CONFORMED COPY
GEF TRUST FUND GRANT NUMBER TF050327 RO
Global Environment Facility
Trust Fund Grant Agreement
(Agricultural Pollution Control Project)
between
ROMANIA
and
INTERNATIONAL BANK FOR RECONSTRUCTION
AND DEVELOPMENT
acting as an Implementing Agency of the Global Environment Facility
Dated January 16, 2002
GEF TRUST FUND GRANT NUMBER TF050327 RO
GLOBAL ENVIRONMENT FACILITY TRUST FUND GRANT AGREEMENT
AGREEMENT, dated January 16, 2002, between ROMANIA (the Recipient) and
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank)
acting as an implementing agency of the Global Environment Facility (GEF) in respect of grant
funds provided to the GEF Trust Fund by certain members of the Bank as participants of the

---

GEF.
WHEREAS (A) the Bank, pursuant to Resolution No. 91-5 of March 14, 1991 of the
Executive Directors of the Bank, established the GEF to assist in the protection of the global
environment and promote thereby environmentally sound and sustainable economic
development;
(B)
following the restructuring of the GEF, such arrangements continued in place on
the basis set forth in Resolution No. 94-2 of May 24, 1994, of the Executive Directors of the
Bank which, inter alia, established the GEF Trust Fund and appointed the Bank as trustee of the
GEF Trust Fund (Resolution No. 94-2);
(C)
the second replenishment of the GEF Trust Fund was approved on the basis set
forth in Resolution No. 98-2 of July 14, 1998, of the Executive Directors of the Bank (Resolution
No. 98-2);
(D)
the Recipient, having satisfied itself as to the feasibility and priority of the
project described in Schedule 2 to this Agreement (the Project), has requested assistance from
the resources of the GEF Trust Fund for funding the Project, and said request having been
approved in accordance with the provisions of the Instrument for the Establishment of the
Restructured Global Environment Facility approved under Resolution 94-2, and to be funded
from contributions to the GEF Trust Fund under Resolution No. 98-2, which may include funds
carried over from the first replenishment of the GEF Trust Fund under Resolution No. 94-2; and
WHEREAS the Bank has agreed, on the basis, inter alia, of the foregoing, to extend the
GEF Trust Fund Grant to the Recipient upon the terms and conditions set forth in this
Agreement;
NOW THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
General Conditions; Definitions
Section 1.01 (a) The following provisions of the General Conditions Applicable to Loan
and Guarantee Agreements for Currency Pool Loans of the Bank, dated January 1, 1985 (as
amended through October 6, 1999), with the modifications set forth in paragraph (b) of this
Section (the General Conditions) constitute an integral part of this Agreement:
(i)
Article I;
(ii)
Sections 2.01 (1), (2), (3), (4), (6), (8), (9), (10), (11), (15), (18) and
(20), 2.02 and 2.03;
(iii)
Section 3.01;

---

(iv)
Section 4.01 and the first sentence of Section 4.09;
(v)
Article V;
(vi)
Sections 6.01, 6.02 (a), (c), (d), (e), (f), (i), (k), (l), (m), (n), (o), and (p),
6.03, 6.04 and 6.06;
(vii)
Section 8.01 (b);
(viii)
Sections 9.01 (a) and (c), 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09;
(ix)
Sections 10.01, 10.03 and 10.04; and
(x)
Article XI; and
(xi)
Sections 12.01 (c), 12.03 and 12.04.
(b)
The General Conditions shall be modified as follows:
(i)
a new paragraph shall be added to the end of Section 2.01 to read as
follows: "the term "Special Drawing Rights" and the symbol "SDR"
mean special drawing rights as valued by the International Monetary
Fund in accordance with its Articles of Agreement";
(ii)
the term "Bank", wherever used in the General Conditions, other than in
Sections 2.01 (8) and 6.02 (f) thereof and the last use of such term in
Section 5.01 thereof, means the Bank acting as an implementing agency
of the GEF, except that in Section 6.02, the term "Bank" shall also
include the Bank acting in its own capacity;
(iii)
the term "Borrower", wherever used in the General Conditions, means
the Recipient;
(iv)
the term "Loan Agreement", wherever used in the General Conditions,
means this Agreement;
(v)
the term "Loan" and "loan", wherever used in the General Conditions,
means the GEF Trust Fund Grant;
(vi)
the term "Loan Account", wherever used in the General Conditions,
means the GEF Trust Fund Grant Account; and
(vii)
a new subparagraph is added after subparagraph (j) in Section 6.02 of the General
Conditions, as follows: "an extraordinary situation shall have arisen in which any further
disbursement under the GEF Trust Fund Grant would exceed the resources available for
disbursement from the GEF."
Section 1.02. Wherever used in this Agreement, unless the context otherwise requires,
the several terms defined in the General Conditions and in the Recitals to this Agreement have

---

the respective meanings therein set forth; and the term and the following additional terms have
the following meanings:
(a)
"Beneficiary" means an individual, community group or community, entity or
association, eligible for a Sub-grant (hereinafter defined) in accordance with the eligibility
criteria specified in the Sub-grant Guidelines (hereinafter defined), and for whose benefit a
Sub-grant is provided or proposed to be provided;
(b)
"DGAIA" means the Directorate General for Agriculture and Food Industry of
the Calarasi Judet, established on January 4, 2001, through Government Decision No. 12/2001;
(c)
"Eligible Categories" means categories (1) through (5); set forth in the table in
Part A.1 of Schedule 1 to this Agreement.
(d)
"Eligible Expenditures" means the expenditures for goods, works, services,
Sub-grants and operating costs referred to in Section 2.02 of this Agreement.
(e)
"Environmental Management Plan" means the plan, satisfactory to the Bank,
prepared and adopted by the Recipient, describing the environmental mitigation, monitoring, and
institutional measures under the Project;
(f)
"EPI" means the Environmental Protection Inspectorate of the Calarasi Judet
established on January 4, 2001, through Government Decision No. 17/2001;
(g)
"IAPSO" means the Inter-Agency Procurement Services Office of the United
Nations Development Programme (UNDP);
(h)
"MAFF" means the Recipient's Ministry of Agriculture, Food and Forests;
(i)
"MWEP" means the Recipient's Ministry of Waters and Environmental
Protection;
(j)
"NAEP" means the National Authority for Ecological Products of the Recipient,
established on April 17, 2000, through Government Ordinance No. 34/2000;
(k)
"OCGC" means the Office of Cadastre, Geodezy and Cartography of the
Calarasi Judet, established on May 17, 2001 through Government Ordinance No. 70/2001;
(l)
"Operational Manual" means the manual adopted by the Borrower, referred to in
Section 5.01(a) of this Agreement, setting forth the procedures for the implementation of the
Project, including the Sub-grant Guidelines;
(m)
"OJCAC" means the Office of Judet Agricultural Consultancy of the Calarasi

---

Judet, established on September 30, 1998, through Government Decision No. 676/1998;
(n)
"OJSPA" means the Office of Judet Soils Unit of the Calarasi Judet, established
on May 5, 1990, through Government Decision No. 477/1990;
(o)
"PHD" means the Public Health Directorate of the Calarasi Judet, established
through Minister Order No. 954/1998, issued by the Minister of Health on December 8, 1998;
(p)
"PMU" means the Project Management Unit to be established by the MWEP as
referred to in Section 6.01(a) of this Grant Agreement, or any legal successor thereto;
(q)
"Project Coordination Committee" means the committee established pursuant to
a Protocol signed in Calarasi, dated November 15, 2000;
(r)
"Project Management Report" means each report prepared in accordance with
Section 4.02 of this Agreement;
(s)
"Project Steering Committee" means the committee established pursuant to
Minister Order No. 670/2001, issued by the Minister of Waters and Environmental Protection on
July 20, 2001, and endorsed by the Minister of Public Finance, the Minister of Agriculture, Food
and Forestry and the Minister of Public Administration;
(t)
"Special Account" means the account referred to in Part B of Schedule 1 to this
Agreement;
(u)
"Sub-grant" means a grant made or proposed to be made by the Recipient,
through MWEP, out of the proceeds of the GEF Trust Fund Grant to a Beneficiary for the
financing of a Sub-project;
(v)
"Sub-grant Agreement" means an agreement between the Recipient and a
Beneficiary, and referred to in paragraph 6(f) of Schedule 4 to this Agreement;
(w)
"Sub-grant Guidelines" means the guidelines referred to in paragraph 4 of
Schedule 4 to this Agreement, and to be included in the Operational Manual, as such Sub-grant
Guidelines may be amended from time to time with the agreement of the Bank; and
(x)
"Sub-project" means an activity referred to under Part A(1)(a) of the Project, and
in respect of which a Sub-grant is provided, or proposed to be provided, for the benefit of the
Beneficiary.
ARTICLE II
The GEF Trust Fund Grant

---

Section 2.01. The Bank agrees to make available to the Recipient, on the terms and
conditions set forth or referred to in this Agreement, the GEF Trust Fund Grant in an amount in
various currencies equivalent to four million Special Drawing Rights (SDR 4,000,000).
Section 2.02. The amount of the GEF Trust Fund Grant may be withdrawn from the
GEF Trust Fund Grant Account in accordance with the provisions of Schedule 1 to this
Agreement for: (i) amounts paid (or, if the Bank shall so agree, to be paid) by the Recipient on
account of Sub-grants made under Part A(1)(a) of the Project to meet the reasonable cost of
goods, works and services required for the Sub-project in respect of which the withdrawal from
the GEF Trust Fund account is requested; and (ii) expenditures made (or, if the Bank shall so
agree, to be made) in respect of the reasonable cost of goods, works, services and operating costs
required for carrying out the Project, other than Part A(1)(a), and to be financed out of the
proceeds of the GEF Trust Fund Grant.
Section 2.03. The Closing Date shall be June 30, 2007, or such later date as the Bank
shall establish. The Bank shall promptly notify the Recipient of such later date.
ARTICLE III
Execution of the Project
Section 3.01. (a) The Recipient 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 with due
diligence and efficiency and in conformity with appropriate agricultural, administrative,
financial and technical practices and with due regard to ecological and environmental factors,
and shall provide, promptly as needed, the funds, facilities, services and other resources required
for the Project.
(b)
Without limitation upon the provisions of paragraph (a) of this Section and
except as the Recipient and the Bank shall otherwise agree, the Recipient shall carry out the
Project in accordance with the Implementation Program set forth in Schedule 4 to this
Agreement.
Section 3.02. For the purposes of Part A(1)(a) of the Project, the Recipient shall allocate
an amount of the GEF Trust Fund Grant not exceeding such amount as may be allocated from
time to time to Category (4) of the table in paragraph A.1 of Schedule 1 to this Agreement, to
provide Sub-grants to finance Sub-projects, on the terms and conditions acceptable to the Bank,
including, inter alia, those conditions specified in paragraph 6 of Schedule 4 to this Agreement.
Section 3.03. Except as the Bank shall otherwise agree, procurement of the goods, works
and consultants' services required for the Project and to be financed out of the proceeds of the
GEF Trust Fund Grant shall be governed by the provisions of Schedule 3 to this Agreement.
Section 3.04. For the purposes of Section 9.08 of the General Conditions and without

---

limitation thereto, the Recipient shall:
(a)
prepare, on the basis of guidelines acceptable to the Bank, and furnish to the
Bank not later than six months after the Closing Date or such later date as may be agreed for this
purpose between the Recipient and the Bank, a plan for the future operation of the Project; and
(b)
afford the Bank a reasonable opportunity to exchange views with the Recipient
on said plan.
ARTICLE IV
Financial Conditions
Section 4.01. (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 the operations, resources and expenditures in respect
of the Project and each Sub-project (including its cost and the benefits to be derived from it).
(b)
The Recipient shall:
(i)
have the records, accounts and financial statements referred to in
paragraph (a) of this Section, 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 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 such records and
accounts and the audit thereof as the Bank shall from time to time
reasonably request.
(c)
For all expenditures with respect to which withdrawals from the GEF Trust Fund
Grant Account were made on the basis of Project Management Reports or statements of
expenditure, the Recipient shall:
(i)
maintain or cause to be maintained, in accordance with paragraph (a) of
this Section, records and accounts reflecting such expenditures;

---

(ii)
retain, until at least one year after the Bank has received the audit report
for the fiscal year in which the last withdrawal from the GEF Trust Fund
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 paragraph (b) of this Section and that the report of such audit
contains a
separate opinion by said auditors as to whether the
Project Management Reports
or the statements of expenditure
submitted during such fiscal year, together with
the procedures and
internal controls involved in their preparation, can be relied
upon to
support the related withdrawals.
Section 4.02. (a) Without limitation upon the provisions of Section 4.01 of this
Agreement, the Recipient shall carry out a time-bound action plan acceptable to the Bank for the
strengthening of the financial management system referred to in paragraph (a) of said Section
4.01 in order to enable the Recipient, not later than May 15, 2002, or such later date as the Bank
shall agree, to prepare quarterly Project Management Reports, acceptable to the Bank, each of
which:
(i)
(A) sets forth actual sources and applications of funds for the Project, both
cumulatively and for the period covered by said report, and projected sources and applications of
funds for the Project for the six-month period following the period covered by said report, and
(B) shows separately expenditures financed out of the proceeds of the Grant during the period
covered by said report and expenditures proposed to be financed out of the proceeds of the Grant
during the six-month period following the period covered by said report;
(ii)
(A) describes physical progress in Project implementation, including output by
Project activity, both cumulatively and for the period covered by said report, and (B) explains
variances between the actual and previously forecast implementation targets; and
(iii)
sets forth the status of procurement under the Project and expenditures under
contracts financed out of the proceeds of the Grant, as at the end of the period covered by said
report.
(b) Upon the completion of the action plan referred to in paragraph (a) of this Section,
the Recipient shall prepare, in accordance with guidelines acceptable to the Bank, and furnish to
the Bank not later than 45 days after the end of each calendar quarter, a Project Management
Report for such period.
ARTICLE V
Remedies of the Bank

---

Section 5.01. Pursuant to Section 6.02 (p) of the General Conditions, the following
additional event is specified, namely, that the Operational Manual, including the Sub-grant
Guidelines, shall have been amended, suspended, abrogated, repealed or waived without prior
approval of the Bank.
ARTICLE VI
Effectiveness; Termination
Section 6.01. The following events are specified as conditions to the effectiveness of the
GEF Trust Fund Grant within the meaning of Section 12.01 (c) of the General Conditions:
(a)
the PMU has been established, in accordance with the law of the Recipient, and
appropriate staff selected, in a manner satisfactory to the Bank; and
(b)
the Recipient has selected the auditors referred to in Section 4.01 (b)(i) of this
Agreement, with experience, qualifications and terms of reference satisfactory to the Bank.
Section 6.02. The date one hundred and twenty (120) days after the date of this
Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions.
Section 6.03. This Agreement shall continue in effect until the GEF Trust Fund Grant
has been fully disbursed and the parties to this Agreement have fulfilled their obligations
hereunder.
ARTICLE VII
Representative of the Recipient; Addresses
Section 7.01. The Minister of Public Finance of the Recipient is designated as
representative of the Recipient for the purposes of Section 11.03 of the General Conditions.
Section 7.02. The following addresses are specified for the purposes of Section 11.01 of
the General Conditions:
For the Recipient:
Ministry of Public Finance
17, Apolodor Street
Bucharest
Romania
Telex:
Facsimile:
11239
401 312 6792

---

For the Bank:
International Bank for
Reconstruction and Development
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address:
Telex:
INTBAFRAD
248423 (MCI)
Washington, D.C.
64145 (MCI)
IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized
representatives, have caused this Agreement to be signed in their respective names in Bucharest,
Romania, as of the day and year first above written.
ROMANIA
By /s/ Mihai Nicolae Tanasescu
Authorized Representative
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT
as an implementing agency of the Global Environment Facility
By /s/ Andrew N. Vorkink
Director
South Central Europe Country Unit
Europe and Central Asia
SCHEDULE 1
Withdrawal of the Proceeds of the GEF Trust Fund Grant
A.
General
1.
The table below sets forth the Categories of items to be financed out of the proceeds of
the GEF Trust Fund Grant, the allocation of the amounts of the GEF Trust Fund Grant to each
Category and the percentage of expenditures for items so to be financed in each Category:
Amount of the
GEF Trust Fund Grant Allocated
% of

---

(Expressed in
Expenditures
Category
SDR Equivalent)
to be Financed
(1) Works
(a) under Part A(1)(d)(i)
of the Project
690,000
67%
(b) under Part A(1)(d)(ii)
100,000
17%
(c) under Parts A(2) and
A(3) of the Project
60,000
84%
(2) Goods
964,340
100% of foreign
expenditures
100% of local
expenditures
(ex-factory cost)
and 84% of local
expenditures
for other items
procured locally
(3) Consultants'
832,170
100%
services and training,
including auditing services
(4) Sub-grants under Part A(1)(a)
748,840
80%
of the Project
(5) Operating Costs
209,300
85% until
December 31, 2003;
80% until
December 31, 2004;
and 70% thereafter
(6) Unallocated
395,350
TOTAL
4,000,000
2.
For the purposes of this Schedule:
(a)
the term "foreign expenditures" means expenditures in the currency of any
country other than that of the Recipient for goods or services supplied from the territory of any
country other than that of the Recipient;

---

(b)
the term "local expenditures" means expenditures in the currency of the
Recipient or for goods or services supplied from the territory of the Recipient;
(c)
the term "operating costs" means recurrent expenditures incurred by the PMU to
manage and coordinate Project activities, including travel to Project sites, per diem expenses,
fuel, vehicle maintenance, translations, communications cost, utilities, office refurbishment,
office supplies and salaries of the PMU staff (other than government employees) in accordance
with a salary scale agreed upon with the Bank.
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.
4.
The Bank may require withdrawals from the GEF Trust Fund Grant Account to be made
on the basis of statements of expenditure for expenditures for: (a) goods under contracts costing
less than $100,000 equivalent; (b) works under contracts costing less than $50,000 equivalent;
(c) services provided by individual consultants under contracts costing less than $25,000
equivalent; (d) training under contracts costing less than $25,000 equivalent; (e) sub-grants under
Part A(1)(a) of the Project; and (f) operating costs, all under such terms and conditions as the
Bank shall specify by notice to the Recipient.
5.
If the Bank shall have determined at any time that any payment made from the GEF
Trust Fund Grant Account was used for any expenditure not consistent with the provisions of this
Agreement, the Recipient shall, promptly upon notice from the Bank, refund to the Bank for
deposit into the GEF Trust Fund Grant Account, an amount equal to the amount so used or the
portion thereof as specified by the Bank.
B.
Special Account
1.
The Recipient shall open and maintain in Dollars a special deposit account in a
commercial bank, on terms and conditions satisfactory to the Bank, including appropriate
protection against set-off, seizure and attachment.
2.
After the Bank has received evidence satisfactory to it that the Special Account has been
opened, withdrawals from the GEF Trust Fund Account of amounts to be deposited into the
Special Account shall be made as follows:
(a)
until the Bank shall have received (i) the first Project Management Report
referred to in Section 4.02(b) of this Agreement and (ii) a request from the Recipient for
withdrawal on the basis of Project Management Reports, withdrawals shall be made in
accordance with the provisions of Annex A to this Schedule 1; and
(b)
upon receipt by the Bank of a Project Management Report pursuant to Section
4.02(b) of this Agreement, accompanied by a request from the Recipient for withdrawal on the
basis of Project Management Reports, all further withdrawals shall be made in accordance with

---

the provisions of Annex B to this Schedule 1.
3.
Payments out of the Special Account shall be made exclusively for Eligible
Expenditures. 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.
4.
Notwithstanding the provisions of Part B.2 of this Schedule, the Bank shall not be
required to make further deposits into the Special Account:
(a)
if the Bank determines at any time that any Project Management Report does not
adequately provide the information required pursuant to Section 4.02 of this Agreement;
(b)
if the Bank determines at any time that all further withdrawals should be made
by the Recipient directly from the GEF Trust Fund Account; or
(c)
if the Recipient shall have failed to furnish to the Bank within the period of time
specified in Section 4.01(b)(ii) of this Agreement, any of the audit reports required to be
furnished to the Bank pursuant to said Section in respect of the audit of (A) the records and
accounts for the Special Account or (B) the records and accounts reflecting expenditures with
respect to which withdrawals were made on the basis of Project Management Reports.
5.
The Bank shall not be required to make further deposits into the Special Account in
accordance with the provisions of Part B.2 of this Schedule 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 GEF Trust Fund Account pursuant to Section 6.02 of the General
Conditions. Upon such notification, the Bank shall determine, in its sole discretion, whether
further deposits into the Special Account may be made and what procedures should be followed
for making such deposits, and shall notify the Recipient of its determination.
6.
(a)
If the Bank determines at any time that any payment out of the Special Account
was made for an expenditure which is not an Eligible Expenditure, or was not justified by the
evidence furnished to the Bank, the Recipient shall, promptly upon notice from the Bank, provide
such additional evidence as the Bank may request, or 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.
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 determines at any time that any amount outstanding in the Special
Account will not be required to cover payments for Eligible Expenditures during the six-month
period following such determination, the Recipient shall, promptly upon notice from the Bank,
refund to the Bank such outstanding amount.

---

(c)
The Recipient may, upon notice to the Bank, refund to the Bank all or any
portion of the funds on deposit in the Special Account.
(d)
Refunds to the Bank made pursuant to sub-paragraph (a), (b) or (c) of this
paragraph 6 shall be credited to the GEF Trust Fund Account for subsequent withdrawal or for
cancellation in accordance with the provisions of this Agreement.
Annex A
to
SCHEDULE 1
Operation of Special Account
When Withdrawals Are Not Made
On the Basis of Project Management Reports
1.
For the purposes of this Annex:
the term "Authorized Allocation" means an amount equivalent to $500,000 to be
withdrawn from the GEF Trust Fund Account and deposited into the Special Account pursuant to
paragraph 2 of this Annex; provided, however, that unless the Bank shall otherwise agree, the
Authorized Allocation shall be limited to an amount equivalent to $300,000 until the aggregate
amount of withdrawals from the GEF Trust Fund Account, plus the total amount of all
outstanding special commitments entered into by the Bank pursuant to Section 5.02 of the
General Conditions shall equal or exceed the equivalent of SDR 1,000,000.
2.
Withdrawals of Special Account's Authorized Allocation and subsequent withdrawals to
replenish the Special Account shall be made as follows:
(a)
For withdrawals of the Special Account's Authorized Allocation, the Recipient
shall furnish to the Bank a request or requests for deposit into the Special Account of an amount
or amounts which in the aggregate do not exceed the Authorized Allocation. On the basis of
each such request, the Bank shall, on behalf of the Recipient, withdraw from the GEF Trust Fund
Account and deposit into the Special Account such amount as the Recipient shall have requested.
(b)
For replenishment of the Special Account, the Recipient shall furnish to the
Bank requests for deposit into the Special Account at such intervals as the Bank shall specify.
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 Part B.3 of Schedule 1 to this Agreement for the
payment or payments in respect of which replenishment is requested. On the basis of each such
request, the Bank shall, on behalf of the Recipient, withdraw from the GEF Trust Fund Account
and deposit into the Special Account such amount as the Recipient shall have requested and as
shall have been shown by said documents and other evidence to have been paid out of the Special
Account for Eligible Expenditures. Each such deposit into the Special Account shall be
withdrawn by the Bank from the GEF Trust Fund Account under one or more of the Eligible

---

Categories.
3.
The Bank shall not be required to make further deposits into the Special Account, once
the total unwithdrawn amount of the Grant minus the total amount of all outstanding special
commitments entered into by the Bank pursuant to Section 5.02 of the General Conditions, shall
equal the equivalent of twice the amount of the Authorized Allocation. Thereafter, withdrawal
from the GEF Trust Fund 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.
Annex B
to
SCHEDULE 1
Operation of Special Account
When Withdrawals Are Made
On the Basis of Project Management Reports
1.
Except as the Bank may otherwise specify by notice to the Recipient, all withdrawals
from the GEF Trust Fund Account shall be deposited by the Bank into the Special Account in
accordance with the provisions of Schedule 1 to this Agreement. Each such deposit into the
Special Account shall be withdrawn by the Bank from the GEF Trust Fund Account under one or
more of the Eligible Categories.
2.
Each application for withdrawal from the GEF Trust Fund Account for deposit into the
Special Account shall be supported by a Project Management Report.
3.
Upon receipt of each application for withdrawal of an amount of the Grant, the Bank
shall, on behalf of the Recipient, withdraw from the GEF Trust Fund Account and deposit into
the Special Account an amount equal to the lesser of: (a) the amount so requested; and (b) the
amount which the Bank has determined, based on the Project Management Report accompanying
said application, is required to be deposited in order to finance Eligible Expenditures during the
six-month period following the date of such report; provided, however, that the amount so
deposited, when added to the amount indicated by said Project Management Report to be
remaining in the Special Account, shall not exceed the equivalent of $500,000.
SCHEDULE 2
Description of the Project
The objective of the Project is to increase the use of agricultural practices that benefit the
environment and lead to reduced nutrient discharge from agricultural sources in Romania to the

---

Danube River and the Black Sea.
The Project consists of the following parts, subject to such modifications thereof as the
Recipient and the Bank may agree upon from time to time to achieve such objectives.
Part A: Activities in the Calarasi Judet:
1.
(a) Provision of Sub-grants to Beneficiaries to support: (i) the purchasing and
installment manure storage facilities and equipment, at the household level, for manure collection
and application; and (ii) the performance of pilot organic farming, the adoption of agricultural
practices that would maintain or increase profitability from crop production while reducing
non-point source pollution.
(b) Promotion of improved agricultural practices through field-testing and carrying out
demonstration programs of integrated crop and nutrient management.
(c)
Training of Beneficiaries on good practices for waste collection and manure
management.
(d)
Installment of manure storage facilities and equipment for manure collection and
application for: (i) communas; and (ii) private farms.
2.
Supporting development of: (i) land-use management plan for the Boianu-Sticleanu
Polder; (ii) conservation management plan for the Iezer Calarasi nature reserve; and (iii)
ecological restoration of a part of the Calarasi Raul Polder.
3.
Strengthening the capacity of relevant local and national institutions to monitor the
impact of the activities performed under the Project on water and soil quality, through: (i)
financing the selection and maintenance of monitoring sites and development of baseline data of
the current status of surface and groundwater quality; (ii) training of field- and laboratory staff
of EPI and PHD; (iii) provision of funds to upgrade laboratory equipment of the relevant local
institutions to analyze water and soil samples from various water quality indicators; and (iv)
provision of funds to cover operating expenses for field monitoring activities under the Project.
Part B: Strengthening legal framework and implementation capacity at the national level:
1.
Provision of services to: (i) assist the MWEP to prepare legislation on water and soil
protection which will meet the standards of the EU in this area; and (ii) assist the MAFF to
prepare legislation on improved agricultural practices to benefit the environment.
2.
Provision of services to strengthen the capacity of the NAEP to promote scientific
organic farming and land use management.

---

Part C: Public Awareness and Replication Activities:
1.
Carrying out of public awareness activities at the local, national and regional level,
including training, workshops and other mass media products, to introduce the Project and its
benefits and to promote replication of the activities under the Project in other Black Sea riparian
countries.
2.
Strengthening the institutional capacity of DGAIA and EPI to deliver public awareness
activities.
Part D: Project Management and Implementation:
Provision of consultants' services and goods and financing of operating costs to assist
the PMU in Project management and implementation.
* * *
The Project is expected to be completed by December 31, 2006.
SCHEDULE 3
Procurement and Consultants' Services
Section I.
Procurement of Goods and Works
Part A: General
Goods and works shall be procured 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 the following provisions of Section I of this Schedule.
Part B: International Competitive Bidding
1.
Except as otherwise provided in Part C of this Section, goods and works shall be
procured under contracts awarded in accordance with the provisions of Section II of the
Guidelines and paragraph 5 of Appendix 1 thereto.
2.
The following provisions shall apply to goods and works to be procured under contracts

---

awarded in accordance with the provisions of paragraph 1 of this Part B:
(a)
Grouping of contracts
To the extent practicable, contracts for goods shall be grouped in bid packages estimated
to cost $100,000 equivalent or more each.
(b)
Preference for domestically manufactured goods
The provisions of paragraphs 2.54 and 2.55 of the Guidelines and Appendix 2 thereto
shall apply to goods manufactured in the territory of the Recipient.
Part C: Other Procurement Procedures
1.
National Competitive Bidding
Works estimated to cost less than $1,000,000 equivalent per contract, up to an aggregate
amount not to exceed $2,312,400 equivalent, may be procured under contracts awarded in
accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines.
2.
International Shopping
Goods estimated to cost less than $100,000 equivalent per contract, up to an aggregate
amount not to exceed $322,800 equivalent, may be procured under contracts awarded on the
basis of international shopping procedures in accordance with the provisions of paragraphs 3.5
and 3.6 of the Guidelines.
3.
National Shopping
Goods estimated to cost less than $50,000 equivalent per contract, up to an aggregate
amount not to exceed $550,800, respectively, may be procured under contracts awarded on the
basis of national shopping procedures in accordance with the provisions of paragraphs 3.5 and
3.6 of the Guidelines.
4.
Procurement from UN Agencies
Goods to be procured in accordance with the provisions of Part C.2 of this Section may
be procured through IAPSO in accordance with the provisions of paragraph 3.9 of the
Guidelines.
5.
Procurement of Small Works and Technical Services
Works and technical services estimated to cost less than $50,000 equivalent per contract,

---

up to an aggregate amount not to exceed $95,200 and $137,240 equivalent, respectively, may be
procured under lump-sum, fixed-price contracts awarded on the basis of quotations obtained
from three (3) qualified domestic contractors in response to a written invitation. The invitation
shall include a detailed description of the works, including basic specifications, the required
completion date, a basic form of agreement acceptable to the Bank, and relevant drawings, where
applicable. The award shall be made to the contractor who offers the lowest price quotation for
the required work, and who has the experience and resources to complete the contract
successfully.
6.
Community Participation
Works required for construction of well-heads and household manure bunkers under Part
A(1)(a) of the Project, estimated to cost less than $1,000 equivalent per contract, up to an
aggregate amount not to exceed $864,600 equivalent, shall be procured in accordance with the
provisions of paragraph 3.15 of the Guidelines and in accordance with procedures acceptable to
the Bank and specified in the Operational Manual.
Part D: Additional Provisions Regarding the National Competitive Bidding Procedures
When procuring works in accordance to the procedure referred to in Section I, C.1. of
this Schedule, the following procedures shall be followed: (a) invitations to bid shall be
advertised in at least one national newspaper with a wide circulation, at least 30 days prior to the
deadline for the submission of bids; (b) bid documents shall be made available, by mail or in
person, to all who are willing to pay the required fee; (c) foreign bidders shall not be precluded
from bidding and no preference of any kind shall be given to national bidders in the bidding
process; (d) bidding shall not be restricted to pre-registered firms; (e) qualification criteria shall
be stated in the bidding documents; (f) bids shall be opened in public, immediately after the
deadline for submission of bids; (g) bids shall not be rejected merely on the basis of a
comparison with an official estimate without the prior concurrence of the Bank; (h) before
rejecting all bids and soliciting new bids, the Bank's prior concurrence shall be obtained; (i)
contracts shall be awarded to the lowest evaluated bidders; and (j) post-bidding negotiations shall
not be allowed with the lowest evaluated or any other bidders.
Part E: Review by the Bank of Procurement Decisions
1.
Procurement Planning
Prior to the issuance of any invitations to prequalify for bidding or to bid for contracts,
the proposed procurement plan for the Project shall be furnished to the Bank for its review and
approval, in accordance with the provisions of paragraph 1 of Appendix 1 to the Guidelines.
Procurement of all goods and works shall be undertaken in accordance with such procurement
plan as shall have been approved by the Bank, and with the provisions of said paragraph 1.
2.
Prior Review

---

(a)
With respect to: (i) each contract for goods and works procured in accordance
with the procedure referred to in Section I, Part B.1 of this Schedule; and (ii) the first contract for
works procured in accordance with the procedure referred to in Section I, C.1 of this Schedule;
the procedures set forth in paragraphs 2 and 3 of Appendix 1 to the Guidelines shall apply.
(b)
With respect to: (i) the first contract for goods procured in accordance with the
procedures referred to in Section I, C.2 and C.3 of this Schedule; and (ii) the first contract for
works procured in accordance with the procedures referred to in Section I, C.5 of this Schedule,
the following procedures shall apply:
(i)
prior to the selection of any supplier under shopping procedures, the Recipient
shall provide to the Bank a report on the comparison and evaluation of
quotations received;
(ii)
prior to the execution of any contract procured under shopping procedures, the
Recipient shall provide to the Bank a copy of the specifications and the draft
contract; and
(iii)
the procedures set forth in paragraphs 2(f), 2(g) and 3 of Appendix 1 to the
Guidelines shall apply.
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 Guidelines shall apply.
Section II.
Employment of Consultants
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 Recipients" published by the Bank in January 1997 and revised in September 1997
and January 1999 (the Consultant Guidelines) and the following provisions of Section II of this
Schedule.
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.

---

2.
The following provisions shall apply to consultants' services to be procured under
contracts awarded in accordance with the provisions of the preceding paragraph. The short list
of consultants for services estimated to cost less than $200,000 equivalent per contract, may
comprise entirely national consultants in accordance with the provisions of paragraph 2.7 of the
Consultant Guidelines.
Part C: Other Procedures for the Selection of Consultants
1.
Least-cost Selection
Services for audits and training in the field of biology and hydrology, estimated to cost
less than $200,000 equivalent per contract may be procured under contracts awarded in
accordance with the provisions of paragraphs 3.1 and 3.6 of the Consultant Guidelines.
2.
Selection Based on Consultants' Qualifications
Services for estimated to cost less than $100,000 equivalent per contract may be
procured under contracts awarded in accordance with the provisions of paragraphs 3.1 and 3.7 of
the Consultant Guidelines.
3.
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 Project 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
(a)
With respect to each contract estimated to cost the equivalent of $200,000 or
more, the procedures set forth in paragraphs 1, 2 (other than the third subparagraph of paragraph
2(a)) and 5 of Appendix 1 to the Consultant Guidelines shall apply.

---

(b)
With respect to each contract for the employment of consulting firms estimated
to cost the equivalent of $100,000 or more, but less than the equivalent of $200,000, the
procedures set forth in paragraphs 1, 2 (other than the second subparagraph of paragraph 2(a))
and 5 of Appendix 1 to the Consultant Guidelines shall apply.
(c)
With respect to each contract for the employment of individual consultants
estimated to cost the equivalent of $25,000 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 1 of this Part, the procedures set
forth in paragraph 4 of Appendix 1 to the Consultant Guidelines shall apply.
SCHEDULE 4
Implementation Program
1.
The Recipient through MWEP shall:
(a)
maintain policies and procedures adequate to enable it to monitor and evaluate
on an ongoing basis, in accordance with indicators acceptable to the Bank, the carrying out of the
Project and the achievement of the objectives thereof;
(b)
prepare, through MWEP, under terms of reference satisfactory to the Bank, and
furnish to the Bank, on or about March 31, 2004, a report integrating the results of the
monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the
progress achieved in the carrying out of the Project during the period preceding the date of said
report and setting out the measures recommended to ensure the efficient carrying out of the
Project and the achievement of the objectives thereof during the period following such date; and
(c)
review with the Bank, by April 30, 2004, or such later date as the Bank shall
request, the report referred to in paragraph (b) of this Section, and, thereafter, take all measures
required to ensure the efficient completion of the Project and the achievement of the objectives
thereof, based on the conclusions and recommendations of the said report and the Bank's views
on the matter.
2.
The Recipient through MWEP shall:
(a) establish and maintain during the execution of the Project, the PMU, located at
DGAIA at Calarasi, with staff and resources as shall be required for the PMU to perform its
duties in respect of overall management and implementation of the Project in accordance with

---

the Operational Manual and satisfactory to the Bank;
(b) maintain during the execution of the Project the Project Steering Committee,
comprising of representatives from MWEP, MAFF, the Ministry of Public Finance and the
Ministry of Public Administration, which shall provide oversight and policy guidance for overall
implementation of the Project, and not amend its composition without the prior agreement of the
Bank; and
(c) maintain during the execution of the Project, the Project Coordination Committee,
comprising of the President of the Calarasi County Council, the Head of the Calarasi County
Local Administration, the Vice-President of the Calarasi County Council, the Director General of
DGAIA Calarasi, the Director of EPI Calarasi, the Director of PHD Calarasi, the Director OCGC
Calarasi, the Chief Architect of the Calarasi County Council, the Director of OJCA Calarasi,
Mayors of the Odobescu, Ciocanesti, Cuza Voda, Gradistea, Independenta, Vilcelele and Vlad
Tepes Communas, one farmer who owns land in the project area and the Director of the PMU,
and not amend its composition without the prior agreement of the Bank, which shall provide
oversight and policy guidance as it applies specifically to the implementation of the Project in the
Calarasi Judet.
3.
The Recipient shall, through the MWEP, ensure that all measures necessary for the
carrying out of the Environmental Management Plan are taken in a timely manner.
4.
For the purposes of carrying out Part A(1)(a) of the Project, the Recipient has adopted
the Sub-grant Guidelines, satisfactory to the Bank, setting forth procedural arrangements for the
review, appraisal, supervision, and monitoring and evaluation, of Sub-projects, including
procedures for submission and review of requests for financing, criteria for the review and
approval of Sub-projects, and approval of Sub-grants, applicable procurement, disbursement and
other implementation guidelines, and model forms of Sub-project Agreements and works
contracts with local contractors.
5.
The Recipient shall not amend, suspend, abrogate, repeal or waive the Operational
Manual, including the Sub-grant Guidelines, without the Bank's prior consent.
6.
Further to Section 3.02 of this Agreement, the use of the proceeds of the GEF Trust Fund
Grant allocated to Category (4) of the table in paragraph A.1 of Schedule 1 to this Agreement
shall be subject to the following additional terms and conditions:
(a)
the amount so allocated shall be used exclusively to provide Sub-grants to
finance Sub-projects in accordance with criteria and terms and conditions set forth in the
Sub-grant Guidelines;
(b)
no Sub-grant shall be granted except to finance a Sub-project which is to: (i)
purchase and install manure storage facilities and/or equipment for manure collection and
application; or (ii) perform pilot organic farming, adopting agricultural practices that would
maintain or increase profitability from crop production while reducing non-point source

---

pollution;
(c)
no Sub-project shall be considered for approval unless the Beneficiary has
provided a plan for the maintenance of any productive assets resulting from the Sub-project,
upon its completion, and for the payment of recurrent expenditures required thereunder;
(d)
Sub-grants shall be provided for the benefit of eligible Beneficiaries, and
according to a cost-sharing formula, which may include in-kind contributions from the
Beneficiary and shall be acceptable to the Bank and specified in the Sub-grant Guidelines;
provided, however, that:
(i)
the proceeds of a Sub-grant shall not be used to finance taxes or duties
levied on or in respect of eligible expenditures relating to a Sub-project,
or any part thereof, or land acquisition; and
(ii)
except as the Bank shall otherwise agree, the amount of each Sub-grant
shall not exceed eighty (80) percent of the total cost of the Sub-project.
(e)
goods, services and works required for the purposes of carrying out Sub-projects
shall be procured in accordance with the procedures referred to in Schedule 3 to this Agreement
and set forth in the Sub-grant Guidelines;
(f)
for purposes of each Sub-grant, the Recipient shall, through MWEP, conclude
an agreement with the Beneficiary based on a model form provided in the Sub-grant Guidelines
(Sub-Grant Agreement), setting forth the respective obligations of the parties thereunder,
including the terms of Sub-grants set forth in paragraphs 6 (a) ­ (e) of this Schedule,
disbursement and procurement procedures, as they may apply, the amount of the Beneficiary's
contribution to the cost of the Sub-project, and the right of the Recipient to:
(i)
require the Beneficiary (A) to carry out the Sub-project with due
diligence and efficiency, in conformity with appropriate agricultural,
administrative, financial, engineering and technical practices, and with
due regard to ecological and environmental factors, and to maintain
adequate records, and (B) upon completion of the Sub-project, to make
provision for the maintenance of any productive assets resulting
therefrom, and for the payment of recurrent expenditures generated
thereunder;
(ii)
obtain all such information as the Bank or the Recipient shall reasonably
request relating to the implementation of the Sub-project and the
performance of the Beneficiary thereunder; and
(iii)
suspend or terminate the right of the Beneficiary to the use of the
proceeds of a Sub-grant upon failure by such Beneficiary to perform its

---

obligations under such agreement.

---