of the countries mentioned, as of the date of this Agreement, in Schedule 6 to the Development Credit Agreement shall have been deleted from such Schedule or shall have otherwise ceased to be an Eligible Country; or (ii) any Eligible Country shall have been suspended from membership in, or ceased to be a member of, the Association; or (iii) any Eligible Country shall have ceased to be a member of the International Monetary Fund; provided, however, that any suspension of the right of the Borrower to make -36 - withdrawals from the Credit Account based on this paragraph shall be limited to that part of the Credit intended to be used to finance one or more Sub-loans to such Eligible Country." 10. Section 6.03 is deleted and replaced by the following Section 6.03: "Section 6.03. Cancellation by the Association. If (a) the right of the Borrower to make withdrawals from the Credit Account shall have been suspended with respect to any amount of the Credit for a continuous period of thirty days, or (b) at any time, the Associa- tion determines, after consultation with the Borrower, that an amount of the Credit will not be required to finance the Project's costs to be financed out of the proceeds of the Credit, or (c) at any time, the Asso- ciation determines that the procurement of any item is inconsistent with the procedures set forth or referred to in the Development Credit Agreement and establishes the amount of the expenditures in respect of such item which would otherwise have been eligible for financing out of the proceeds of the Credit, or (d) after the Closing Date, an amount of the Credit shall remain unwithdrawn from the Credit Account, or (e) by the Effective Date, or a later date determined by the Association, any amount of the Credit allocated to one or two Sub-projects may not be eligible for withdrawal from the Credit Account because of lack of fulfillment of the conditions precedent to effectiveness to, or to the first disbursement under, any of the contractual arrangements referred to in Section 3.01 (b) of the Development Credit Agreement between the OPEC Fund or the Borrower and the Government or Governments in question, or because one or more of such contractual arrangements shall have been terminated by the OPEC Fund or the Borrower or the Government or Governments in question, the Association may, by notice to the Borrower, terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice, such amount of the Credit shall be cancelled." 11. The words "commitment and" are added between the words vtogether with the" and the words "service charges thereon" in the introductory paragraph to Section 7.01. - 37 - 12. The words "or any Eligible Country" are added after the word "Borrower" each time it occurs in paragraph (b) of Section 7.01. 13. Section 8.01 is hereby deleted and replaced by the following Section: "Section 8.01. Taxes. (a) The principal of, and other charges on, the Credit and/or the Sub-loans shall be paid without deduction for, and free from, any taxes levied by, or in the territory of any Eligible Country or in the territory where the Borrower is located. (b) The Development Credit Agreement, the Assign- ment Agreement referred to in Section 6.01 (b) of the Development Credit Agreement, and any other agreement to which these General Conditions shall be made applic- able, shall be free from any taxes levied by or in the territory of, the applicable Eligible Country or where the Borrower is located on or in connection with the execution, delivery or registration thereof." 14. Paragraph (b) of Section 9.01 is deleted and rer,'aced by the following paragraph (b): "(b) The Borrower shall cause each Eligible Country to afford reasonable opportunity for repre- sentatives of the Association to visit any part of its territories for purposes related to the Credit". 15. Section 9.02 is deleted and replaced by the following: "Section 9.02. Financial and Economic Data. The Borrower shall cause each Eligible Country to furnish to the Association all such information as the Associa- tion shall reasonably request with respect to financial and economic conditions in its territory including its balance of payments and its external debt as well as that of its political or administrative subdivisions and any entity owned or controlled by, or operating for the account or benefit of such Eligible Country or any such subdivision, and any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Eligible Country in question." -38 - SCHEDULE 6 Eligible Countries Dominica Grenada St. Kitts and Nevis Saint Lucia Saint Vincent and the Grenadines INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Development Association. FOR SECRETARY