Page 1 CONFORMED COPY CREDIT NUMBER 3690 UG Project Agreement (Protected Areas Management and Sustainable Use Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and UGANDA WILDLIFE AUTHORITY Dated September 16, 2002 Page 2 CREDIT NUMBER 3690 UG PROJECT AGREEMENT AGREEMENT, dated September 16, 2002, between INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and UGANDA WILDLIFE AUTHORITY (UWA). WHEREAS (A) by the Development Credit Agreement of even date herewith between the Republic of Uganda (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to twenty one million seven hundred thousand Special Drawing Rights (SDR 21,700,000), on the terms and conditions set forth in the Development Credit Agreement, but only on conditions that UWA agrees to undertake such obligations toward the Association as are set forth in this Agreement; (B) by the Global Environment Facility Trust Fund Grant Agreement (GEF Trust Fund Grant Agreement) of even date herewith between the Republic of Uganda (the Recipient) and the 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 Global Environment Facility Trust Fund (GEF Trust Fund) by certain members of the Bank as participants to the GEF, the Bank has agreed to make available to the Recipient an amount of six million four hundred seven thousand Special Drawing Rights (SDR 6,407,000), on terms and conditions set forth in the GEF Trust Fund Grant Agreement; and (C) by a subsidiary agreement to be entered into between the Borrower and UWA, proceeds of the credit provided for under the Development Credit Agreement will be made available to UWA on the terms and conditions set forth in said Subsidiary Agreement; WHEREAS UWA, in consideration of the Association’s entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: Page 3 - 2 - ARTICLE I Definitions Section 1.01. Unless the context otherwise requires, the several terms defined in the Development Credit Agreement, the GEF Trust Fund Grant Agreement, the Preamble to this Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of Part A of the Project Section 2.01. (a) UWA declares its commitment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement, and, to this end, shall carry out Part A of the Project with due diligence and efficiency and in conformity with appropriate administrative, financial, environmental practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for Part A of the Project. (b) Without limitation upon the provisions of paragraph (a) of this Section and except as the Association and UWA shall otherwise agree, UWA shall carry out Part A of the Project in accordance with the Implementation Program set forth in Schedule 1 to this Agreement. Section 2.02. Except as the Association shall otherwise agree, procurement of the goods, works and consultants’ services required for Part A of the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to the Development Credit Agreement. Section 2.03. (a) UWA shall carry out 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 Part A of the Project. (b) For the purposes of Section 9.06 of the General Conditions and without limitation thereto, UWA shall: Page 4 - 3 - (i) prepare, on the basis of guidelines acceptable to the Association and furnish to the Association not later than six (6) months after the Closing Date or such later date as may be agreed for this purpose between the Association and the Borrower, a plan for the future operation of Part A of the Project; and (ii) afford the Association a reasonable opportunity to exchange views with UWA on said plan. Section 2.04. UWA shall duly perform all its obligations under the Subsidiary Agreement. Except as the Association shall otherwise agree, UWA shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the Subsidiary Agreement or any provision thereof. Section 2.05. (a) UWA shall, at the request of the Association, exchange views with the Association with regard to the progress of Part A of the Project, the performance of its obligations under this Agreement and under the Subsidiary Agreement, and other matters relating to the purposes of the Project. (b) UWA shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of Part A of the Project, the accomplishment of the purposes of the Project, or the performance by the Borrower of its obligations under this Agreement and under the Subsidiary Agreement. ARTICLE III Management and Operations of UWA Section 3.01. UWA shall carry on its operations and conduct its affairs in accordance with sound administrative, financial and environmental practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. Section 3.02. UWA shall at all times operate and maintain its equipment and other property, and from time to time, promptly as needed, make all necessary maintenance and renewals thereof, all in accordance with sound engineering, financial and environmental practices. Page 5 - 4 - Section 3.03. UWA shall take out and maintain with responsible insurers, insurance against such risks and in such amounts as shall be consistent with appropriate practice. ARTICLE IV Financial Covenants Section 4.01. (a) UWA shall maintain a financial management system, including records and accounts, and prepare financial statements in a format acceptable to the Association, adequate to reflect the operations, resources and expenditures related to Part A of the Project. (b) UWA shall: (i) have the records, accounts and financial statements referred to in paragraph (a) of this Section for each fiscal year audited, in accordance with auditing standards acceptable to the Association, consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than six months after the end of each such year: (A) certified copies of 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 report of such audit, by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning such records and accounts, and the audit thereof, and concerning said auditors, as the Association may from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of Financial Monitoring Reports, UWA shall: Page 6 - 5 - (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and separate accounts reflecting such expenditures; (ii) retain, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association’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 Financial Monitoring Reports 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. UWA shall prepare and furnish to the Association before or with the first application for withdrawal from the Credit Account and, thereafter, not later than 45 days after the end of each calendar quarter, a Financial Monitoring Report, in form and substance satisfactory to the Association, which: (a) (i) sets forth actual sources and uses of funds for the Project, both cumulatively and for the period covered by said report, and projected sources and uses of funds for the Project for the six-month period following the period covered by said report; and (ii) shows separately expenditures financed out of the proceeds of the Credit during the period covered by said report and expenditures proposed to be financed out of the proceeds of the Credit during the six-month period following the period covered by said report; (b) (i) describes physical progress in Project implementation, both cumulatively and for the period covered by said report; and (ii) explains variances between the actual and previously forecast implementation targets; and Page 7 - 6 - (c) sets forth the status of procurement under the Project and expenditures under contracts financed out of the proceeds of the Credit, as at the end of the period covered by the said report. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 5.02. (a) This Agreement and all obligations of the Association and of UWA thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) the date 20 years after the date of this Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify UWA of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. ARTICLE VI Miscellaneous Provisions Section 6.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand or by mail, , telex or facsimile to the party to which it is required or permitted to be given or made at such party’s address hereinafter specified or at such other address as such party shall have designated by Page 8 - 7 - notice to the party giving such notice or making such request. Deliveries made by facsimile transmission shall also be confirmed by mail. The addresses so specified are: For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: Facsimile: INDEVAS 248423 (MCI) or (202) 477-6391 Washington, D.C. 64145 (MCI) For Uganda Wildlife Authority: Plot # 3 Kintu Rd P. O. Box 3530 Kampala, Uganda Facsimile: 256-41-346291 Section 6.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of UWA may be taken or executed by the Executive Director or such other person or persons as the Executive Director shall designate in writing, and the Executive Director shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 6.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. Page 9 - 8 - IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Theodore Ahlers Acting Regional Vice President UGANDA WILDLIFE AUTHORITY By /s/ Edith Ssempala Authorized Representative Page 10 - 9 - SCHEDULE 1 Implementation Program 1. UWA shall carry out Part A of the Project under the overall supervision of the Permanent Secretary of MTTI. 2. (a) UWA shall not carry out any involuntary resettlement for any people resident within the Protected Areas, or impose any restriction of access to legally designated Protected Areas resulting in adverse impacts on the livelihoods of the people resident within such Protected Areas. (b) For the purposes of the this paragraph: (i) involuntary resettlement includes the involuntary taking of land resulting in relocation or loss of shelter loss or destruction of housing, crops, or other assets or access to assets; or loss of income sources or means of livelihood, whether or not the affected people must move to another location; and (ii) restriction of access includes restriction on use of the resources of the Protected Areas imposed on: (A) people living outside such Protected Areas, but who are dependant on such resources; or (B) people who continue to live inside such Protected Areas during and after Project implementation. (c) Notwithstanding the provisions of (a) and (b) above, UWA may, in accordance with the Wildlife Statute, exercise its right to restrict any new encroachment to, or expansion of settlement in, the Protected Areas. 3. UWA shall: (a) appoint a Financial Manager and an Accountant; and (b) establish a procurement unit with staff having qualifications and experience satisfactory to the Association. 4. UWA shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with the indicators set forth in Schedule 5 to the Development Credit Agreement, the carrying out of Part A of the Project and the achievement of the objectives thereof; (b) prepare, under terms of reference satisfactory to the Association, and furnish to the Association, on or about 24 months after the Effective Date, a report integrating the results of the monitoring and evaluation activities performed pursuant to Page 11 - 10 - paragraph (a) of this Section, on the progress achieved in the carrying out of Part A 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 Part A of the Project and the achievement of the objectives thereof during the period following such date; and (c) review with the Association, no later than 60 days after the date of such report, or such later date as the Association shall request, the report referred to in paragraph (b) of this Section, and, thereafter, take all measures required to ensure the efficient completion of Part A of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of the said report and the Association’s views on the matter.