CONFORMED COPY
GEF TRUST FUND GRANT NUMBER TF055265
Global Environment Facility
Trust Fund Grant Agreement
(Water Quality Protection Project)
between
BOSNIA AND HERZEGOVINA
and
INTERNATIONAL BANK FOR RECONSTRUCTION
AND DEVELOPMENT
acting as an Implementing Agency of the Global Environment Facility
Dated July 12, 2005
GEF TRUST FUND GRANT NUMBER TF055265
GLOBAL ENVIRONMENT FACILITY TRUST FUND GRANT AGREEMENT
AGREEMENT, dated July 12, 2005, between BOSNIA and HERZEGOVINA
(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 94-2);
(C)
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
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 Single Currency Loans" of the Bank, dated May
30, 1995 (as amended through May 1, 2004), with the modifications set forth in
paragraph (b) of this Section (the General Conditions) constitute an integral part of this
Agreement:
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(i) Article
I;
(ii)
Sections 2.01 (2), (3), (4), (5), (6), (7), (8), (9), (14), (15), (16),
(18) and (21), 2.02 and 2.03;
(iii) Section
3.01;
(iv)
Sections 4.01 and 4.06;
(v) Article
V;
(vi)
Sections 6.01, 6.02 (c), (d), (e), (f), (i), (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;
(x)
Article XI; and
(xi)
Sections 12.01, 12.02, 12.03 and 12.04.
(b)
The General Conditions shall be modified as follows:
(i)
the term "Bank", wherever used in the General Conditions, other
than in Sections 2.01 (6), 6.02 (f) 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;
(ii)
the term "Borrower", wherever used in the General Conditions,
means the Recipient;
(iii)
the term "Loan Agreement", wherever used in the General
Conditions, means this Agreement;
(iv)
the term "Loan" and "loan", wherever used in the General
Conditions, means the GEF Trust Fund Grant;
(v)
the term "Loan Account", wherever used in the General
Conditions, means the GEF Trust Fund Grant Account;
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(vi)
a new subparagraph is added after subparagraph
(o) 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."; and
(vii)
the words "corrupt or fraudulent" in paragraph (c) of Section
6.03 are replaced with the words "corrupt, fraudulent, collusive
or coercive".
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 following additional
terms have the following meanings:
(a)
"Environmental Management Plans" means, collectively, the four
environmental management plans, satisfactory to the Bank, prepared and adopted by the
Recipient and the Federation on March 17, 2005, setting forth the environmental and
social mitigation and monitoring plans, implementation schedules, and institutional
arrangements to be taken during the implementation and operation of the four Sub-
projects to be undertaken by the Participating Utilities in Mostar, Zivinice, Trnovo, and
Odzak during Project implementation in order to avoid or reduce adverse environmental
impacts, and the actions needed to implement these measures, and referred to in
paragraph 2 of Schedule 3 to this Agreement and sub-paragraph 4 (c) of Schedule 1 to the
Project Agreement (as hereafter defined);
(b)
"Environmental Framework Policy" means the environmental framework
policy, entitled "Environmental Guidelines", satisfactory to the Bank, prepared and
adopted by the Recipient and the Federation on March 17, 2005, setting forth the
environmental and social mitigation, monitoring and institutional measures to be taken
during the implementation and operation of the Project to avoid or reduce adverse
environmental impacts from chance finds, as well as Sub-projects (as hereafter defined)
that may be identified, appraised, and financed after the date of signature of this
Agreement by agreement from time to time between the Recipient and the Bank, and the
actions needed to implement these measures, and referred to in paragraph 2 of Schedule 3
to this Agreement and sub-paragraph 4 (c) of Schedule 1 to the Project Agreement;
(c)
"Federation" means the Federation of Bosnia and Herzegovina, a
political subdivision of the Recipient, and includes any successor or successors thereto;
(d)
"Financial Monitoring Report" means each report prepared in accordance
with Section 4.02 of this Agreement.
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(e)
"Investments" means the rehabilitation and improvement of
infrastructure systems for water supply and sanitation leading to environmental benefit;
(f)
"MOA" means the Ministry of Agriculture, Water Management and
Forestry of the Federation, and includes any successor thereto;
(g)
"Operational Manual" means the manual, including the Project
Implementation Plan, the Financial Management Manual, and the Environmental
Framework Policy, referred to in paragraph 1 of Schedule 1 to the Project Agreement,
satisfactory to the Bank, to be adopted by the Recipient and the Federation, respectively,
and setting out the operational and administrative procedures for the implementation of
the Project, including the selection, approval, processing, financing, implementation,
monitoring, evaluation and supervision of Sub-projects, as the same may be amended
from time to time by agreement between the Bank and the Recipient;
(h)
"PCWM" means the Public Company for Water Management of Sava
Catchment Sarajevo and Adriatic Sea catchment Mostar", an enterprise wholly-
owned by the Federation, responsible for water management, and established under the
MOA pursuant to the Water Law of the Federation, and includes any successor thereto;
(i)
"PITs" means the Project Implementation Teams established and to be
established within the Participating Utilities, comprised of a qualified Procurement
Officer and a Financial Officer, and such other qualified personnel as may be necessary
for Project purposes, employed under terms of reference satisfactory to the Bank if the
salary of any such person will be financed under the Project, and which Teams will be
responsible for the day-to-day implementation and administration of the Sub-projects,
and "PIT" means any of them, subject to such modifications thereof as the Recipient and
the Bank may agree upon from time to time;
(j)
"PMT" means the Project Management Team established within the
MOA, staffed by qualified personnel of the MOA and PCWM, and comprised of a
qualified Procurement Manager, Procurement Officer, Financial Manager and Assistant,
and such other qualified personnel as may be necessary for Project purposes, all of whose
services will be retained for the entire implementation of the Project, and which Team
will be responsible for Project financial management and procurement, subject to such
modifications thereof as the Recipient and the Bank may agree upon from time to time;
(k)
"Participating Utility" means a Utility (as hereafter defined) in Mostar,
Zivinice, Trnovo-Sarajevo, and Odzak which is to participate in the carrying out of the
Project pursuant to a Sub-Grant Agreement (as hereafter defined) between the Federation
and such Utility under Section 2.01 (b) of the Project Agreement, including any
additional Utilities that may participate in the Project by agreement from time to time
among the Recipient, the Bank and the Federation;
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(l)
"Procurement Plan" means the Recipient's procurement plan, dated
March 17, 2005, covering the initial 18 month period (or longer) of Project
implementation, as the same shall be updated from time to time in accordance with the
provisions of Section 3.02 to this Agreement, to cover succeeding 18 month periods (or
longer) of Project implementation.
(m)
"Project Agreement" means the agreement between the Bank and the
Federation of even date herewith, as the same may be amended from time to time, and
such term includes all schedules and agreements supplemental to the Project Agreement;
(n)
"Special Account" means the account referred to in Section 2.02 (b) of
this Agreement;
(o)
"Sub-Grant" means a grant provided or to be provided by the Federation
to a Participating Utility under a Sub-Grant Agreement (as hereafter defined) from the
proceeds of the Grant provided to the Federation under the Subsidiary Grant Agreement;
(p)
"Sub-Grant Agreement" means the agreement to be entered into between
the Federation and a Participating Utility pursuant to paragraph (a) of Section 3.04 of this
Agreement and referred to in paragraph (b) of Section 2.01 of the Project Agreement, as
the same agreement may be amended from time to time with the prior approval of the
Bank, and such term includes all schedules and agreements supplemental to each Sub-
Grant Agreement; and the term "Sub-Grant Agreements" means all said agreements
collectively;
(q)
"Sub-project" means a high-priority, low-cost water supply or sanitation
capital investment project, and related investments, to be carried out by a Participating
Utility under Part B of the Project;
(r)
"Subsidiary Grant" means the grant provided by the Recipient to the
Federation under the Subsidiary Agreement (as hereafter defined) from the proceeds of
the Grant;
(s)
"Subsidiary Grant Agreement" means the agreement to be entered into
between the Recipient and the Federation pursuant to paragraph (c) of Section 3.01 of
this Agreement, and pursuant to which the Recipient makes available to the Federation
the proceeds of the Grant for the carrying out of the Project, as the same agreement may
be amended from time to time with the prior approval of the Bank, and such term
includes all schedules and agreements supplemental to the Sub-Grant Agreement;
(t)
"Utility" means a local body or enterprise operating in the Federation
that is responsible for the provision of water supply and sanitation within the relevant
geographical area, and "Utilities" means more than one Utility; and
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(u)
"Wastewater Improvement Plan" means the plan to provide the basis for
all further actions for a National Wastewater Strategy for reducing river pollution in the
Federation, and consisting of: (i) a review of existing laws and regulations dealing with
the discharge of effluent for the various river regimes; (ii) a description of existing
institutional arrangements; (iii) recommendations for the measures necessary to reduce
pollution and the development of a long-term river quality monitoring program; (iv) a
financing plan; (v) an analysis of the economic benefits of clean rivers; (vi)
recommendations for institutional improvements, including coordination with riparian
countries; and such additional matters as may be agreed from time to time among the
Recipient, the Bank and the Federation.
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 equal to eight million nine hundred thousand Dollars ($8,900,000).
Section 2.02. (a) 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 expenditures made (or, if the Bank shall so agree, to be made) in
respect of the reasonable cost of goods, works and services required for the Project and to
be financed out of the proceeds of the GEF Trust Fund Grant.
(b)
The Recipient may, for the purposes of the Project, open and maintain in
Dollars a special deposit account in a commercial bank on terms and conditions
satisfactory to the Bank, including appropriate protection against set off, seizure or
attachment. Deposits into, and payments out of, the Special Account shall be made in
accordance with the provisions of Schedule 4 to this Agreement.
Section 2.03. The Closing Date shall be February 28, 2011 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 through the PMT with due diligence and efficiency and in conformity with
appropriate administrative, financial, technical and environmental 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.
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(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 3 to
this Agreement and the Operational Manual, and shall cause the Federation, as well the
PMT and the PITs, to perform their respective obligations under the Project in
accordance with the provisions of the implementation program set forth in Schedule 3 to
this Agreement, the Operational Manual, and the Project Agreement, respectively.
(c)
The Recipient shall make available to the Federation the entire proceeds
of the Grant, namely, eight million nine hundred thousand Dollars ($8,900,000) and, for
such purposes, the Recipient shall enter into a subsidiary grant agreement with the
Federation under terms and conditions which shall have been approved by the Bank.
Section 3.02. (a) Except as the Bank shall otherwise agree, procurement of the
goods, works and 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 this Section 3.02 and
Schedule 2 to the Project Agreement, as said provisions may be further elaborated in the
Procurement Plan.
(b)
The Recipient shall update the Procurement Plan in accordance with
guidelines acceptable to the Bank, and furnish such update to the Bank not later than 12
months after the date of the preceding Procurement Plan, for the Bank's approval.
Promptly following each approval by the Bank of the updated Procurement Plan, the
Recipient shall provide a copy of such update to the Federation.
Section 3.03. For the purposes of Section 9.07 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.
Section 3.04. The Recipient and the Bank hereby agree that the obligations set
forth in Sections 9.03, 9.04, 9.05, 9.06, 9.07 and 9.08 of the General Conditions (relating
to insurance, use of goods and services, plans and schedules, records and reports,
maintenance and land acquisition, respectively) in respect of the Project shall be carried
out by the Federation pursuant to Section 2.06 (a) of the Project Agreement.
Section 3.05. The Recipient shall take, or cause to be taken, all measures
necessary to ensure that:
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(a)
for the purposes of carrying out the Project, the Federation shall on-grant
a portion of the proceeds of the GEF Trust Fund Grant received by it from the Recipient
under the Subsidiary Grant Agreement to each Participating Utility under a Sub-Grant
Agreement with such Participating Utility, under terms and conditions that will have been
approved by the Bank. Notwithstanding the foregoing provisions of this paragraph (a),
the Federation shall not enter into a Sub-Grant Agreement with the Zivinice Participating
Utility unless and until local or external funding, in addition to the GEF Trust Fund Grant
hereunder, has been secured and which the Recipient and the Bank shall have agreed
would be sufficient to carry out the Zivinice Sub-Project;
(b)
the Sub-projects are implemented by the PITs in a timely manner in full
compliance with the provisions of the Environmental Management Plans and the
Environmental Framework Policy, as the case may be; and
(c)
the PMT, the PCWM and the PITs are each maintained and adequately
staffed throughout the implementation of the Project, satisfactory to the Bank.
ARTICLE IV
Financial Covenants
Section 4.01. (a) The Recipient, through the PMT, shall maintain a financial
management system, including records and accounts, and prepare financial statements, in
accordance with consistently applied accounting standards acceptable to the Bank,
adequate to reflect the operations, resources and expenditures related to the Project.
(b)
The Recipient, through the PMT, shall:
(i)
have the financial statements referred to in paragraph (a) of this
Section for each fiscal year (or other period agreed to by the
Bank), audited, starting with the fiscal year ending December 31,
2005, in accordance with consistently applied auditing standards
acceptable to the Bank, 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 (or such other
period agreed to by the Bank): (A) certified copies of the
financial statements referred to in paragraph (a) of this Section
for such year (or other period agreed to by the Bank), as so
audited; and (B) an opinion on such statements by said auditors,
in scope and detail satisfactory to the Bank; and
(iii)
furnish to the Bank such other information concerning such
records and accounts, and the audit of such financial statements,
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and concerning said auditors, as the Bank may 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 statements of expenditure, the
Recipient, through the PMT, shall:
(i)
retain, until at least one year after the Bank has received the
audit report for, or covering, 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;
(ii)
enable the Bank's representatives to examine such records; and
(iii)
ensure that such statements of expenditure are included in the
audit for each fiscal year (or other period agreed to by the Bank),
referred to in paragraph (b) of this Section.
Section 4.02. (a) Without limitation upon the Recipient's progress reporting
obligations set out in paragraph 4 of Schedule 3 to this Agreement, the Recipient, through
the PMT, shall prepare and furnish to the Bank a financial monitoring report, in form and
substance satisfactory to the Bank, which:
(i)
sets forth sources and uses of funds for the Project, both
cumulatively and for the period covered by said report, showing
separately funds provided under the GEF Trust Fund Grant, and
explains variances between the actual and planned uses of such
funds;
(ii)
describes physical progress in Project implementation, both
cumulatively and for the period covered by said report, and
explains variances between the actual and planned Project
implementation; and
(iii)
sets forth the status of procurement under the Project, as at the
end of the period covered by said report.
(b)
The first FMR shall be furnished to the Bank not later than 45 days after
the end of the first calendar quarter after the Effective Date, and shall cover the period
from the incurrence of the first expenditure under the Project through the end of such first
calendar quarter; thereafter, each FMR shall be furnished to the Bank not later than 45
days after each subsequent calendar quarter, and shall cover such calendar quarter.
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ARTICLE V
Remedies of the Bank
Section 5.01. Pursuant to Section 6.02 (p) of the General Conditions, the
following additional events are specified:
(a)
the Federation shall have failed to perform any of its obligations under
the Project Agreement or the Subsidiary Grant Agreement;
(b)
as a result of events which have occurred after the date of this
Agreement, an extraordinary situation shall have arisen which shall make it improbable
that the Federation shall be able to perform its obligations under the Project Agreement,
the Subsidiary Grant Agreement, or the Operational Manual, or that the PMT, the
PCWM, or any of the PITs or Participating Utilities shall be able to perform their
respective obligations under this Agreement, the Operational Manual, or any of the Sub-
Grant Agreements, as the case may be;
(c)
the Recipient, the Federation, or any other authority having jurisdiction
shall have taken any action for the dissolution or disestablishment of the PMT, the
PCWM, or any of the PITs or Participating Utilities, or for the suspension of any of their
respective activities; and
(d)
the Operational Manual shall have been amended, suspended, abrogated,
repealed or waived so as to affect materially and adversely, in the opinion of the Bank,
the carrying out of the Project or the realization of its objectives.
Section 5.02. Pursuant to Section 7.01 (k) of the General Conditions, the
following additional event is specified, namely, that the event specified in paragraphs (a),
(c) and (d) of Section 5.01 of this Agreement shall occur and shall continue for a period
of sixty (60) days after notice thereof shall have been given by the Bank to the Recipient.
ARTICLE VI
Effectiveness, Termination
Section 6.01. The following events are specified as additional conditions to the
effectiveness of this Agreement within the meaning of Section 12.01 (c) of the General
Conditions:
(a)
the Project Agreement has been signed on behalf of the Bank and the
Federation, on terms and conditions satisfactory to the Bank;
(b)
the Subsidiary Grant Agreement has been signed on behalf of the
Recipient and the Federation, on terms and conditions satisfactory to the Bank;
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(c)
a Sub-Grant Agreement has been signed on behalf of the Federation and
a Participating Utility, on terms and conditions satisfactory to the Bank; and
(d)
the Operational Manual, satisfactory to the Bank, has been adopted by
the Recipient and the Federation.
Section 6.02. The following are specified as additional matters, with the meaning
of Section 12.02 (c) of the General Conditions, to be included in the opinion or opinions
to be furnished to the Bank:
(a)
that the Project Agreement has been duly authorized or ratified by the
Federation, and is legally binding on the Federation in accordance with its terms;
(b)
that the Subsidiary Grant Agreement referred to in paragraph (b) of
Section 6.01 above has been duly authorized or ratified by the Recipient and the
Federation, and is legally binding upon the Recipient and the Federation in accordance
with its terms; and
(c)
that the Sub-Grant Agreement referred to in paragraph (c) of Section
6.01 above has been duly authorized or ratified by the Federation and the relevant
Participating Utility, and is legally binding upon the Federation and the relevant
Participating Utility in accordance with its terms.
Section 6.03. The date ninety (90) days after the date of this Agreement is hereby
specified for the purposes of Section 12.04 of the General Conditions.
Section 6.04. This Agreement shall continue in effect until the GEF Trust Fund
Grant has been fully disbursed and the parties to this Agreement have fulfilled all their
obligations hereunder.
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ARTICLE VII
Representative of the Recipient; Addresses
Section 7.01. The Minister of Finance and Treasury of the Recipient is
designated as the 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 Finance and Treasury
Trg BiH 1
71000 Sarajevo
Bosnia and Herzegovina
Facsimile:
(387-33) 471-822
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:
Facsimile:
INTBAFRAD 248423
(MCI)
(202)
477-6391
Washington, D.C.
64145 (MCI)
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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 City of Sarajevo, as of the day and year first above written.
BOSNIA AND HERZEGOVINA
By /s/ Ljerka Maric
Authorized Representative
INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT
as an Implementing Agency of the Global Environment Facility
By /s/ Dirk Reinermann
Authorized Representative
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SCHEDULE 1
Withdrawal of the Proceeds of the GEF Trust Fund Grant
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
% of
GEF Trust Fund Grant Allocated
Expenditures
Category
(Expressed in Dollars)
to be Financed
(1) Works
5,730,000
80%
(2)
Goods
1,540,000
100% of foreign
expenditures,
100% of local
expenditures
(ex-factory cost), and
80% of local expenditures
for other items procured
locally
(3) Consultants' services,
1,100,000
100% for foreign
training and audits
consulting
firms and foreign
individual
consultants, and 80% for
local consulting firms and
local individual
consultants,
and 100% for training
(4) Incremental operating costs
200,000
100% until December
31, 2006, and 90%
thereafter
(5) Unallocated
330,000
TOTAL
8,900,000
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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; provided,
however, that if the currency of the Recipient 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";
(c)
the term "Incremental operating costs" means reasonable and necessary
incremental expenditures, as approved by the Bank on the basis of budgets acceptable to
the Bank, incurred by the PMT and the PITs on account of Project implementation,
management and monitoring, including the cost of salaries of PITs' staff, office
equipment and supplies, office equipment maintenance and repair, vehicle operation
(including fuel) and repair, local and international travel, communication, translation and
interpretation, bank charges, and other miscellaneous costs, as may be agreed with the
Bank; and
(d)
the term "Training" means training activities (other than consultants'
services) to be carried out under the Project, including the reasonable and necessary
travel and visa expenses incurred by participants in training workshops and study tours,
as well as lodging, subsistence, local and international per diem allowances, registration,
tuition and facilitators' fees, minor organizational expenses (including costs of stationery,
handouts and training materials), and other expenditures directly relating to the training
workshop and study tour activity, as may be agreed with the Bank.
3.
Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be
made in respect of:
(a)
payments made for expenditures prior to the date of this Agreement;
(b)
expenditures incurred in respect of a Sub-project by a Participating
Utility until the relevant Participating Utility has concluded a Sub-Grant Agreement with
the Federation, satisfactory to the Bank;
(c)
expenditures incurred in respect of a Sub-project by the Zivinice
Participating Utility unless and until local or external funding, in addition to the GEF
Trust Fund Grant hereunder, has been secured and which the Recipient and the Bank
shall have agreed would be sufficient to carry out the Zivinice Sub-Project; and
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(d)
Categories (1) and (2) allocated to Part B of the Project, with the
exception of the Sub-projects to be undertaken by the Participating Utilities in Mostar,
Zivinice, Trnovo, and Odzak, unless an environmental assessment and an environmental
mitigation plan, each satisfactory to the Bank, has been duly completed, prepared and
disclosed for the relevant Sub-project, all in conformity with the requirements of the
Environmental Framework Policy.
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 under contracts for:
(a) goods costing less than $100,000 equivalent per contract; (b) services of individual
consultants costing less than $50,000 equivalent per contract; (c) services of consulting
firms costing less than $100,000 equivalent per contract; and (d) training workshops and
study tours, audit fees, and incremental 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 amount of the GEF Trust
Fund Grant was used in a manner inconsistent 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.
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SCHEDULE 2
Description of the Project
The overall objective of the Project is to further strengthen the capacity of local
utilities and reduce pollution from municipal sources into the Neretva and Bosnia Rivers.
The sub-objectives are to: (i) develop the Wastewater Improvement Plan; (ii) further
strengthen the Bosnia and Herzegovina-Croatia Commission for Water Management,
with coordination from Serbia and Montenegro, to implement the Wastewater
Improvement Plan; (iii) develop and implement high-priority, low-cost Investments; and
(iv) disseminate information in Bosnia and Herzegovina and the region for replication of
Project activities at other priority sites in the Balkans. The global objective of the Project
is to reduce municipal pollution and nutrients from municipal and non point pollution
sources.
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: Action Plan for Reduction of River Pollution in Bosnia and Herzegovina
Support for the preparation of an action plan that would provide the basis for all
further actions for reducing river pollution in Bosnia and Herzegovina, including data
collection and review that would underpin the Wastewater Improvement Plan.
Part B: High Priority Investments
Financing of Sub-projects, through the provision of Sub-Grants to Participating
Utilities, to facilitate high priority, low-cost Investments, and related investments to
Participating Utilities.
Part C: Natural Wastewater Treatment Study
Support for the preparation of a feasibility study in accordance with the rules of
natural wastewater treatment on low-cost natural treatment of wastewater, targeting the
lower Neretva River, and in the area of the lower part of the Bosna River, taking into
account factors such as climatic conditions, hydrogeological conditions (sensitive karst
area) and land management conditions with a view to demonstrating appropriate
investments for low-cost, low-energy treatment for small towns and settlements in
municipalities.
Part D: Project Management
Financing of Project implementation, management and monitoring, including the
provision of technical assistance to finance replication of Project findings in the Balkans
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region, as well as monitoring, updating and implementation of the Wastewater
Improvement Plan, coordination with water utilities and international counterparts from
the Republic of Croatia and the Republic of Montenegro.
Part E: Replication, Information Sharing and Implementation
Financing of: (i) financial management training for institutional strengthening
and capacity building for Participating Utilities, as well as the preparation of annual
business plans for each Participating Utility; (ii) the replication of Project findings in the
Balkans region; and (iii) a public awareness campaign to increase the understanding of
the proposed investments and policy actions.
* * *
The Project is expected to be completed by August 30, 2010.
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SCHEDULE 3
Implementation Program
1.
The Recipient, through the PMT, shall carry out the Project:
(a)
under the overall responsibility of the MOA. The PMT shall be
responsible for overall implementation of the Project, including responsibility for
procurement, financial management, monitoring, reporting, and evaluation. The PITs
shall be responsible for the day-to-day implementation of individual Sub-projects which
each of them shall carry out, as well as the preparation of regular progress and financial
reports concerning such Sub-projects, for delivery to the PMT. The MOA, the PMT, the
PCWM, and the PITs shall each fulfill their respective responsibilities and obligations
under the Project in accordance with the Operational Manual; and
(b)
in accordance with the Environmental Management Plans and the
Environmental Framework Policy and, unless the Association otherwise agrees, shall not
amend, repeal or waive any of the Environmental Management Plans or the
Environmental Framework Policy or any provision of any one thereof.
2.
The Recipient, through the PMT, shall ensure that all measures necessary for the
carrying out of the Environmental Management Plans and the Environmental Framework
Policy are taken in a timely manner.
3.
The Recipient shall adopt and thereafter maintain the Operational Manual, and
shall also maintain the Subsidiary Grant Agreement, in form and content satisfactory to
the Bank, and shall duly perform all its obligations under the Operational Manual and the
Subsidiary Grant Agreement and shall not take or concur in any action which would have
the effect of amending, assigning, abrogating or waiving the Operational Manual or the
Subsidiary Grant Agreement without obtaining the prior approval of the Bank.
4.
The Recipient, through the PMT, shall:
(a)
maintain policies and procedures adequate to enable it to monitor and
evaluate on an ongoing basis, in accordance with indicators agreed upon with the Bank,
the carrying out of the Project and the achievement of the objectives thereof;
(b)
prepare, under terms of reference satisfactory to the Bank, and furnish to
the Bank, on or about February 15, 2008, 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
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(c)
review with the Bank, by May 15, 2008, 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.
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SCHEDULE 4
Special Account
1.
For the purposes of this Schedule:
(a)
the term "eligible Categories" means Categories (1), (2), (3), and (4) set
forth in the table in paragraph 1 of Schedule 1 to this Agreement;
(b)
the term "eligible expenditures" means expenditures in respect of the
reasonable cost of works, goods and services required for the Project and to be financed
out of the proceeds of the GEF Trust Fund Grant allocated from time to time to the
eligible Categories in accordance with the provisions of Schedule 1 to this Agreement;
and
(c)
the term "Authorized Allocation" means the amount of $800,000 to be
withdrawn from the GEF Trust Fund Grant Account and deposited into the Special
Account pursuant to paragraph 3 (a) of this Schedule, provided, however, that unless the
Bank shall otherwise agree, the Authorized Allocation shall be limited to the amount of
$400,000 until the aggregate amount of withdrawals from the GEF Trust Fund Grant
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 be equal to or exceed the
equivalent of $3,000,000.
2.
Payments out of the Special Account shall be made exclusively for eligible
expenditures in accordance with the provisions of this Schedule.
3.
After the Bank has received evidence satisfactory to it that the Special Account
has been duly opened, withdrawals of the Authorized Allocation and subsequent
withdrawals to replenish the Special Account shall be made as follows:
(a)
For withdrawals of the Authorized Allocation, the Recipient shall furnish
to the Bank a request or requests for 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 GEF Trust Fund 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 Schedule for the payment or
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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 Grant 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. All such deposits shall
be withdrawn by the Bank from the GEF Trust Fund Grant
Account under the respective eligible Categories, and in the
respective equivalent amounts, as shall have been justified by
said documents and other evidence.
4.
For each payment made by the 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 Schedule, the Bank shall
not be required to make further deposits into the Special Account:
(a)
if, at any time, the Bank shall have determined that all further
withdrawals should be made by the Recipient directly from the GEF Trust Fund Grant
Account in accordance with the provisions of Article V of the General Conditions and
paragraph (a) of Section 2.02 of this Agreement;
(b)
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 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
GEF Trust Fund Grant Account pursuant to the provisions of Section 6.02 of the General
Conditions; or
(d)
once the total unwithdrawn amount of the GEF Trust Fund Grant
allocated to the eligible Categories, 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 Grant Account of the remaining
unwithdrawn amount of the GEF Trust Fund Grant allocated to the eligible Categories
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
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been satisfied that all such amounts remaining on deposit in the Special Account as of the
date of such notice will be utilized in making payments for eligible expenditures.
6.
(a)
If the Bank shall have determined at any time that any payment out of the
Special Account: (i) was made for an expenditure or in an amount not eligible pursuant to
paragraph 2 of this Schedule; or (ii) was not justified by the evidence furnished to the
Bank, the 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.
(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 paragraphs 6 (a), (b) and (c) of
this Schedule shall be credited to the GEF Trust Fund Grant Account for subsequent
withdrawal or for cancellation in accordance with the relevant provisions of this
Agreement, including the General Conditions.