February 9, 2000
His Excellency
Decebal Traian Remes
Minister of Finance
Ministry of Finance
Bucharest, Romania
Re:
Grant for Preparation of Agricultural Pollution Control for
Romania GEF-PPG 023482
Excellency:
I am writing on behalf of the International Bank for Reconstruction and
Development (the Bank) acting as an Implementing Agency of the GEF to indicate the
Bank's agreement to grant to the Government of Romania (the Recipient) a Grant in an
amount not exceeding US$300,000 (the Grant). 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 represents,
by confirming its agreement below, that it is authorized to contract and withdraw the
Grant for the said purposes and on the said terms and conditions.
The award of the Grant does not constitute or imply any commitment on the part
of the Bank, either as a GEF Implementing Agency, or in its own capacity, or the
International Development Association, to assist in financing any project which will
result from the activities financed by the Grant.
Please confirm your agreement with the foregoing, on behalf of the Recipient, by
signing, dating, and returning to us the enclosed copy of this Letter Agreement.
Upon receipt by the Bank of the copy of this Letter Agreement countersigned by
you, this Letter Agreement will become effective as of the date of the
countersignature.
Very truly yours,
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT
acting as an Implementing Agency
of the Global Environment Facility
By /s/ Andrew N. Vorkink
Country Director
Bulgaria and Romania Country Unit
Europe and Central Asia Region
AGREED:
GOVERNMENT OF ROMANIA
By /s/ Decebal Traian Remes
Authorized Representative
Date:
February 23, 2000
Attachment
ANNEX
Purposes, Terms, and Conditions of the Grant
1.
Purposes and Activities
1.1.
The purposes of the Grant are to assist in the preparation of the Agricultural
Pollution Control Project, which has as main objective of reducing agricultural
pollution into the Danube River and Black Sea through integrated management of the
Calarasi region (the Project). The activities (the Activities) for which the Grant is

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given are as follows:
(i)
Baseline Survey: To support necessary survey and prepare a report
that would systematically describe, detail and synthesize key
sector information (description of the current land-use, economic
assessments, biodiversity status, problems, causes, institutional
arrangements, social assessment, agronomic practices, etc.). This
would
provide the background information needed for design of the
project; and
(ii)
Capacity building and Participatory Approach to Development of
Detailed Project Design and Project Implementation Plan. To
develop (in a participatory manner with the Romanian preparation
team) the project components and sub-components and a sequence of
detailed activities, implementation plan and investment needs,
including Terms of Reference for any major contracts to be
implemented under the project. The aim will be to build national
capacity for developing project design and its implementation
after project effectiveness.
2.
Implementation Generally
2.1.
The Recipient shall: (a) carry out the Activities with due diligence and
efficiency; (b) promptly provide the funds, facilities, services and other resources
required for that purpose; (c) furnish all information covering the Activities and the
use of the proceeds of the Grant as the Bank shall reasonably request; (d) from time
to time exchange views with the Bank's representatives on the progress and results of
the Activities and (e) take all necessary measures required to enable the Bank to
visit the territory of [member country] for the purposes related to the Grant.
Without limitation on the foregoing, the Recipient shall, if the Bank shall so
request, prepare and furnish to the Bank promptly upon completion of the Activities a
report, in form and substance satisfactory to the Bank, on the results and impact of
the Activities.
3.
Procurement
3.1
Except as the Bank shall otherwise agree, procurement of the consultants'
services [and goods] required for the carrying out of the Activities and to be
financed out of the proceeds of the Grant shall be governed by the provisions of
Attachment I to this Annex.
3.2.
The Recipient shall ensure that all imported goods to be financed out of the
proceeds of the Grant shall be insured against hazards incident to the acquisition,
transportation and delivery thereof to the place of use or installation, and that any
indemnity for such insurance is payable in a freely usable currency to replace or
repair such goods. The Recipient shall ensure that any facilities relevant to the
Activities are at all times operated and maintained in accordance with appropriate
practices and that any repairs or renewals of such facilities are promptly made as
needed.
4.
Withdrawal of Grant Proceeds
4.1.
The amount of the Grant shall be credited to an account opened by the Bank on
its books in the name of the Recipient (the Grant Account), and may be withdrawn
therefrom by the Recipient in accordance with the provisions of this Section 4, for
expenditures in respect of the reasonable cost of goods and services required for the
Activities and to be financed out of the proceeds of the Grant.
4.2.
The expenditures for the following items may be financed out of the proceeds of
the Grant and shall be used exclusively in the carrying out of the Activities:
Amount of the % of
Grant Allocated
Expenditures
Item
(in U.S. Dollars)
to be Financed
(1)
Consultants'
164,000
100%
Services
(2)
Goods

56,000
85% of local
expenditures
(3)
Incremental Operating Costs 80,000
85%

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The term "local expenditures" means expenditures in the currency of the
Recipient or for goods supplied from the territory of the Recipient.
The term "Incremental Operating Costs" means recurrent expenditures incurred by
the Project Preparation Facility to coordinate project activities, including travel to
project sites, per diem expenses, fuel, driver, vehicle maintenance, translations,
communication (e-mail, telephone, fax), utilities (power, water, sanitation), project
assistant, office refurbishment (painting, renting office furniture, electrical
fittings), and office supplies.
4.3.
Notwithstanding the provisions of paragraph 4.2 above: (a) no withdrawals shall
be made: (i) for payments made for expenditures prior to the date of this Letter
Agreement; (ii) on account of payments for any taxes levied by or in the territory of
the Recipient; (iii) on account of expenditures in the territories of any country
which is not a member of the Bank or for goods produced in or services supplied from
such territories; (iv) for the purpose of any payment to persons or entities, or for
any import of goods, if such payment or import, to the Bank's knowledge, is prohibited
by a decision of the United Nations Security Council taken under Chapter VII of the
Charter of the United Nations; or (v) after June 30, 2001, or such later date as the
Bank shall establish by written notice to the Recipient (the Closing Date), except
that withdrawals may be made for expenditures incurred prior to the Closing Date and
received by the Bank within four months after the Closing Date, after which time any
amount of the Grant remaining unwithdrawn from the Grant Account shall be canceled;
and (b) if, in the Bank's opinion, an amount of the Grant allocated to any of the
items in the table in paragraph 4.2 above will be insufficient to finance the
expenditures for such item, it may, by written notice to the Recipient, reallocate to
such item an amount of the Grant then allocated to another item which in its opinion
will not be necessary to meet other expenditures.
4.4
When the Recipient shall desire to withdraw any amount from the Grant Account,
it shall deliver to the Bank a written application for withdrawal of such amount in
the form specified by the Bank. Withdrawal applications shall be: (a) signed on behalf
of the Recipient by authorized official or such other person as he or she shall have
authorized in writing; and (b) be accompanied by such evidence in support of the
application as the Bank shall reasonably request. Authenticated specimen signatures
of the person authorized to sign withdrawal applications shall be provided with the
first application bearing his or her signature. Each withdrawal application for an
amount of the Grant is supporting evidence must be sufficient in form and substance to
satisfy the Bank that the Recipient is entitled to withdraw such amount from the Grant
Account and that such amount is to be used in the carrying out of the Activities. The
Bank shall pay the amounts withdrawn by the Recipient from the Grant Account only to
or on the order of the Recipient.
4.5
The Bank may require withdrawals from the Grant Account to be made on the basis
of statements of expenditure for expenditures for: (a) services of consulting firms
costing less than $10,000 equivalent; (b) goods; and (c) incremental operating costs,
all under such terms and conditions as the Bank shall specify by notice to the
Recipient.
4.6.
Withdrawals of the proceeds of the Grant shall be made in the currency of the
Grant. The Bank, at the Recipient's request and acting as an agent of the Recipient,
shall purchase with the currency of the Grant withdrawn from the Grant Account such
currencies as shall be required to pay for expenditures to be financed out of the
proceeds of the Grant. Whenever it shall be necessary, for the purposes of this Letter
Agreement, to determine the value of one currency in terms of another, such value
shall be as reasonably determined by the Bank.
4.7.
To facilitate the carrying out of the Activities, the Recipient may open and
maintain in U.S. dollars a special deposit account (the Special 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 the Attachment II to this Annex.
5.
Accounts and Audits
5.1.
(a) The Recipient shall maintain or cause to be maintained a financial
management system, including records and accounts, and prepare financial statements in
a format acceptable to the Bank, adequate to reflect in accordance with sound
accounting practices the operations, resources and expenditures related to the
Activities related to the Activities.

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(b) The Recipient shall: (i) have the records, accounts and financial statements
referred to in subparagraph (a) above and the records and accounts for the Special
Account for each fiscal year audited, in accordance with auditing standards acceptable
to the Bank, consistently applied, by independent auditors with qualifications,
experience and terms of reference 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, (A) certified copies of the financial statements referred to in paragraph
(a) of this Section for such year as so audited, and (b) an opinion on such
statements, records and accounts and 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, and concerning said auditors, as the Bank shall from time to time
reasonably request.
(c) For all expenditures with respect to which withdrawals from the Grant
Account were made on the basis of statements of expenditure, the Recipient shall: (i)
maintain or cause to be maintained, in accordance with subparagraph (a) above, records
and accounts reflecting such expenditures; (ii) retain, until at least after one year
after the Bank has received the audit report for the fiscal year in which the last
withdrawal from the Grant 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 subparagraph (b) above 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.
6.
Suspension and Cancellation
6.1.
The Bank may at any time, by notice to the Recipient, suspend the right of the
Recipient to make further withdrawals from the Grant Account if any of the following
events has occurred and is continuing: (a) the Recipient has failed to comply with
any of its obligations therein specified; or (b) the right of the Recipient, or any
other entity to which the Bank has made a loan with the guarantee of the Government of
Romania, to make withdrawals under any loan agreement with the Bank or any
development credit agreement with the International Development Association shall have
been suspended.
6.2.
The Bank may, by written notice to the Recipient, terminate the right of the
Recipient to make further withdrawals from the Grant Account: (a) at any time after
the right of the Recipient to make withdrawals from the Grant Account shall have been
suspended pursuant to the provisions of paragraph 6.1 above; or (b) if the Recipient
shall have failed to take action, satisfactory to the Bank, within 90 days after the
effective date hereof, to carry out the Activities; or (c) if the Bank has decided, at
any time after consultation with the Recipient, to withdraw its support to the
Project; or (d) if the Recipient has withdrawn its request for the Bank's assistance
in financing the Project.
Attachment I
Procurement
Section I.
Consultants' Services
Part A:
General
Consultants' services shall be procured in accordance with the provisions of 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 Section I.
Part B:
Quality- and Cost-based Selection
1.
Except as otherwise provided in Part C of this Section, consultants' services
shall be procured under contracts awarded in accordance with the provisions of Section
II of the Consultant Guidelines, paragraph 3 of Appendix 1 thereto, Appendix 2
thereto, and the provisions of paragraphs 3.13 through 3.18 thereof applicable to
quality- and cost-based selection of consultants.

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Part C:
Other Procedures for the Selection of Consultants
Specific exceptions to QCBS should be included in this Part (see Section III of
the Consultant Guidelines).
Individual Consultants
Services for tasks that meet the requirements set forth in paragraph 5.1 of the
Consultant Guidelines shall be procured under contracts awarded to individual
consultants in accordance with the provisions of paragraphs 5.1 through 5.3 of the
Consultant Guidelines.
Part D:
Review by the Bank of the Selection of Consultants
1.
Selection Planning
Prior to the issuance to consultants of any requests for proposals, the proposed
plan for the selection of consultants under the Activities shall be furnished to the
Bank for its review and approval, in accordance with the provisions of paragraph 1 of
Appendix 1 to the Consultant Guidelines. Selection of all consultants' services shall
be undertaken in accordance with such selection plan as shall have been approved by
the Bank, and with the provisions of said paragraph 1.
2.
Prior Review
With respect to each contract for the employment of individual consultants
estimated to cost the equivalent of US$10,000 or more, the qualifications, experience,
terms of reference and terms of employment of the consultants shall be furnished to
the Bank for its prior review and approval. The contract shall be awarded only after
said approval shall have been given.
3.
Post Review
With respect to each contract not governed by paragraph 2 of this Part, the
procedures set forth in paragraph 4 of Appendix 1 to the Consultant Guidelines shall
apply.
Section II.
Procurement of Goods
Goods shall be procured: (a) in accordance with the provisions of Section I of
the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the
Bank in January 1995 and revised in January and August 1996, September 1997 and
January 1999 (the Guidelines); and (b) under contracts awarded on the basis of
shopping procedures in accordance with the provisions of paragraphs 3.5 and 3.6 of the
Guidelines. The review procedures set forth in paragraph 4 of Appendix 1 to the
Guidelines shall apply to such contracts, provided that the word "bids", in such
paragraph 4, shall be read as "quotations".
Attachment II
Special Account
1.
For the purposes of this Attachment:
(a) The term "eligible item(s)" means the item(s) set forth in the table in
paragraph 4.2 of the Annex to this Letter Agreement;
(b) The term "eligible expenditures" means expenditures in respect of the
reasonable cost of goods and services required for the Activities and to be financed
out of the proceeds of the Grant; and
(c) The term "Authorized Allocation" means an amount equivalent to $150,000 to
be withdrawn from the Grant Account and deposited into the Special Account pursuant to
paragraph 3 (a) of this Attachment.
2.
Payments out of the Special Account shall be made exclusively for eligible
expenditures in accordance with the provisions of this Attachment.
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:

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(a) the Recipient shall furnish to the Bank a request or requests for a deposit
into the Special Account of an amount or amounts 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 Recipient, withdraw from the Grant Account and deposit
into the Special Account such amount or amounts as the Recipient shall have requested.
(b)
(i)
For replenishment of the Special Account, the Recipient 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 Recipient shall
furnish to the Bank the documents and other evidence required
pursuant to paragraph 4 of this Attachment for the payment or
payments in respect of which replenishment is requested. All such
deposits shall be withdrawn by the Bank from the Grant Account
under the eligible item(s), and in the respective equivalent
amounts, as shall have been justified by said documents and other
evidence.
4.
For each payment made by the Recipient out of the Special Account, the Recipient
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 Attachment, 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 Recipient directly from the Grant;
(b) if the Recipient shall have failed to furnish to the Bank, within the
period of time specified in paragraph 5.1 (b) (ii) of the Annex of this Letter
Agreement, any of the audit reports required to be furnished to the Bank pursuant to
said paragraph in respect of the audit of the records and accounts for the Special
Account:
(c) if, at any time, the Bank shall have notified the Recipient of its
intention to suspend in whole or in part the right of the Recipient to make
withdrawals from the Grant Account pursuant to the provisions of paragraph 6.1 of the
Annex to this Letter Agreement; or
(d) Once the total withdrawn amount of the Grant shall equal the equivalent of
twice the amount of the Authorized Allocation.
Thereafter, withdrawals from the Grant Account of the remaining unwithdrawn amount of
the Grant shall follow such procedures as the Bank shall specify by notice to the
Recipient. 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 an amount not eligible pursuant to
paragraph 2 of this Attachment; or (ii) was not justified by the evidence furnished to
the Bank, the Recipient 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 Recipient 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 Recipient shall, promptly upon notice from the Bank, refund to the
Bank such outstanding amount.

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