Page 1 CONFORMED COPY CREDIT NUMBER 2003 PAK (1988 Flood Damage Restoration Project) between ISLAMIC REPUBLIC OF PAKISTAN and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated April 28, 1989 CREDIT NUMBER 2003 PAK DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated April 28, 1989, between ISLAMIC REPUBLIC OF PAKISTAN acting by its President (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS (A) the Borrower, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Association to assist in the financing of the Project; (B) Part B of the Project will be carried out by the Borrower's Province of Punjab (Punjab), Province of Sind (Sind), North West Frontier Province (NWFP) and Province of Baluchistan (Baluchistan), with the Borrower's assistance and, as part of such assistance, the Borrower will make available to Punjab, Sind, NWFP and Baluchistan a portion of the proceeds of the Credit as provided in this Agreement; and WHEREAS the Association has agreed, on the basis, inter alia, Page 2 of the foregoing, to extend the Credit to the Borrower upon the terms and conditions set forth in this Agreement and in the Project Agreement of even date herewith among the Association, Punjab, Sind, NWFP and Baluchistan; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Develop- ment Credit Agreements" of the Association, dated January 1, 1985, with the last sentence of Section 3.02 deleted (the General Condi- tions) constitute an integral part of this Agreement. Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "NHB" means the National Highway Board established under the Borrower's Ministry of Communications and Works; (b) "National Highway System" means the system of highways, bridges and other related structures designated as such pursuant to a decision of the Borrower; (c) "MWP" means the Borrower's Ministry of Water and Power; (d) "FFC" means the Federal Flood Cell referred to in paragraph 2 (a) of Schedule 4 to this Agreement; (e) "Project Agreement" means the agreement between the Association, on the one hand, and Punjab, Sind, NWFP and Balu- chistan, on the other hand, 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; (f) "Punjab" means the Province of Punjab, a political sub- division of the Borrower, or any successor thereto; (g) "Sind" means the Province of Sind, a political sub- division of the Borrower, or any successor thereto; (h) "NWFP" means the North West Frontier Province, a political subdivision of the Borrower, or any successor thereto; (i) "Baluchistan" means the Province of Baluchistan, a political subdivision of the Borrower, or any successor thereto; (j) "Provinces" mean collectively Punjab, Sind, NWFP and Baluchistan, and "Province" means each or any of the Provinces; (k) "P&DB" means the Planning and Development Board of Punjab; (l) "P&DD" means the Planning and Development Department of Sind, NWFP or Baluchistan, as the case may be; (m) "PID" means a Provincial Irrigation Department; (n) "C&WD" means a Provincial Communications and Works Department; (o) "PFDRC" means each or any of the Provincial Flood Damage Restoration Cells referred to in paragraph 2 (b) of Schedule 4 to this Agreement; (p) "NHB Special Account" means the account which NHB shall open and maintain pursuant to the provisions of Section 2.02 (b) Page 3 of this Agreement; (q) "Punjab Special Account" means the account which Punjab shall open and maintain pursuant to the provisions of Section 2.02 (b) of this Agreement and Section 2.01 (c) of the Project Agreement; (r) "Sind Special Account" means the account which Sind shall open and maintain pursuant to the provisions of Section 2.02 (b) of this Agreement and Section 2.01 (c) of the Project Agreement; (s) "NWFP Special Account" means the account which NWFP shall open and maintain pursuant to the provisions of Section 2.02 (b) of this Agreement and Section 2.01 (c) of the Project Agreement; (t) "Baluchistan Special Account" means the account which Baluchistan shall open and maintain pursuant to the provisions of Section 2.02 (b) of this Agreement and Section 2.01 (c) of the Project Agreement; and (u) "Special Accounts" mean collectively the NHB Special Account, the Punjab Special Account, the Sind Special Account, the NWFP Special Account and the Baluchistan Special Account, and "Special Account" means each or any of the Special Accounts. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Devel- opment Credit Agreement, an amount in various currencies equivalent to thirty million six hundred thousand Special Drawing Rights (SDR 30,600,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement for expenditures made (or, if the Association shall so agree, to be made) in respect of the reason- able cost of goods and services required for the Project and to be financed out of the proceeds of the Credit. (b) The Borrower shall, for the purposes of Part A of the Project, cause NHB to open and maintain in dollars a special account, and shall, for the purposes of Part B of the Project, cause the Provinces to open and maintain in dollars special accounts, all in the National Bank of Pakistan on terms and conditions satisfactory to the Association. Deposits into, and payments out of, the Special Accounts shall be made in accordance with the provisions of Schedule 5 to this Agreement. Section 2.03. The Closing Date shall be June 30, 1991 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.04. (a) The Borrower shall pay to the Association a commitment charge on the principal amount of the Credit not withdrawn from time to time at a rate to be set by the Association as of June 30 of each year, but not to exceed the rate of one-half of one percent (1/2 of 1%) per annum. (b) The commitment charge shall accrue: (i) from a date sixty days after the date of this Agreement (the accrual date) to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or cancelled; and (ii) at the rate set as of the June 30 immediately preceding the accrual date or at such other rates as may be set from time to time thereafter pursuant to paragraph (a) above. The rate set as of June 30 in each year shall be applied as of the next payment date in that year specified in Section 2.06 of this Agreement, except that the Page 4 rate set as of June 30, 1988 shall be applied as of July 1, 1988. (c) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without restric- tions of any kind imposed by, or in the territory of, the Bor- rower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Commitment charges and service charges shall be payable semiannually on March 15 and September 15 in each year. Section 2.07. (a) Subject to paragraphs (b) and (c) below, the Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each March 15 and September 15 commencing September 15, 1999 and ending March 15, 2024. Each installment to and including the installment payable on March 15, 2009 shall be one and one-fourth percent (1-1/4%) of such principal amount, and each installment thereafter shall be two and one-half percent (2-1/2%) of such principal amount. (b) Whenever (i) the Borrower's gross national product per capita, as determined by the Association, shall have exceeded $790 in constant 1985 dollars for five consecutive years and (ii) the Bank shall consider the Borrower creditworthy for Bank lending, the Association may, subsequent to the review and approval thereof by the Executive Directors of the Association and after due con- sideration by them of the development of the Borrower's economy, modify the terms of repayment of installments under paragraph (a) above by requiring the Borrower to repay twice the amount of each such installment not yet due until the principal amount of the Credit shall have been repaid. If so requested by the Borrower, the Association may revise such modification to include, in lieu of some or all of the increase in the amounts of such install- ments, the payment of interest at an annual rate agreed with the Association on the principal amount of the Credit withdrawn and outstanding from time to time, provided that, in the judgment of the Association, such revision shall not change the grant element obtained under the above-mentioned repayment modification. (c) If, at any time after a modification of terms pursuant to paragraph (b) above, the Association determines that the Borrower's economic condition has deteriorated significantly, the Association may, if so requested by the Borrower, further modify the terms of repayment to conform to the schedule of installments as provided in paragraph (a) above. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.09. The following are designated as representatives of the Borrower for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions: (a) the Director General, NHB, in respect of Part A of the Project; (b) the Chairman, P&DB, Punjab, in respect of those parts of Part B of the Project for which Punjab is responsible; (c) the Additional Chief Secretary (Development), P&DD, Sind, in respect of those parts of Part B of the Project for which Sind is responsible; Page 5 (d) the Additional Chief Secretary, P&DD, NWFP, in respect of those parts of Part B of the Project for which NWFP is responsible; and (e) the Additional Chief Secretary, P&DD, Baluchistan, in respect of those parts of Part B of the Project for which Baluchistan is responsible. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement, and, to this end: (i) shall carry out Part A of the Project through NHB with due diligence and efficiency and in conformity with appropriate administrative, financial and engineering practices and shall provide, promptly as needed, the funds, facilities, services and other resources required for Part A of the Project; and (ii) without any limitation or restriction upon any of its other obligations under the Development Credit Agreement, shall cause the Provinces to perform in accordance with the provisions of the Project Agreement all the obligations of the Provinces therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable the Provinces to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) Without limitation upon the provisions of paragraph (a) of this Section and except as the Borrower and the Association shall otherwise agree, the Borrower shall, and shall cause the Provinces to, carry out the Project in accordance with the Imple- mentation Program set forth in Schedule 4 to this Agreement. (c) The Borrower shall make available out of the proceeds of the Credit: (i) to Punjab, an amount equivalent to about SDR 17,290,000, for the purposes of those parts of Part B of the Project for which Punjab is responsible; (ii) to Sind, an amount equivalent to about SDR 6,880,000, for the purposes of those parts of Part B of the Project for which Sind is responsible; (iii) to NWFP, an amount equivalent to about SDR 3,250,000, for the purposes of those parts of Part B of the Project for which NWFP is responsible; and (iv) to Baluchistan, an amount equivalent to about SDR 700,000, for the purposes of those parts of Part B of the Project for which Baluchistan is responsible. Section 3.02. Except as the Association shall otherwise agree, procurement of the works and consultants' services required for the Project and to be financed out of the proceeds of the credit shall be governed by the provisions of Schedule 3 to this Agreement. Page 6 Section 3.03. The Borrower and the Association 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 Part B of the Project shall be carried out by the Provinces pursuant to Section 2.03 of the Project Agreement. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of Part A of the Project of the departments or agencies of the Borrower, including NHB, responsible for carrying out Part A of the Project or any part thereof. (b) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditures, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained 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; and (iii) enable the Association's representatives to examine such records. (c) The Borrower shall: (i) have the records and accounts referred to in para- graphs (a) and (b) (i) of this Section and those for the NHB Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than six months after the end of each such year the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the proce- dures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Association such other information concerning said records and accounts and the audit thereof as the Association shall from time to time reasonably request. ARTICLE V Remedies of the Association Section 5.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional events are specified: Page 7 (a) The Provinces shall have failed to perform any of their obligations under the Project Agreement. (b) As a result of events which have occurred after the date of the Development Credit Agreement, an extraordinary situation shall have arisen which shall make it improbable that the Provinces will be able to perform their obligations under the Project Agreement. Section 5.02. Pursuant to Section 7.01 (d) of the General Conditions, the following additional event is specified, namely, that the event specified in paragraph (a) of Section 5.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower. ARTICLE VI Effective Date; Termination Section 6.01. The following is specified as an additional matter, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be furn- ished to the Association, namely, that the Project Agreement has been duly authorized or ratified by the Provinces, and is legally binding upon the Provinces in accordance with its terms. Section 6.02. 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. ARTICLE VII Representatives of the Borrower; Addresses Section 7.01. Except as provided in Section 2.09 of this Agreement, the Secretary to the Government of Pakistan, Economic Affairs Division or any Additional Secretary, Joint Secretary, Deputy Secretary, or Section Officer in that Division of the Borrower is designated as representative of the Borrower 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 Borrower: Economic Affairs Division Islamabad Pakistan Cable address: Telex: ECONOMIC 952-5634 Islamabad For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT), Washington, D.C. 248423 (RCA) or 64145 (WUI) IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have caused this Agreement to be Page 8 signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. ISLAMIC REPUBLIC OF PAKISTAN By /s/ M. Afzal Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ H.E. Kûpp Acting Regional Vice President Europe, Middle East and North Africa SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Civil works 29,000,000 72% (2) Consultants' 540,000 90% services (3) Unallocated 1,060,000 ___________ TOTAL 30,600,000 2. Notwithstanding the provisions of paragraph 1 above, no with- drawals shall be made in respect of payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of SDR 6,120,000, may be made on account of payments made for expenditures before that date but after October 1, 1988. SCHEDULE 2 Description of the Project The objectives of the Project are: (a) to assist the Borrower and the Provinces in carrying out their program of urgent restora- tion of infrastructure damaged by the 1988 floods, and thereby (b) to facilitate the expeditious resumption of vital government services and commerce in the flood-affected areas. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Association may agree upon from time to time to achieve such objectives: Part A: Federal Restoration Works Page 9 Restoration of roads forming part of the National Highway System, including reconstruction of bridges and provision and/or reconstruction of culverts and other related structures. Part B: Provincial Restoration Works Restoration of: (i) irrigation, drainage and flood protection works; and (ii) roads, other than those forming part of the National Highway System, including reconstruction of bridges and provision and/or reconstruction of culverts and other related structures. * * * * * The Project is expected to be completed by December 31, 1990. SCHEDULE 3 Procurement and Consultants' Services Section I: Procurement of Works Part A: Procurement Procedures 1. Except as provided in paragraph 2 below, civil works may be procured under contracts awarded on the basis of competitive bid- ding, advertised locally, in accordance with procedures satisfac- tory to the Association. 2. Civil works, including substantial quantities of earthwork with long leads, underwater excavation, or repair and replacement of hydraulic structures, and estimated to cost less than the equivalent of $12,000,000 in the aggregate, may be carried out by force account. Part B: Review by the Association of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract estimated to cost the equivalent of $200,000 or more, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of a Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract required to be furnished to the Association pursuant to said paragraph 2 (d) shall be furnished to the Association prior to the making of the first payment out of such Special Account in respect of such contract. (b) With respect to each contract not governed by the pre- ceding paragraph, the procedures set forth in paragraphs 3 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of a Special Account, such pro- cedures shall be modified to ensure that the two conformed copies of the contract together with the other information required to be furnished to the Association pursuant to said paragraph 3 shall be furnished to the Association as part of the evidence to be furn- ished pursuant to paragraph 4 of Schedule 5 to this Agreement. (c) The provisions of the preceding subparagraphs (a) and (b) shall not apply to contracts on account of which the Associa- tion has authorized withdrawals from the Credit Account on the basis of statements of expenditure. Such contracts shall be retained in accordance with Section 4.01 (b) (ii) of this Agreement. Page 10 2. The figure of 15% is hereby specified for purposes of para- graph 4 of Appendix 1 to the Guidelines. 3. For the purposes of these provisions, the term "Guidelines" means the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1985. Section II: Employment of Consultants In order to assist NHB and the Provinces in preparing tender documents, procuring contracts and supervising construction, the Borrower shall employ engineering consultants whose qualifica- tions, experience and terms and conditions of employment shall be satisfactory to the Association. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. SCHEDULE 4 Implementation Program 1. Project Implementation: (a) Responsibility for implementation of the Project shall be assigned as follows: (i) for the road works under Part A of the Project, to NHB; (ii) for the irrigation, drainage and flood protection works under Part B (i) of the Project, to each PID; and (iii) for the road works under Part B (ii) of the Project, to each C&WD. (b) NHB, each PID and each C&WD shall, within its sphere of responsibility, inter alia: (i) prepare plans, designs, and tender documents in accordance with approved specifications and procedures; (ii) carry out the restoration works; (iii) maintain separate project accounts; (iv) certify the quantity and quality of completed civil works; (v) prepare withdrawal applications; and (vi) make an appropriate input to the progress reports referred to in paragraph 3 of this Schedule. NHB shall also be responsible, with respect to its part of the Project, for operating its Special Account and for submitting withdrawal applications to the Association. 2. Project Coordination: (a) Federal Flood Cell. At the federal level, a Federal Flood Cell (FFC) in MWP shall coordinate and monitor overall Project implementation. The FFC shall be headed by a Federal Project Coordinator assisted by suitable professional and support staff. The FFC shall, inter alia: (i) appoint the Project consultants; (ii) prepare and submit withdrawal applications to the Association in respect of expenditures for consultants' services; (iii) monitor disbursements and auditing of the Project accounts; (iv) on the basis of the input made by NHB, each PID and each C&WD, prepare and furnish to the Association, in consolidated form, the progress reports referred to in paragraph 3 of this Schedule; and (v) on behalf of the Borrower, prepare and furnish to the Association the Project Completion Report referred in Section 9.06 (e) of the General Conditions. (b) Provincial Flood Damage Restoration Cells. At each provincial level, a Provincial Flood Damage Restoration Cell (PFDRC) in PID shall coordinate overall Project implementation. Page 11 The PFDRC shall be headed by a Provincial Project Coordinator assisted by suitable professional and support staff. The PFDRC shall, inter alia: (i) operate the relevant Special Account and submit withdrawal applications to the Association; (ii) monitor the auditing of the Project accounts; (iii) prepare and furnish to FFC, within 30 days of each reporting period, quarterly and annual progress reports; and (iv) make other appropriate input to the reports referred to in paragraphs 2 (a) (iv) and 3 of this Schedule. 3. Progress Reports: Pursuant to Section 9.06 of the General Conditions, the FFC shall: (a) not later than sixty (60) days after the end of each quarter, beginning with the quarter ending March 31, 1989, furnish to the Association a progress report on the Project for such quarter; and (b) not later than sixty (60) days after the end of each calendar year, beginning with the year ending December 31, 1989, furnish to the Association a progress report on the Project for such year. SCHEDULE 5 Special Accounts 1. For the purposes of this Schedule: (a) the term "eligible Category" means Category (1) 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 goods and services required for the Project and to be financed out of the proceeds of the Credit allocated from time to time to the eligible Category in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means, in respect of NHB, an amount equivalent to $380,000 to be withdrawn from the Credit Account and deposited in the NHB Special Account, in respect of Punjab, an amount equivalent to $4,100,000 to be withdrawn from the Credit Account and deposited in the Punjab Special Account, in respect of Sind, an amount equivalent to $1,600,000 to be withdrawn from the Credit Account and deposited in the Sind Special Account, in respect of NWFP, an amount equivalent to $750,000 to be withdrawn from the Credit Account and deposited in the NWFP Special Account, and in respect of Baluchistan, an amount equivalent to $170,000 to be withdrawn from the Credit Account and deposited in the Baluchistan Special Account, all pursuant to paragraph 3 (a) of this Schedule. 2. Payments out of the Special Accounts shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Association has received evidence satisfactory to it that a Special Account has been duly opened, withdrawals of the relevant Authorized Allocation and subsequent withdrawals to replenish the Special Account shall be made as follows: (a) For withdrawals of the Authorized Allocation, NHB or the concerned Province, as the case may be, shall furnish to the Association a request or requests for a deposit or deposits which do not exceed the aggregate amount of the Authorized Allocation. On the basis of such request or requests, the Association shall, on behalf of NHB or the concerned Province, as the case may be, withdraw from the Credit Account and deposit in the Special Account such amount or amounts as the concerned Province shall have requested. (b) (i) For replenishment of the Special Account, NHB or the concerned Province, as the case may be, shall furnish to the Association requests for deposits Page 12 into the Special Account at such intervals as the Association shall specify. (ii) Prior to or at the time of each such request, NHB or the concerned Province, as the case may be, shall furnish to the Association the documents and other evidence required pursuant to paragraph 4 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Association shall, on behalf of NHB or the concerned Province, as the case may be, withdraw from the Credit Account and deposit into the Special Account such amount as NHB or the concerned Province, as the case may be, shall have requested and as shall have been shown by said documents and other evidence to have been made out of the Special Account for eligible expenditures. All such deposits shall be withdrawn by the Association from the Credit Account under the eligible Category, and in the respective equivalent amounts, as shall have been justified by said documents and other evidence. 4. For each payment made by NHB or the concerned Province, as the case may be, out of a Special Account, NHB or the concerned Province, as the case may be, shall, at such time as the Association shall reasonably request, furnish to the Association 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 Association shall not be required to make further deposits into a Special Account: (a) if, at any time, the Association shall have determined that all further withdrawals should be made by NHB or the concerned Province, as the case may be, directly from the Credit Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or (b) once the total unwithdrawn amount of the Credit allo- cated to the eligible Category for the parts of the Project for which NHB or the concerned Province, as the case may be, is responsible, less the amount of any outstanding special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions with respect to such parts of the Project, shall equal the equivalent of twice the amount of the relevant Authorized Allocation. Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to the eligible Category for such parts of the Project shall follow such procedures as the Association shall specify by notice to NHB or the concerned Province, as the case may be. Such further withdrawals shall be made only after and to the extent that the Association shall have been satisfied that all such amounts remaining on deposit in such Special Account as of the date of such notice will be utilized in making payments for eligible expenditures. 6. (a) If the Association shall have determined at any time that any payment out of a 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 Association, NHB or the concerned Province, as the case may be, shall, promptly upon notice from the Association: (A) provide such additional evidence as the Association may request; or (B) deposit into the Special Account (or, if the Association shall so request, refund to the Association) an amount equal to the amount of such payment or the portion thereof not so Page 13 eligible or justified. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until NHB or the concerned Province, as the case may be, has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association shall have determined at any time that any amount outstanding in a Special Account will not be required to cover further payments for eligible expenditures, NHB or the concerned Province, as the case may be, shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) NHB or the concerned Province, as the case may be, may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in a Special Account. (d) Refunds to the Association made pursuant to paragraphs 6 (a), (b) and (c) of this Schedule shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accord- ance with the relevant provisions of this Agreement, including the General Conditions.