OFFICIAL DOCUMENTS The World Bank 1818 H Street N.W. (202) 473-1000 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Washington, D.C. 20433 Cable Address: INTBAFRAD INTERNATIONAL DEVELOPMENT ASSOCIATION U.S.A. Cable Address: INDEVAS Mr. S. G. Dastidar Controller of Aid Accounts and Audit Department of Economic Affairs, Ministry of Finance 5t' Floor, 'B' Wing Janpath Bhawan, Janpath New Delhi, India 110 001 Dear Sir, Re: IBRD Loan No. 8487-IN (Punjab Rural Water and Sanitation Sector Improvement Project) Additional Instructions: Disbursement I refer to the Loan Agreement between the International Bank for Reconstruction and Development (the "Bank") and India (the "Borrower") for the above-referenced project, dated (x ,I5 ,,The Agreement provides that the Bank may issue additional instructions regarding the withdrawal of the proceeds of Loan No. 8487-IN ("Loan"). This letter ("Disbursement Letter"), as revised from time to time, constitutes the additional instructions. The attached World Bank Disbursement Guidelines for Projects, dated May 1, 2006, ("Disbursement Guidelines") (Attachment 1), are an integral part of the Disbursement Letter. The manner in which the provisions in the Disbursement Guidelines apply to the Loan is specified below. Sections and subsections in parentheses below refer to the relevant sections and subsections in the Disbursement Guidelines and, unless otherwise defined in this letter, the capitalized terms used have the meanings ascribed to them in the Disbursement Guidelines. 1. Disbursement Arrangements (i) Disbursement Methods (section 2). The following Disbursement Methods may be used under the Loan: * Reimbursement * Advance (ii) Disbursement Deadline Date (subsection 3.7). The Disbursement Deadline Date is 4 months after the Closing Date specified in the Loan Agreement. Any changes to this date will be notified by the Bank. (iii) Disbursement Conditions (subsection 3.8). Please refer to the Disbursement Condition(s) in the Loan Agreement, if any. -2- II. Withdrawal of Loan Proceeds (i) Authorized Signatures (subsection 3.1). An authorized signatory letter in the Form attached (Attachment 2) should be furnished to the Bank at the address indicated below providing the name(s) and specimen signature(s) of the official(s) authorized to sign Applications: The World Bank P.O. Box 416 New Delhi 110 001, India Attention: Mr. Onno Ruhl, Country Director, India (ii) Applications (subsections 3.2 - 3.3). Please provide completed and signed applications for withdrawal, together with supporting documents, to the address indicated below: The World Bank No. 11, Taramani Main Road Taramani, Chennai - 600 113 India Attention: Ms. Samvita R. Aritkatla, Finance Officer (iii) Electronic Delivery (subsection 3.4) The Bank may permit the Borrower to electronically deliver to the Bank Applications (with supporting documents) through the Bank's Client Connection, web-based portal. The option to.deliver Applications to the Bank by electronic means may be effected if: (a) the Borrower has designated in writing, pursuant to the terms of subparagraph (i) of this Section, its officials who are authorized to sign and deliver Applications and to receive secure identification credentials ("SIDC") from the Bank for the purpose of delivering such Applications by electronic means; and (b) all such officials designated by the Borrower have registered as users of Client Connection. If the Bank agrees, the Bank will provide the Borrower with SIDC for the designated officials. Following which, the designated officials may deliver Applications electronically by completing Form 2380, which is accessible through Client Connection (https://clientconnection.worldbank.or ). The Borrower may continue to exercise the option of preparing and delivering Applications in paper form. The Bank reserves the right and may, in its sole discretion, temporarily or permanently disallow the electronic delivery of Applications by the Borrower. (iv) Terms and Conditions of Use of SIDC to Process Applications. By designating officials to use SIDC and by choosing to deliver the Applications electronically, the Borrower confirms through the authorized signatory letter its agreement to: (a) abide by the Terms and Conditions of Use of Secure Identification Credentials in connection with Use of Electronic Means to Process Applications and Supporting Documentation ("Terms and Conditions of Use of Secure Identification Credentials") provided in Attachment [3]; and (b) to cause such official to abide by those terms and conditions. (v) Minimum Values of Applications (subsection 3.5). Minimum value of applications for Direct payment and Reimbursement is US$1,000,000. -3 - (vi) Advance (sections 5 and 6). * Type of Designated Accounts (subsection 5.3): One Segregated Account. * Currency of Designated Accounts (subsection 5.4): U.S. Dollar (USD). * Financial Institutions at which the Designated Accounts Will Be Opened (subsection 5.5): Reserve Bank of India * Ceilings (subsection 6.1): US$ 25,000,000. III. Reporting on Use of Loan Proceeds (i) Supporting Documentation (section 4). Supporting documentation should be provided with each application for withdrawal as set out below: * For reporting eligible expenditures paid from Designated Account and Reimbursement: o Interim Unaudited Financial Report submitted on quarterly basis, in the form attached (Attachment [4]); (ii) Frequency of Interim Financial Reports: the period set out in the Loan Agreement for provision of Interim Financial Reports, which is quarterly IV. Other Important Information For additional information on disbursement arrangements, please refer to the Disbursement Handbook available on the Bank's public website at https://www.worldbank.org and its secure website "Client Connection" at https://clientconnection.worldbank.org. Print copies are available upon request. From the Client Connection website, you will be able to prepare and deliver Applications, monitor the near real-time status of the Loan, and retrieve related policy, financial, and procurement information. If you have any queries in relation to the above, please contact the Controllers Department team in Chennai at CTRLN chennai@worldbank.org using the above reference. Yours sincerely, By Authorized Representative -4- Attachments 1. World Bank Disbursement Guidelines for Projects, dated May 1, 2006 2. Form for Authorized Signatures 3. Terms and Conditions of Use of Secure Identification Credentials in connection with Use of Electronic Means to Process Applications and Supporting Documentation ("Terms and Conditions of Use of Secure Identification Credentials"), dated March 1, 2013 4. Interim Unaudited Financial Report 5 Attachment 2 Form of Authorized Signatory Letter [Letterhead] Ministry of Finance [Street address] [DATE] The World Bank 1818 H Street, N.W. Washington, D.C. 20433 United States of America Attention: Mr. Onno Ruhl, Country Director, India Re: Loan No. 8487-IN (Punjab Rural Water and Sanitation Sector Improvement Project) I refer to the Loan Agreement ("Agreement") between the International Bank for Reconstruction and Development (the "Bank") and India (the "Borrower"), dated , providing the above Loan. For the purposes of Section 2.03 of the General Conditions as defined in the Agreement, any J[one] of the persons whose authenticated specimen signatures appear below is authorized on behalf of the Borrower to sign applications for withdrawal [and applications for a special commitment] under this Loan. For the purpose of delivering Applications to the Bank, 2[each] of the persons whose authenticated specimen signatures appears below is authorized on behalf of the Borrower, acting 3[individually] 4[jointly], to deliver Applications, and evidence in support thereof on the terms and conditions specified by the Bank. 5[This confirms that the Borrower is authorizing such persons to accept Secure Identification Credentials (SIDC) and to deliver the Applications and supporting documents to the Bank by electronic means. In full recognition that the Bank shall rely upon such representations and warranties, including without limitation, the representations and ' Instruction to the Borrower: Stipulate if more than one person needs to sign Applications, and how many or which positions, and if any thresholds apply. Please delete this footnote in final letter that is sent to the Bank. 2 Instruction to the Borrower: Stipulate if more than one person needs tojointly sign Applications, if so, please indicate the actual number. Please delete this footnote in final letter that is sent to the Bank. Instruction to the Borrower: Use this bracket if any one of the authorized persons may sign; if this is not applicable, please delete. Please delete this footnote in final letter that is sent to the Bank. 4 Instruction to the Borrower: Use this bracket only if several individuals must jointly sign each Application; if this is not applicable, please delete. Please delete this footnote in final letter that is sent to the Bank. 5 Instruction to the Borrower: Add this paragraph if the Borrower wishes to authorize the listed persons to accept Secure Identification Credentials and to deliver Applications by electronic means; if this is not applicable, please delete the paragraph. Please delete this footnote in final letter that is sent to the Bank. 6 warranties contained in the Terms and Conditions of Use of Secure Identification Credentials in connection with Use of Electronic Means to Process Applications and Supporting Documentation ("Terms and Conditions of Use of SIDC"), the Borrower represents and warrants to the Bank that it will cause such persons to abide by those terms and conditions.] This Authorization replaces and supersedes any Authorization currently in the Bank records with respect to this Agreement. [Name], [position] Specimen Signature: [Name], [position] Specimen Signature: [Name], [position] Specimen Signature: Yours truly, / signed / [Position] 7 Attachment 3 Terms and Conditions of Use of Secure Identification Credentials in connection with Use of Electronic Means to Process Applications and Supporting Documentation March 1, 2013 The World Bank (Bank)' will provide secure identification credentials (SIDC) to permit the Borrower2 to deliver applications for withdrawal and applications for special commitments under the Agreement(s) and supporting documentation (such applications and supporting documentation together referred to in these Terms and Conditions of Use as Applications) to the Bank electronically, on the terms and conditions of use specified herein. SIDC can be either: (a) hardware-based (Physical Token), or (b) software-based (Soft Token). The Bank reserves the right to determine which type of SIDC is most appropriate. A. Identification of Users. 1. The Borrower will be required to identify in a completed Authorized Signatory Letter (ASL) duly delivered to and received by the Bank each person who will be authorized to deliver Applications. The Bank will provide SIDC to each person identified in the ASL (Signatory), as provided below. The Borrower shall also immediately notify the Bank if a Signatory is no longer authorized by the Borrower to act as a Signatory. 2. Each Signatory must register as a user on the Bank's Client Connection (CC) website (https://clientconnection.worldbank.org) prior to receipt of his/her SIDC. Registration on CC will require that the Signatory establish a CC password (CC Password). The Signatory shall not reveal his/her CC Password to anyone or store or record the CC Password in wTitten or other form. Upon registration as a CC user, the Signatory will be assigned a unique identifying account name. B. Initialization of SIDC. 1. Prior to initialization of SIDC by a Signatory, the Signatory will acknowledge having read, understood and agreed to be bound by these Terms and Conditions of Use. "Bank" includes IBRD and IDA. 2 "Borrower" includes the borrower of an IBRD loan, IDA credit, or Project Preparation Facility advance and the recipient of a grant. 8 2. Where a Physical Token is to be used, promptly upon receipt of the Physical Token, the Signatory will access CC using his/her account name and CC Password and register his/her Physical Token and set a personal identification number (PIN) to be used in connection with the use of his/her Physical Token, after which the Physical Token will be initialized for use by the Signatory exclusively for purposes of delivering Applications. Where a Soft Token is to be used, the Signatory will access CC using his/her account name and CC Password and set a personal identification number (PIN) to be used in connection with the use of his/her Soft Token, after which the Soft Token will be initialized for use by the Signatory exclusively for purposes of delivering Applications. Upon initialization of the SIDC, the Signatory will be a "SIDC User". The Bank will maintain in its database a user account (Account) for each SIDC User for purposes of managing the SIDC of the SIDC User. Neither the Borrower nor the SIDC User will have any access to the Account. 3. Prior to first use of the SIDC by the SIDC User, the Borrower shall ensure that the SIDC User has received training materials provided by the Bank in use of the SIDC. C. Use of SIDC. 1. Use of the SIDC is strictly limited to use in the delivery of Applications by the SIDC User in the manner prescribed by the Bank in the Agreement(s) and these Terms and Conditions. Any other use of the SIDC is prohibited. 2. The Bank assumes no responsibility or liability whatsoever for any misuse of the SIDC by the SIDC User, other representatives of the Borrower, or third parties. 3. The Borrower undertakes to ensure, and represents and warrants to the Bank (such representation and warranty being expressly relied upon by the Bank in granting SIDC) that each SIDC User understands and will abide by, these Terms and Conditions of Use, including without limitation the following: 4. Security 4.1. The SIDC User shall not reveal his/her PIN to anyone or store or record the PIN in written or other form. 4.2. The SIDC User shall not allow anyone else to utilize his/her SIDC to deliver an Application to the Bank. 4.3. The SIDC User shall always logout from CC when not using the system. Failure to logout properly can create a route into the system that is unprotected. 4.4. If the SIDC User believes a third party has learned his/her PIN or has lost his/her Physical Token he/she shall immediately notify clientconnection(nworldbank.org. 9 4.5. The Borrower shall immediately notify the Bank at clientconnection wworldbank.org of any lost, stolen or compromised SIDC, and take other reasonable steps to ensure such SIDC are disabled immediately. 5. Reservation of Right to Disable SIDC 5.1. The Borrower shall reserve the right to revoke the authorization of a SIDC User to use a SIDC for any reason. 5.2. The Bank reserves the right, in its sole discretion, to temporarily or permanently disable a SIDC, de-activate a SIDC User's Account or both. 6. Care of Physical Tokens 6.1. Physical Tokens will remain the property of the Bank. 6.2. The Bank will physically deliver a Physical Token to each Signatory designated to receive one in a manner to be determined by and satisfactory to the Bank. 6.3. Physical Tokens contain delicate and sophisticated instrumentation and therefore should be handled with due care, and should not be immersed in liquids, exposed to extreme temperatures, crushed or bent. Also, Physical Tokens should be kept more than five (5) cm from devices that generate electromagnetic radiation (EMR), such as mobile phones, phone-enabled PDAs, smart phones and other similar devices. Physical Tokens should be carried and stored separate from any EMR device. At close range (less than 5 cm), these devices can output high levels of EMR that can interfere with the proper operation of electronic equipment, including the Physical Token. 6.4. Without derogating from these Terms and Conditions of Use, other technical instructions on the proper use and care of Physical Tokens are available at http://www.rsa.com. 7, Replacement 7.1. Lost, damaged, compromised (in terms of 4.5, above) or destroyed Physical Tokens will be replaced at the expense of the Borrower. 7.2. The Bank reserves the right, in its sole discretion, not to replace any Physical Token in the case of misuse, or not to reactivate a SIDC User's Account. 10 Attachment 4 Interim Unaudited Financial Report (Provided separately) Punjab Rural Water Supply and Sanitation Sector Improvement Project Interim Financial Reports (quarterly) Format 1 Report for the quarter ended on (Amount in Rs Lakhs) Cumulative For the Project till Forecast for Particulars Quarter Year till date date next 6 months Opening Balance (A) Receipts (budgetary allocation) Govt. of Punjab Other Receipts/ Income Total Receipts (B) Total Sources (C = A + B) Expenditures by Component A. Transformation - Improved Livability of Villages B. Inclusive Household Water and Sanitation Services C. Improved Water Quality D. Strengthening Institutions and Project Management Total Expenditures (D) Advances to Suppliers/ Others Total Advances (E) Less: Recovery/ Adjustment of Advances (F) Net Advances (G = E - F) Total Uses (H = D + G) Closing Balance (denotes available budget allocation) (I = C - H) Note: Closing Balance will be as per Project Books of Account, as on date of the report Signed: Date: Punjab Rural Water Supply & Sanitation Sector Improvement Project Summary of Fund Released & Expended by GPWSCs Rs Lakhs Report for the Quarter ended...... For the Quarter Year To Date No. of Amount for No. of Amount for GPWSCs to Amount which audit GPWSCs to Amount which audit District which funds released by Community report Balance which funds released by Community report Balance Name released the Project Contribution received Outstanding released the Project Contribution received Outstanding 1 2 3 4 5=2+3-4 6 7 8 9 10=7+8-9 2 3 4 5 6 7 81 9 10 11 12 13 14 151 16 171 181 Total Notes: 1 One row each for each district; summarized information to be provided. Punjab Rural Water Supply and Sanitation Sector Improvement Project Interim Financial Reports (quarterly) Format - 3 World Bank Funds requirement Report for the quarter ended on (Amount in Rs Lakhs) Bank Funds received till date Total Project Uses till date II World Bank Share (total of a and b below) III a. Individual Household Latrines @ 100% b. Project - other than a. above @ 64% Total Project Uses - during the quarter World Bank Share (total of a and b) a. Individual Household Latrines @ 100% b. Project - other than a. above @ 64% Notes: Total Project Uses till date' II ', will be the same as Total Uses' H 'as per Project Report Format 1, Column 4 Signed: Dated: Punjab Rural Water Supply and Sanitation Sector Improvement Project Interim Financial Reports (quarterly) Format - 4 Payments made against Contracts Subject to Prior Review (Amount in Rs Lakhs) Contract Title WBR Date of Name of Supplied Contract - Contarct Contract Reason for Cumulative Amount paid during Contract. 6- Y, Number<3- Banksi Service Provided. SignIng Date amount as Amount difference In payment made current period d completion- assignedby Letter Consultant . . cleared by (actual) contract till last period date (if, the Bank assigning,, the Bank : amount, if any completed) WBR No. Signed: Dated: Punjab Rural Water Supply & Sanitation Sector improvement Project Summary of activities under IHHL component (releases to households) - Format 5 Rs Lakhs Report for the Quarter ended. For the Quarter Year To Date Amount Amount Amount Amount District No. of units - released by No. of units - released by No. of units - released by No. of units - released by Name 1st release the Project 2nd release the Project Total releases 1st release the Project 2nd release the Project Total releases 1 2 3 4 5=2+4 6 7 8 9 10=7+9 2 4 5 6 7 10 13 14 15 16 17 18 Total Notes: I Release defined as release to Individual 2 One row each for each district; summarized Information to be provided. F UTHE WORLD BANK DISBURSEMENT GUIDELINES FOR PROJECTS MAY 2006 WORLD BANK DISBURSEMENT GUIDELINES FOR PROJECTS LOAN DEPARTMENT May 1, 2006 Copyright D 2006 CONTENTS The International Bank for Reconstruction and Development/ THE WORLD BANK 1818 H Street, N.W. Page Washington, D.C. 20433, U.S.A. First Printing: July 2006 1. Purpose .................5.... ................5 2. Disbursement Methods .......................... 6 3. Withdrawal of Loan Proceeds ....................... 6 4. Supporting Documentation Requirements ... ......... 9 5. Designated Accounts....................... 10 6. Terms and Conditions Applicable to Advances........... 12 7. Ineligible Expenditures ............... .......... 14 8. Refunds ........................... .......... 15 3 1 World Bank Disbursement Guidelines for Projects May 1, 2006 1. Purpose 1.1 The purpose of these Guidelines is to set out the Bank's procedures for disbursement of loan proceeds for projects. Specifically, the Guidelines explain (a) the different methods used by the Bank to disburse loan proceeds, (b) the require- ments for withdrawal from the Loan Account, (c) the types of supporting documentation that the borrower may be re- quired to provide to demonstrate the use of loan proceeds for eligible expenditures, (d) the criteria for establishing des- ignated accounts, (e) the terms and conditions applicable to advances, (f) the types of actions that the Bank may take if it determines that loan proceeds are not needed or have been used for ineligible purposes, and (g) the consequence of refunds. "Bank" includes IBRD and IDA; "loan" includes credit and grant: "bor- rower" includes the borrower of an IBRD loan, IDA credit, or Project Prepa- ration Facility advance and the recipient of a grant; and "Loan Agreement" includes the agreement with the Bank providing for a credit, grant, or ad- vance. These Disbursement Guidelines apply to all loans, credits, advances under the Project Preparation Facility, and grants financed under the In- stitutional Development Fund and Global Environment Facility unless oth- erwise provided in Operational Policy 10.20, Global Environment Facility Operations (forthcoming). These Guidelines also apply to other recipient- executed grants financed from trust funds unless, exceptionally, the terms of the agreement with the donor make provision for different requirements. They do not apply to Development Policy loans. 51 WiOULD [.\ \i, Di;Bl I.ENIENI GI IDVl.I \ES roll PI'tOlE 0i 0 M N M M E NU U o Dit-ARTNIENT NI 1, I 200ii 2. Disbursement Methods thorized representative of the borrower (as designated in the Loan Agreement) must furnish to the Bank (a) the name(s) 2.1 The Bank establishes disbursement arrangements for an op- of the official(s) authorized to sign applications for with- eration in consultation with the borrower and taking into drawal and applications for a special commitment (collec- consideration, inter alia, an assessment of the borrower's tively, "Applications"), and (b) the authenticated specimen financial management and procurement arrangements, the signature(s) of the official(s). The borrower must indicate procurement plan and cash flow needs of the operation, and clearly if more than one signature is required on Applica- its disbursement experience with the borrower. tions and must notify the Bank promptly of any changes in signature authority. 2.2 The Bank disburses proceeds from the Loan Account estab- lished for each loan, to or on the order of the borrower, using 3.2 Applications. Applications must be provided to the Bank one or more of the disbursement methods set forth below, as in such form and include such information as the Bank may determined by the Bank. reasonably request. Application forms are available online from the Client Connection Web site at http://clientconnec- (a) Reimbursement: The Bank may reimburse the bor- tion.worldbank.org or from the Bank upon request. rower for expenditures eligible for financing pursuant to the Loan Agreement ("eligible expenditures") that the 3.3 For withdrawal from the Loan Account for advances, the borrower has prefinanced from its own resources. borrower should provide an original signed application for (b) Advance: The Bank may advance loan proceeds into withdrawal. For withdrawal from the Loan Account for re- a designated account of the borrower to finance eligiblethe expenditures as they are incurred and for which sup- sgne aplan for rw er ith n opy porting documents will be provided at a later date (see of sppicu tion 4, "Suportin cocy section 5, "Designated Accounts"). secton , "Dsigate Accunt").mentation Requirements"). For a special commitment from (c) Direct Payment: The Bank may make payments, at the Loan Account, the borrower should provide an original the borrower's request, directly to a third party (e.g., signed application for a special commitment together with supplier, contractor, consultant) for eligible expendi- one copy of the letter of credit. The Bank reserves the right tures. not to accept or review duplicate copies of Applications and (d) Special Commitment: The Bank may pay amounts supporting documents and may at its discretion return or to a third party for eligible expenditures under special destroy the duplicates. commitments entered into, in writing, at the borrower's request and on terms and conditions agreed between the 3.4 Electronic Delivery. The Bank may authorize the bor- Bank and the borrower. rower to use electronic means, in a manner and on terms and conditions specified by the Bank, to deliver Applications and supporting documentation to the Bank. Applications 3. Withdrawal of Loan Proceeds and supporting documentation delivered in accordance with this subsection will be deemed to have been provided to the 3.1 Authorized Signatures. Before loan proceeds may be Bank for the purposes of satisfying the requirements of sub- withdrawn or committed from the Loan Account, the au- sections 3.2 and 3.3 of these Guidelines. 16 7 1 WORLD BAs DISBURSEMENT GUIDELINES Foit PROJECTS S O E M OE N. LOAN DEPARIMENT MAY 1, 2006 3.5 Minimum Value of Applications. The Bank establishes 4. Supporting Documentation Requirements a minimum value for Applications for reimbursement, direct payment, and special commitment. The Bank reserves the 4.1 The borrower provides supporting documentation to the right not to accept Applications that are below such mini- Bank to show that loan proceeds have been or are being mum value. used to finance eligible expenditures. 3.6 Loan Disbursing Period. The Bank processes Appli- 4.2 For special commitments, the commercial bank provides its cations only after the Loan Agreement has been declared confirmation directly to the Bank that conditions for release effective in accordance with the terms of the Loan Agree- of payments committed for withdrawal have been met. ment. The expenditures for which the Applications are made must be: 4.3 7 jpes of Supporting Documentation. The Bank re- quires either copies of the original documents evidencing (a) paid for (i) on or after the date of the Loan Agreement, eligible expenditures ("Records") or summary reports of ex- or (ii) in the case of operations that permit retroactive penditure ("Summary Reports") in such form and substance financing, on or after the earlier date specified in the as the Bank may specify. Records include such documents Loan Agreement for that purpose; and as invoices and receipts. A Summary Report may be either (b) incurred on or before the closing date specified or re- (a) the interim un-audited financial report required under ferred to in the Loan Agreement ("Closing Date"), ex- the Loan Agreement ("Interim Financial Report") or (b) cept as otherwise specifically agreed with the Bank. a statement of expenditure summarizing eligible expendi- tures paid during a stated period ("Statement of Expendi- 3.7 The loan disbursing period ends on the final date established ture"). In al cases, the borrower is responsible for retaining by the Bank for receipt by the Bank of applications for with- the original documents evidencing eligible expenditures and drawal and supporting documentation (the "Disbursement making them available for audit or inspection. Deadline Date"). The Disbursement Deadline Date may be the same as the Closing Date, or up to four months after the 4.4 The Bank determines the types of supporting documentation Closing Date. Normally, to support orderly project comple- that the borrower should provide, taking into consideration tion and closure of the Loan Account, the Bank does not ac- the disbursement method used. The supporting documenta- cept applications for withdrawal or supporting documentation tion may be the following: received after the Disbursement Deadline Date. The borrower should promptly inform the Bank of any expected implemen- (a) For applications for reimbursement: (i) Interim tation delays or exceptional administrative issues before these Financial Reports, (ii) Statements of Expenditure, (iii) dates. The Bank notifies the borrower of any exception that Records, or (iv) Records required by the Bank for spe- the Bank may make to the Disbursement Deadline Date. cific expenditures and Statements of Expenditure for all j other expenditures; 3.8 Disbursement Conditions. If the Loan Agreement con- (b) For reporting on the use of advances: (i) Interim tains a disbursement condition for a specific expenditure cat- Financial Reports, (ii) Statements of Expenditure, (iii) egory, the Bank will disburse loan proceeds for that category Records, or (iv) Records required by the Bank for spe- only after the disbursement condition has been fulfilled and cific expenditures and Statements of Expenditure for all the Bank has notified the borrower to this effect. other expenditures; 18 9 1 W0111i,nI) B\M, DIJ),~SE\IEN1 GI IDELlNF NE Y)H X-T SOO ONESiII. *** LoA\N DI)INIEWix Nk 1,I 2006i (c) For applications for direct payments: Records; (a) Segregated Account: this is an account of the borrower and into which only proceeds of the loan may be deposited; (d) Any other supporting documentation that the Bank or may request by notice to the borrower. (b) Pooled Account: this is an account of the borrower into which the loan proceeds and proceeds of other fi- 4.5 Failure to Provide Audited Financial Statements. If * nancing for the operation (e.g., borrower resources and/ the borrower fails to provide any of the audited Financial or financing by other development partners) may be de- Statements required in accordance with, and within the pe- posited. riod of time specified in, the Loan Agreement, the Bank may at its discretion decide not to accept applications for with- 5.4 Currency of the Designated Account. Designated Ac- drawal supported by Summary Reports, even if such reports counts must be in a currency acceptable to the Bank. In are accompanied by Records. countries that have a freely convertible currency, Designated Accounts may be held in the currency of the borrower or any freely convertible currency. The Bank may also agree 5. Designated Accounts to local currency Designated Accounts when, inter alia, the country's currency (even if not freely convertible) is stable 5.1 The borrower may open one or more designated accounts and the expenditures to be financed are primarily in lo- into which the Bank may, at the borrower's request, de- cal currency. The borrower bears all risks associated with posit amounts withdrawn from the Loan Account for the foreign exchange fluctuations between (a) the currency of purpose of paying for eligible expenditures as they are in- denomination of the loan and that of the borrower's Desig- curred ("Designated Account"). Before the Bank authorizes nated Account, and (b) the currency of denomination of the establishment of a Designated Account, the borrower must borrower's Designated Account and the currency or curren- have adequate administrative capability, internal controls, cies of project expenditures. and accounting and auditing procedures to ensure effective use of the Designated Account. 5.5 Financial Institution. Designated Accounts must be opened and maintained in a financial institution accept- 5.2 The Bank may decide not to permit the use of Designated able to the Bank on terms and conditions acceptable to the Accounts in new projects if the borrower has failed to re- Bank. To be acceptable to the Bank, the financial institution fund undocumented advances in the Designated Account of proposed by the borrower should generally meet all the fol- any other loan to, or guaranteed by, the borrower within lowing requirements: two months after the Disbursement Deadline Date for such loan. (a) be financially sound; (b) be authorized to maintain the Designated Account in 5.3 Type of Designated Account. A Designated Account may the currency agreed between the Bank and the bor- be established in one of the two ways set out below, as ap- rower; propriate for the operation concerned, as determined and (c) be audited regularly, and receive satisfactory audit re- notified by the Bank. ports; 1 10 11 WORU)LAN DN.v 31 )lR,SENIENr G1IDUANUs FoR Puowvi'sN * * a Lox~N DI'AR1TNIENT MAY 1, 2006 (d) be able to execute a large number of transactions at intervals specified by the Bank by notice to the borrower promptly; ("Reporting Period"). The borrower should ensure that all (e) be able to perform a wide range of banking services sat- amounts deposited in the Designated Account are accounted isfactorily; for and their use reported prior to the Disbursement Dead- (f) be able to provide a detailed statement of the Desig-the nf eale Acto;rvd ealdsttmn fteDsg Bank any advances still unaccounted for or remaining in the nated Account; (g) be part of a satisfactory correspondent banking network; Designated Account. and 6.4 Withholding Advances. The Bank is not required to make (h) charge reasonable fees for its services. any deposit into the Designated Account if: 5.6 The Bank reserves the right not to accept a financial insti- (a) The Bank determines that payment of the deposit would tution for the opening and/or maintenance of a Designated result in exceeding the Ceiling (see subsection 6.2, "Ap- Account if such institution has asserted or asserts a claim plications for Advances"); to set off, seize, or attach the proceeds of any Bank loan on (b) The Bank is not satisfied that the borrower's planned deposit in a Designated Account maintained by it. project expenditures justify the deposit. The Bank may, by notice to the borrower, adjust the amount it deposits or withhold further deposits into the Designated Ac- 6. Terms and Conditions Applicable to Advances count until it is satisfied that the financial needs of the project warrant further deposits; 6.1 Ceiling. The Bank notifies the borrower of the maximum (c) The borrower fails to take the action required pursuant amount of loan proceeds that may be on deposit in a Desig- to the determinations made by the Bank under subsec- nated Account (the "Ceiling"). The Bank, at its discretion, tions 7.1 and 7.2 of these Guidelines; may establish the Ceiling as either (a) a fixed amount, or (b) (d) The borrower fails to provide any of the audited Finan- an amount that is adjusted from time to time during project cial Statements required in accordance with, and within implementation based on periodic forecasts of project cash the period of time specified in, the Loan Agreement; or wit(e) The Bank determines that all further withdrawals of 6.2 Applications for Advances. The borrower may apply for loan proceeds should be made by the borrower directly projte warant fccute deosis an advance in an amount up to the Ceiling less the aggre- to the Loanacion or gate amount of those advances previously received by the (f) The Bank has notified the borrower of its intention to borrower for which the borrower has not yet provided sup- suspend in whole or in part the borrower's right to make porting documentation. Normally, to support orderly closure withdrawals from the Loan Account. of the Loan Account, the Bank does not advance loan pro- ceeds into the Designated Account after the Closing Date. 6.5 Excess Advances. If at any time the Bank determines that any amount deposited in the Designated Account will not be 6.3 Frequency of Reporting Eligible Expenditures Paid required to cover further payments for eligible expenditures from the Designated Account. The borrower reports on ("Excess Amount"), it may, at its discretion, require the the use of loan proceeds advanced to the Designated Account borrower to take one of the two actions listed below. Upon 1 12 13 1 WAoi,iu) B.Am, DitfIII:F~ Gt i[)I.i\lm Imoi P * * * p * LoX N Di.mrirvi\ NhN~ 1. 2006i notification by the Bank, the borrower must promptly take (c) Refund an equivalent amount to the Bank; or the action requested: (d) Exceptionally, provide substitute documentation evi- dencing other eligible expenditures. (a) Provide evidence satisfactory to the Bank within a pe- riod specified by the Bank that the Excess Amount will be used to pay for eligible expenditures. If the evidence 8. Refunds is not furnished within the time period specified, the borrower must promptly refund the Excess Amount to the Bank or 8.1 Borrower Decision to Refund. The borrower may, upon notice to the Bank, refund all or any amount of the loan on (b) Refund the Excess Amount promptly. deposit in the Designated Account to the Bank for credit to the Loan Account. 7. Ineligible Expenditures 8.2 Consequence of Refunds. The Bank shall determine whether refunds made to the Bank in accordance with sec- 7.1 Ineligible Expenditures Generally. If the Bank deter- tions 6 and 7 and subsection 8.1 of these Disbursement mines that any amount of the loan was used to pay for an Guidelines will be credited to the Loan Account for subse- expenditure that is not eligible pursuant to the Loan Agree- quent withdrawal or for cancellation. Borrowers should be ment ("ineligible expenditure"), the Bank may, at its dis- aware that refunds of loan proceeds may result in swap ter- cretion, require the borrower to take one of the two actions mination fees and/or unwinding costs for amounts for which listed below. Upon notification by the Bank, the borrower the interest rate basis or currency has been converted or must promptly take the action requested: hedged. (a) Refund an equivalent amount to the Bank; or 8.3 Other Obligations Unaffected by Refunds. Refunds of (b) Exceptionally, provide substitute documentation evi- amounts of the loan do not affect any remedies of the Bank dencing other eligible expenditures. under the Loan Agreement. 7.2 Ineligible Expenditures Paid from the Designated Account. If the Bank determines that any payment out of the Designated Account was not justified by the evidence furnished to the Bank or was made for an ineligible expen- diture, the Bank may, at its discretion, require the borrower to take one of the actions listed below. Upon notification by the Bank, the borrower must promptly take the action requested: (a) Provide the additional evidence requested by the Bank; (b) Deposit an equivalent amount into the Designated Ac- count; 1 14 15 1 ．口•■口口口口口口■■■■■戶 - ••．■•■■■•．■••■••一，•目國口■．• O 二鳥 & \/C 藝：姿醒 〔曄〕〕＿, &－〞－一潤 一江江＇r二一 〉安亡一斗斤 &＇化一一二＿ 一滷江》C」二耳 一訕～J 一」一一一 ＿二一工化二 一＇,＇、 一”＇一＇&~ 函 .