Common use of Special Account Clause in Contracts

Special Account. The Borrower may open and maintain a special deposit account, on terms and conditions satisfactory to the Association. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made in accordance with the provisions of the Annex to this Schedule1 (Report-based Disbursements). Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: if the Association, at any time, is not satisfied that the reports referred to in Part A.4 of this Schedule adequately provide the information required for Report-based Disbursements; if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (c) of the Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: (i) the records and accounts for the Special Account; or (ii) the records and accounts reflecting expenditures with respect to which withdrawals were Report-based Disbursements.

Special Account. 1. The Borrower may open and maintain in Dollars a special deposit accountaccount in the Reserve Bank of India, on terms and conditions satisfactory to the Association, including appropriate protection against set-off, seizure and attachment. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made as follows: (a) if the Borrower is not making Report-based Disbursements, withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule 1; and (b) if the Borrower is making Report-based Disbursements), withdrawals shall be made in accordance with the provisions of Annex B to this Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, Association at any time, is not satisfied that the reports referred to in Part A.4 A.5 of this Schedule 1 adequately provide the information required for Report-based Disbursements; ; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower or the Project States shall have failed to furnish to the Association, within the period of time specified in in: (A) Section 4.01 4.01(b)(ii) of this Agreement; (bB) Section 3.01(b)(ii) or (cSection 3.01(c)(ii) of the Project Agreement; or (C) Section 3.02(b) of the Project Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section Sections. 5. The Association shall not be required to make further deposits into the Special Account in respect accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the audit of: Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (ia) If the records and accounts Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association, such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association, all or any portion of the funds on deposit in the Special Account; . (d) Refunds to the Association, made pursuant to subparagraphs (a), (b) or (iic) of this paragraph 6 shall be credited to the records and accounts reflecting expenditures Credit Account for subsequent withdrawal or for cancellation in accordance with respect to which withdrawals were Report-based Disbursements.the provisions of this Agreement. For the purposes of this Annex:

Special Account. 1. The Borrower Recipient may open and maintain in Dollars a special deposit accountaccount in its Central Bank, on terms and conditions satisfactory to the Association. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Grant Account of amounts to be deposited into the Special Account shall be made as follows: (a) if the Recipient is not making Report-based Disbursements, withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule 1; and (b) if the Recipient is making Report-based Disbursements), withdrawals shall be made in accordance with the provisions of Annex B to this Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower Recipient out of the Special Account, the Borrower Recipient 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. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, at any time, is not satisfied that the reports referred to in Part A.4 A.5 of this Schedule 1 adequately provide the information required for Report-based Disbursements; ; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower Recipient directly from the Credit Grant Account; or or (c) if the Borrower Recipient shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (cii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: (iA) the records and accounts for the Special Account; or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Report-based DisbursementsDisbursements or were made on the basis of statements of expenditure, as the case may be. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association 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 Grant Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Recipient of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Recipient shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association 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 Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Recipient shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Recipient may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to subparagraph (a), (b) or (c) of this paragraph 6 shall be credited to the Grant Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Grant Agreement. 1. For the purposes of this Annex, the term “Authorized Allocation” means the amount of $1,500,000 to be withdrawn from the Grant Account and deposited into the Special Account pursuant to paragraph 2 of this Annex. 2. 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 Association a request or requests for deposit into the Special Account of an amount or amounts which in the aggregate do not exceed the Authorized Allocation. On the basis of each such request, the Association shall, on behalf of the Recipient, withdraw from the Grant Account and deposit into the Special Account such amount as the Recipient shall have requested. (b) For replenishment of the Special Account, the Recipient shall furnish to the Association requests for deposit into the Special Account at such intervals as the Association shall specify. Prior to or at the time of each such request, the Recipient shall furnish to the Association the documents and other evidence required pursuant to Part B.3 of Schedule 1 to this Agreement for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Association shall, on behalf of the Recipient, withdraw from the 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. Each such deposit into the Special Account shall be withdrawn by the Association from the Grant Account under one or more of the Eligible Categories. 3. The Association shall not be required to make further deposits into the Special Account, once the total unwithdrawn amount of the Grant minus the total amount of all outstanding special commitments entered into by the Association 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 Grant Account of the remaining unwithdrawn amount of the Grant shall follow such procedures as the Association shall specify by notice to the Recipient. 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 the Special Account as of the date of such notice will be utilized in making payments for Eligible Expenditures. SCHEDULE 1 1. Withdrawals from the Grant Account shall be deposited by the Association into the Special Account in accordance with the provisions of Schedule 1 to this Agreement. Each such deposit into the Special Account shall be withdrawn by the Association from the Grant Account under one or more of the Eligible Categories. 2. Upon receipt of each application for withdrawal of an amount of the Grant, the Association shall, on behalf of the Recipient, withdraw from the Grant Account and deposit into the Special Account an amount equal to the lesser of: (a) the amount so requested; and (b) the amount which the Association has determined, based on the reports referred to in Part A.5 of this Schedule 1 applicable to such withdrawal application, is required to be deposited in order to finance Eligible Expenditures during the six-month period following the date of such reports.

Special Account. 1. The Borrower may shall open and maintain in a commercial bank acceptable to the Association, a special deposit account, account on terms and conditions satisfactory to the Association, including appropriate protection against set-off, seizure and attachment. After Except as the Association has received evidence satisfactory may otherwise specify by notice to it that the Special Account has been openedBorrower, all withdrawals from the Credit Account of amounts to shall be deposited by the Association into the Special Account shall be made in accordance with the provisions of the Annex to this Schedule1 (Report-based Disbursements)Schedule. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 2. Except as the Association shall otherwise agree, after the Association has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made as follows: (a) Each application for withdrawal from the Credit Account shall be supported by a Project Management Report. (b) Upon receipt of each application for withdrawal of an amount of the Credit, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account an amount equal to the lesser of: (i) the amount so requested; and (ii) the amount which the Association has determined, based on the Project Management Report accompanying said application, is required to be deposited in order to finance Eligible Expenditures during the six-month period following the date of such report; provided, however, that the amount so deposited, when added to the amount indicated by said report to be remaining in the Special Account, shall not exceed the equivalent of $ 4,000,000. Each such deposit into the Special Account shall be withdrawn by the Association from the Credit Account under one or more of the Special Account’s Eligible Categories. 3. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, Association determines at any time, is time that any Project Management Report does not satisfied that the reports referred to in Part A.4 of this Schedule adequately provide the information required for Report-based Disbursements; pursuant to Section 4.02 of this Agreement; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, Association within the period of time specified in Section 4.01 (b) or (cb)(ii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: of (iA) the records and accounts for the Special Account; Account or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Reportmade on the basis of Project Management Reports. 4. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-based Disbursementsmonth period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to sub-paragraph (a), (b) or (c) of this paragraph 5 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Development Credit Agreement. The objective of the Project is to assist the Borrower to improve revenue collection within its territories by: (i) improving the legal framework for tax collection and administration; (ii) broadening the tax base within the jurisdiction of the Borrower; and (iii) strengthening the capacity of the TRA in order to increase its efficiency and effectiveness in tax collection. 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: Improving the Legal Framework 1. Updating, amending, consolidating and, where necessary, enacting new laws and regulations related to taxes and customs in order to: (a) reflect the socio-economic and other changes that have occurred in the territory of the Borrower; (b) rationalize the number of deductions, exemptions and concessions granted to tax payers and simplify procedural requirements; (c) increase the level of sanctions provided for in the Borrower’s tax laws in order to reduce the incidence of tax evasion; (d) establish a legal and regulatory framework for a Taxpayer Identification Number (TIN), including provisions to ensure that it is used universally and consistently; and (e) establish a legal framework for a consolidated tax claim appeals machinery independent of the TRA. 2. Publishing and distributing the laws referred to in the previous paragraph in order to facilitate the work of the TRA in collecting tax revenues and to facilitate voluntary compliance by informing tax payers of the relevant legal obligations. Part B: Broadening the Tax Base 1. Carrying out surveys by the TRA and other agencies of the Borrower involved in tax collection in order to identify potential tax payers and to identify new areas of economic activity to be taxed. 2. Developing a system for the sharing of information related to tax collection between the various agencies of the Borrower. 3. Establishment of the TIN, including acquisition of computer hardware and software and provision of technical advisory services and staff training. Part C: Strengthening the Institution Strengthening the capacity of the TRA to collect taxes and to administer tax revenue (including strengthening its investigation, audit and assessment capabilities) through: 1. introducing computerized management and operations systems to all TRA departments, including acquisition of computer and other equipment and training of staff required to operate such equipment; and 2. providing training to TRA staff, implementing the salary structure and incentive scheme referred to in Section 6.01 (e) of this Agreement and introducing performance contracts.

Special Account. 1. The Borrower Recipient may open and maintain in Taka a special deposit account, on terms and conditions satisfactory to the AssociationAssociation for carrying out the Project. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Grant Account of amounts to be deposited into the Special Account shall be made as follows: (a) if the Recipient is not making Report-based Disbursements, withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule 1; and (b) if the Recipient is making Report-based Disbursements), withdrawals shall be made in accordance with the provisions of Annex B to this Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower Recipient out of the Special Account, the Borrower Recipient 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. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, at any time, is not satisfied that the reports referred to in Part A.4 A.5 of this Schedule 1 adequately provide the information required for Report-based Disbursements; ; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower Recipient directly from the Credit Grant Account; or or (c) if the Borrower Recipient shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (cb)(ii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: (iA) the records and accounts for the Special Account; or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Report-based DisbursementsDisbursements or were made on the basis of statements of expenditure, as the case may be. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association 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 Grant Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Recipient of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Recipient shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association 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 Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Recipient shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Recipient may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to subparagraph (a), (b) or (c) of this paragraph 6 shall be credited to the Grant Account for subsequent withdrawal or for cancellation in accordance with the provisions of this Grant Agreement. 1. For the purposes of this Annex, the term “Authorized Allocation” means the amount of Taka 150,000,000 to be withdrawn from the Grant Account and deposited into the Special Account pursuant to paragraph 2 of this Annex provided, however, that unless the Association shall otherwise agree, the Authorized Allocation shall be limited to an amount equivalent to Taka 90,000,000 until the aggregate amount of withdrawals from the Grant Account allocated to Categories (1) through (9) plus the total amount of all outstanding special commitments entered into by the Association pursuant to Section 5.02 of the General Conditions shall be equal to or exceed the equivalent of SDR 7,000,000. 2. 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 Association a request or requests for deposit into the Special Account of an amount or amounts, which in the aggregate do not exceed the Authorized Allocation. On the basis of each such request, the Association shall, on behalf of the Recipient, withdraw from the Grant Account and deposit into the Special Account such amount as the Recipient shall have requested. (b) For replenishment of the Special Account, the Recipient shall furnish to the Association requests for deposit into the Special Account at such intervals, as the Association shall specify. Prior to or at the time of each such request, the Recipient shall furnish to the Association the documents and other evidence required pursuant to Part B.3 of Schedule 1 to this Agreement for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Association shall, on behalf of the Recipient, withdraw from the 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. Each such deposit into the Special Account shall be withdrawn by the Association from the Grant Account under one or more of the Eligible Categories. 3. The Association shall not be required to make further deposits into the Special Account, once the total unwithdrawn amount of the Grant minus the total amount of all outstanding special commitments entered into by the Association 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 Grant Account of the remaining unwithdrawn amount of the Grant shall follow such procedures as the Association shall specify by notice to the Recipient. 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 the Special Account as of the date of such notice will be utilized in making payments for Eligible Expenditures. 1. Withdrawals from the Grant Account shall be deposited by the Association into the Special Account in accordance with the provisions of Schedule 1 to this Agreement. Each such deposit into the Special Account shall be withdrawn by the Association from the Grant Account under one or more of the Eligible Categories.

Special Account. 1. The Borrower may open and maintain in Dollars a special deposit accountaccount in its Central Bank, on terms and conditions satisfactory to the Association. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made as follows: (a) if the Borrower is not making Report-based Disbursements, withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule 1; and (b) if the Borrower is making Report-based Disbursements), withdrawals shall be made in accordance with the provisions of Annex B to this Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, at any time, is not satisfied that the reports referred to in Part A.4 A.5 of this Schedule 1 adequately provide the information required for Report-Report- based Disbursements; ; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (cii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: (iA) the records and accounts for the Special Account; or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Report-based DisbursementsDisbursements or were made on the basis of statements of expenditure, as the case may be. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to subparagraph (a), (b) or (c) of this paragraph 6 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Credit Agreement. 1. For the purposes of this Annex, the term “Authorized Allocation” means the amount of US$1,000,000 to be withdrawn from the Credit Account and deposited into the Special Account pursuant to paragraph 2 of this Annex, provided, however, that unless the Association shall otherwise agree, the Authorized Allocation shall be limited to an amount equivalent to US$500,000 until the aggregate amount of withdrawals from the Credit Account plus the total amount of all outstanding special commitments entered into by the Association pursuant to Section 5.02 of the General Conditions shall be equal to or exceed the equivalent of SDR 1,000,000.

Special Account. 1. The Borrower may shall open and maintain in Dollars a special deposit accountaccount in the Reserve Bank of India, on terms and conditions satisfactory to the Association. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made in accordance with the provisions of the Annex A to this Schedule1 (Report-based Disbursements)Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, at any time, is not satisfied that the reports referred to in Part A.4 A.5 of this Schedule 1 adequately provide the information required for Report-Report- based Disbursements; ; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (c4.01(b)(ii) of the Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: (i) the records and accounts for the Special Account; or (ii) the records and accounts reflecting expenditures with respect to which withdrawals were Report-based Disbursements. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to subparagraph (a), (b) or (c) of this paragraph 6 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Development Credit Agreement. 1. Withdrawals from the Credit Account shall be deposited by the Association into the Special Account in accordance with the provisions of Schedule 1 to this Agreement. Each such deposit into the Special Account shall be withdrawn by the Association from the Credit Account under one or more of the Eligible Categories. 2. Upon receipt of each application for withdrawal of an amount of the Credit, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account an amount equal to the lesser of: (a) the amount so requested; and (b) the amount which the Association has determined, based on the reports referred to in Part A.5 of this Schedule 1 applicable to such withdrawal application, is required to be deposited in order to finance Eligible Expenditures during the six-month period following the date of such reports.

Special Account. 1. The Borrower may shall open and maintain in dollars a special deposit accountaccount in Bank of Bangladesh, on terms and conditions satisfactory to the Association. After Except as the Association has received evidence satisfactory may otherwise specify by notice to it that the Special Account has been openedBorrower, all withdrawals from the Credit Account of amounts to shall be deposited by the Association into the Special Account shall be made in accordance with the provisions of the Annex to this Schedule1 (Report-based Disbursements)Schedule. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 2. Except as the Association shall otherwise agree, after the Association has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made as follows: (a) Each application for withdrawal from the Credit Account shall be supported by a Project Management Report. (b) Upon receipt of each application for withdrawal of an amount of the Credit, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account an amount equal to the lesser of: (i) the amount so requested; and (ii) the amount which the Association has determined, based on the Project Management Report accompanying said application, is required to be deposited in order to finance Eligible Expenditures during the six-month period following the date of such report; provided, however, that the amount so deposited, when added to the amount indicated by said report to be remaining in the Special Account, shall not exceed the equivalent of $15,000,000. Each such deposit into the Special Account shall be withdrawn by the Association from the Credit Account under one or more of the Special Account’s Eligible Categories. 3. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, Association determines at any time, is time that any Project Management Report does not satisfied that the reports referred to in Part A.4 of this Schedule adequately provide the information required for Report-based Disbursements; pursuant to Section 4.02 of this Agreement; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, Association within the period of time specified in Section 4.01 (b) or (cii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: of (iA) the records and accounts for the Special Account; Account or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Reportmade on the basis of Project Management Reports. 4. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-based Disbursementsmonth period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to sub-paragraph (a), (b) or (c) of this paragraph 5 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Development Credit Agreement. The objective of the Project is to improve urban environment, infrastructure and services, and, to that end, to: (a) strengthen the institutional capacity of selected municipalities and city corporations; (b) improve resource allocation and fiscal discipline; and (c) support governmental efforts to reduce urban poverty and improve the environmental conditions of urban communities. 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: Infrastructure Development Financing through loans and/or grants to municipalities of: (i) specific development projects within the municipal infrastructure and services sector for: (a) rehabilitation of existing water supply systems in about 12 municipalities, including urgent works relating to hydrants, valve ▇▇▇▇▇▇▇▇ and overhead tanks; (b) carrying out of sanitary works, including construction of about 47 public toilets in about 15 municipalities and a pilot small-bore sewerage system in the city corporation of Khulna; (c) upgrading and rehabilitation of about 220 km. of urban roads and about 37 km. of urban drains; (d) construction of and/or rehabilitation of bus/truck terminals in about 14 municipalities and in the city corporations of Khulna and Rajshahi; (e) upgrading and/or rehabilitation of municipal markets in about 14 municipalities and 2 city corporations; (f) carrying out of slum improvement works in the city corporation of Khulna and in about 5 municipalities, including the provision of improved water supply and on-site sanitary facilities, footpaths and street lighting; (g) provision of improved primary solid waste collection facilities, including: (i) communal bins, handcarts and rickshaw vans in about 14 municipalities;

Special Account. 1. The Borrower may open and maintain in Dollars a special deposit accountaccount in BOU, on terms and conditions satisfactory to the Association. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made as follows: (a) if the Borrower is not making Report-based Disbursements, withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule 1; and (b) if the Borrower is making Report-based Disbursements), withdrawals shall be made in accordance with the provisions of Annex B to this Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, at any time, is not satisfied that the reports referred to in Part A.4 A.5 of this Schedule 1 adequately provide the information required for Report-Report- based Disbursements; ; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (cii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: (iA) the records and accounts for the Special Account; or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Report-based DisbursementsDisbursements or were made on the basis of statements of expenditure, as the case may be. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower and the Guarantor of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower and the Guarantor of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to subparagraph (a), (b) or (c) of this paragraph 6 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Credit Agreement. 1. For the purposes of this Annex, the term “Authorized Allocation” means the amount of $1,000,000 to be withdrawn from the Credit Account and deposited into the Special Account pursuant to paragraph 2 of this Annex.

Special Account. 1. The Borrower may open and maintain in Dollars a special deposit accountaccount in the Maldives Monetary Authority or in a commercial Bank acceptable to the Association, on terms and conditions satisfactory to the Association, including appropriate protection against set-off, seizure and attachment. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Account Financing Accounts of amounts to be deposited into the Special Account shall be made in accordance with the provisions of the Annex to this Schedule1 Schedule 1 (Report-based Disbursements). 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, at any time, is not satisfied that the reports referred to in Part A.4 A.3 of this Schedule 1 adequately provide the information required for Report-Report- based Disbursements; ; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit AccountFinancing Accounts; or or (c) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (cb)(ii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: (iA) the records and accounts for the Special Account; or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Report-based Disbursements. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower and the Guarantor of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account or the Grant Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower and the Guarantor of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to subparagraphs (a), (b) or (c) of this paragraph 6 shall be credited to the Credit Account or the Grant Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Development Financing Agreement. 1. Withdrawals from the Credit Account and the Grant Account shall be deposited by the Association into the Special Account in accordance with the provisions of Schedule 1 to this Agreement. Each such deposit into the Special Account shall be withdrawn by the Association from the Credit Account or the Grant Account under one or more of the Eligible Categories. 2. Upon receipt of each application for withdrawal of an amount of the Credit or the Grant, the Association shall, on behalf of the Borrower, withdraw from the Credit Account or the Grant Account and deposit into the Special Account an amount equal to the lesser of: (a) the amount so requested; and (b) the amount which the Association has determined, based on the reports referred to in Part A.3 of this Schedule 1 applicable to such withdrawal application, is required to be deposited in order to finance Eligible Expenditures during the six-month period following the date of such reports.

Special Account. 1. The Borrower may shall open and maintain in Dollars a separate special deposit accountaccount in a commercial bank specifically authorized for this purpose by the Bangko Sentral ng Pilipinas, on terms and conditions satisfactory to the AssociationBank, including appropriate protection against set-off, seizure and attachment. 2. After the Association Bank has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Loan Account of amounts amount to be deposited into the Special Account shall be made as follows: (a) until the Bank shall have received (i) the first Project Management Report referred to in Section 4.02(b) of this Agreement and (ii) a request from the Borrower for withdrawal on the basis of Project Management Reports, withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule 1; and (Report-based Disbursements)b) upon receipt by the Bank of a Project Management Report pursuant to Section 4.02(b) of this Agreement, accompanied by a request from the Borrower for withdrawals on the basis of Project Management Reports, all further withdrawals shall be made in accordance with the provisions of Annex B to this Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower shall, at such time as the Association Bank shall reasonably request, furnish to the Association Bank such documents and other evidence showing that such payment was made exclusively for Eligible Expenditures. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association Bank shall not be required to make further deposits into the Special Account: : (a) if the Association, Bank determines at any time, is time that any Project Management Report does not satisfied that the reports referred to in Part A.4 of this Schedule adequately provide the information required for Report-based Disbursements; pursuant to Section 4.02 of this Agreement; (b) if the Association Bank determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Loan Account; or or (c) if the Borrower shall have failed to furnish to the Association, Bank within the period of time specified in Section 4.01 (b) or (c4.01(b)(ii) of the this Agreement, any of the audit reports required to be furnished to the Association Bank pursuant to said Section in respect of the audit of: of (iA) the records and accounts for the Special Account; Account or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Reportmade on the basis of Project Management Reports. 5. The Bank shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Bank shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Loan Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Bank shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Bank determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Bank, the Borrower shall, promptly upon notice from the Bank, provide such additional evidence as the Bank may request, or deposit into the Special Account (or, if the Bank shall so request, refund to the Bank) an amount equal to the amount of such payment. Unless the Bank shall otherwise agree, no further deposit by the Bank into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Bank determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-based Disbursementsmonth period following such determination, the Borrower shall, promptly upon notice from the Bank, refund to the Bank such outstanding amount. (c) The Borrower may, upon notice to the Bank, refund to the Bank all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Bank made pursuant to sub-paragraph (a), (b) or (c) of this paragraph 6 shall be credited to the Loan Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Loan Agreement. 1. For the purposes of this Annex:

Special Account. 1. The Borrower may open and maintain in Dollars a special deposit accountaccount in its central bank, on terms and conditions satisfactory to the Association. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Account Financing Accounts of amounts to be deposited into the Special Account shall be made as follows: (a) if the Borrower is not making Report-based Disbursements, withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule 1; and (b) if the Borrower is making Report-based Disbursements), withdrawals shall be made in accordance with the provisions of Annex B to this Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, at any time, is not satisfied that the reports referred to in Part A.4 A.5 of this Schedule 1 adequately provide the information required for Report-based Disbursements; ; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Financing Account; or or (c) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (cb)(ii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: (iA) the records and accounts for the Special Account; or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Report-based DisbursementsDisbursements or were made on the basis of statements of expenditure, as the case may be. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower and the Guarantor of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account or the Grant Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower and the Guarantor of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to subparagraph (a), (b) or (c) of this paragraph 6 shall be credited to the Credit Account or the Grant Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Development Financing Agreement. 1. For the purposes of this Annex, the term “Authorized Allocation” means the amount of US$4,300,000 to be withdrawn from the Credit Account or the Grant Account and deposited into the Special Account pursuant to paragraph 2 of this Annex.

Special Account. The Borrower may open and maintain a special deposit account, on terms and conditions satisfactory to the Association1. After the Association has received evidence satisfactory to it that the Special Account has been openedopened in accordance with Section 2.02 (b) of this Agreement, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made as follows: (a) if the Borrower is not making Report-based Disbursements, withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule; and (b) if the Borrower is making Report-based Disbursements), withdrawals shall be made in accordance with the provisions of Annex B to this Schedule. 2. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 3. Notwithstanding the provisions of Part B.2 B.1 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, at any time, is not satisfied that the reports referred to in Part A.4 A.5 of this Schedule adequately provide the information required for Report-based Disbursements; ; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (cii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: (iA) the records and accounts for the Special Account; or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Report-based DisbursementsDisbursements or were made on the basis of statements of expenditure, as the case may be. 4. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.1 of this Schedule if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to subparagraph (a), (b) or (c) of this paragraph 5 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of this Agreement. SCHEDULE 1 1. For the purposes of this Annex, the term “Authorized Allocation” means an amount equivalent to $15,000,000 to be withdrawn from the Credit Account and deposited into the Special Account pursuant to paragraph 2 of this Annex.

Special Account. 1. The Borrower may open and maintain in Dollars a special deposit accountaccount in BOU, on terms and conditions satisfactory to the Association. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made as follows: (a) if the Borrower is not making Report-based Disbursements, withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule 1; and (b) if the Borrower is making Report-based Disbursements), withdrawals shall be made in accordance with the provisions of Annex B to this Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, at any time, is not satisfied that the reports referred to in Part A.4 A.5 of this Schedule 1 adequately provide the information required for Report-based Disbursements; ; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (cii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: (iA) the records and accounts for the Special Account; or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Report-based DisbursementsDisbursements or were made on the basis of statements of expenditure, as the case may be. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower and the Guarantor of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower and the Guarantor of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to subparagraph (a), (b) or (c) of this paragraph 6 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Credit Agreement. 1. For the purposes of this Annex, the term “Authorized Allocation” means the amount of $1,000,000 to be withdrawn from the Credit Account and deposited into the Special Account pursuant to paragraph 2 of this Annex.

Special Account. The Except as the Bank shall otherwise agree, the Borrower may shall open and maintain in Dollars a special deposit accountaccount in a commercial bank, on terms and conditions satisfactory to the AssociationBank, including appropriate protection against set-off, seizure and attachment. 2. After the Association Bank has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Loan Account of amounts to be deposited into the Special Account shall be made in accordance with the provisions of the Annex to this Schedule1 (Report-based Disbursements)Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower shall, at such time as the Association Bank shall reasonably request, furnish to the Association Bank such documents and other evidence showing that such payment was made exclusively for Eligible Expenditures. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association Bank shall not be required to make further deposits into the Special Account: : (a) if the Association, Bank determines at any time, is time that any Financial Monitoring Report does not satisfied that the reports referred to in Part A.4 of this Schedule adequately provide the information required for Report-based Disbursements; pursuant to Section 4.02 of this Agreement; (b) if the Association Bank determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Loan Account; or or (c) if the Borrower shall have failed to furnish to the Association, Bank within the period of time specified in Section 4.01 (bb)(ii) or and (cc)(ii) of the this Agreement, any of the audit reports required to be furnished to the Association Bank pursuant to said Section in respect of the audit of: of (iA) the records and accounts for the Special Account; , or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Reportmade on the basis of Financial Monitoring Reports. 5. The Bank shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Bank shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Loan Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Bank shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Bank determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Bank, the Borrower shall, promptly upon notice from the Bank, provide such additional evidence as the Bank may request, or deposit into the Special Account (or, if the Bank shall so request, refund to the Bank) an amount equal to the amount of such payment. Unless the Bank shall otherwise agree, no further deposit by the Bank into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Bank determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Borrower shall, promptly upon notice from the Bank, refund to the Bank such outstanding amount. (c) The Borrower may, upon notice to the Bank, refund to the Bank all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Bank made pursuant to sub-paragraph (a), (b) or (c) of this paragraph 6 shall be credited to the Loan Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Loan Agreement. SCHEDULE 1 1. Except as the Bank may otherwise specify by notice to the Borrower, all withdrawals from the Loan Account shall be deposited by the Bank into the Special Account in accordance with the provisions of Schedule 1 to this Agreement. Each such deposit into the Special Account shall be withdrawn by the Bank from the Loan Account under one or more of the Special Account's Eligible Categories. 2. Upon receipt of each application for withdrawal of an amount of the Loan, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and deposit into the Special Account an amount equal to the lesser of: (a) the amount so requested; and (b) the amount which the Bank has determined, based Disbursementson the reports referred to in Part A.3 of this Schedule applicable to such withdrawal application, is required to be deposited in order to finance Eligible Expenditures during the six-month period following the date of such report.

Special Account. 1. The Borrower may shall open and maintain in Dollars a special deposit account, in its National Bank, on terms and conditions satisfactory to the Association. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made as follows: (a) until the Association shall have received: (i) the first Project Management Report referred to in Section 4.02 (b) of this Agreement; and (ii) a request from the Borrower for withdrawal on the basis of Project Management Reports, withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule 1; and (Report-based Disbursements)b) upon receipt by the Association of a Project Management Report pursuant to Section 4.02 (b) of this Agreement, accompanied by a request from the Borrower for withdrawal on the basis of Project Management Reports, all further withdrawals shall be made in accordance with the provisions of Annex B to this Schedule. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, Association determines at any time, is time that any Project Management Report does not satisfied that the reports referred to in Part A.4 of this Schedule adequately provide the information required for Report-based Disbursements; pursuant to Section 4.02 of this Agreement; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, Association within the period of time specified in Section 4.01 (b) or (cb)(ii) of the Agreement, this Agreement any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: of (iA) the records and accounts for the Special Account; , or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Reportmade on the basis of Project Management Reports. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-based Disbursementsmonth period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to sub-paragraph (a), (b) or (c) of this paragraph 6 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Credit Agreement. 1. For the purposes of this Annex:

Special Account. 1. The Borrower may shall open and maintain in Dollars a special deposit accountaccount in a commercial bank, on terms and conditions satisfactory to the AssociationAssociation including appropriate protection against set-off, seizure and attachment. After Except as the Association has received evidence satisfactory may otherwise specify by notice to it that the Special Account has been openedBorrower, all withdrawals from the Credit Account of amounts to shall be deposited by the Association into the Special Account shall be made in accordance with the provisions of the Annex to this Schedule1 (Report-based Disbursements)Schedule. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 2. Except as the Association shall otherwise agree, after the Association has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals from the Credit Account of amounts to be deposited into the said Special Account shall be made as follows: (a) Each application for withdrawal from the Credit Account shall be supported by a Project Management Report. (b) Upon receipt of each application for withdrawal of an amount of the Credit, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account an amount equal to the lesser of: (i) the amount so requested; and (ii) the amount which the Association has determined, based on the Project Management Report accompanying said application, is required to be deposited in order to finance Eligible Expenditures during the six-month period following the date of such report; provided, however, that the amount so deposited, when added to the amount indicated by said report to be remaining in the Special Account, shall not exceed the equivalent of $6,000,000. Each such deposit into the Special Account shall be withdrawn by the Association from the Credit Account under one or more of the Special Account’s Eligible Categories. 3. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, Association determines at any time, is time that any Project Management Report does not satisfied that the reports referred to in Part A.4 of this Schedule adequately provide the information required for Report-based Disbursements; pursuant to Section 4.02 of this Agreement; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (cii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: of (iA) the records and accounts for the Special Account; , or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were made on the basis of Project Management Reports. 4. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to sub-paragraph (a), (b) or (c) of this paragraph 5 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Development Credit Agreement. 1. For the purposes of this Annex, the term "Authorized Allocation" means, an amount equivalent to $1,500,000 (one million five hundred thousand dollars) to be withdrawn from the Credit Account and deposited into the Special Account pursuant to paragraph 2 of this Annex, provided, however, that unless the Association shall otherwise agree, the Authorized Allocation shall be limited to an amount equivalent to $750,000 until the aggregate amount of withdrawals from the Credit Account plus the total amount of all outstanding special commitments entered into by the Association pursuant to Section 5.02 of the General Conditions shall be equal to or exceed the equivalent of SDR 3,000,000. 2. Withdrawals of the Special Account’s Authorized Allocations and subsequent withdrawals to replenish the Special Account should be made as follows: (a) For withdrawals of said Special Account’s Authorized Allocation, the Borrower shall furnish to the Association a request or requests for deposit into said Special Account of an amount or amounts which in the aggregate do not exceed said Authorized Allocation. On the basis of each such request, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into said Special Account such amount, as the Borrower shall have requested. (b) For replenishment of said Special Account, the Borrower shall furnish to the Association requests for deposit into said Special Account at such intervals as the Association shall specify. Prior to or at the time of each such request, the Borrower shall furnish to the Association the documents and other evidence required pursuant to Part B.3 of Schedule 1 to this Agreement for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into said Special Accounts such amount as the Borrower shall have requested and as shall have been shown by said documents and other evidence to have been paid out of said Special Account for Eligible Expenditures. Each such deposit into said Special Account shall be withdrawn by the Association from the Credit Account under one or more of said Special Account’s Eligible Categories. 3. The Association shall not be required to make further deposits into the Special Account, once the total unwithdrawn amount of the Credit minus the total amount of all outstanding special commitments entered into by the Association pursuant to Section 5. 02 of the General Conditions, shall equal the equivalent of twice the amount of said Special Account’s Authorized Allocations. Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit shall follow such procedures, as the Association shall specify by notice to the Borrower. 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 said Special Account as of the date of such notice will be utilized in making payments for Eligible Expenditures. 1. Except as the Association may otherwise specify by notice to the Borrower, all withdrawals from the Credit Account shall be deposited by the Association into the Special Account in accordance with the provisions of Schedule 1 to this Agreement. Each such deposit into the Special Account shall be withdrawn by the Association from the Credit Account under one or more of the Special Account’s Eligible Categories. 2. Each application for withdrawal from the Credit Account for deposit into the Special Account shall be supported by a Project Management Report. 3. Upon receipt of each application for withdrawal of an amount of the Credit, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account an amount equal to the lesser of: (a) the amount so requested; and (b) the amount which the Association has determined, based on the Project Management Report accompanying said application, is required to be deposited in order to finance Eligible Expenditures during the six-based Disbursementsmonth period following the date of such report; provided, however, that the amount so deposited, when added to the amount indicated by said Project Management Report to be remaining in the Special Account, shall not exceed the equivalent of $6,000,000. The objective of the Project is to assist poor male and female farmers (in Participating Districts) to become aware of, and to be able to adopt, improved technology and management practices in their farming enterprises, to enhance their productive efficiency, their economic welfare, and the sustainability of their farming operations. 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: Advisory and Information Services to Farmers Provision of agricultural advisory and information services, including: (a) program orientation and group mobilization for farmers, (b) participatory planning between farmers and farm advisors: (i) on the terms of reference and annual work programs for future activities of farm advisors; and (ii) on on-going field activities of farm advisors; (c) carrying out of farm advisory services; and (d) information and communications services, to farmers' groups in Participating Districts and Participating Sub-counties. Part B: Technology Development and Linkages with Markets Provision of technical advisory services to farmers or farm advisors for on-farm adaptation and testing of agricultural technologies, development of on-farm technology, development of linkages between farmers and input and output markets, the implementation of technical support programs for issues of public importance as identified by the NAADS Secretariat and District NAADS offices and carrying out training events for farmers, farm advisors and District and Sub-county officials. Part C: Quality Assurance, Regulation and Technical Auditing of Service Providers Provision of technical advisory services to assist the NAADS Secretariat to: (a) develop and adopt minimum standards for regulating agricultural service providers, including setting standards for their qualification and performance; (b) develop model contracts of services to be entered into with farmers’ groups; and (c) carry out technical audits of the activities of agricultural service providers.

Special Account. 1. The Borrower may shall open and maintain in dollars a special deposit accountaccount in a commercial bank, on terms and conditions satisfactory to the AssociationBank, including appropriate protection against set-off, seizure and attachment. After Except as the Association has received evidence satisfactory Bank may otherwise specify by notice to it that the Special Account has been openedBorrower, all withdrawals from the Credit Loan Account of amounts to shall be deposited by the Bank into the Special Account shall be made in accordance with the provisions of the Annex to this Schedule1 (Report-based Disbursements)Schedule. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower shall, at such time as the Association Bank shall reasonably request, furnish to the Association Bank such documents and other evidence showing that such payment was made exclusively for Eligible Expenditures. 2. Except as the Bank shall otherwise agree, after the Bank has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals from the Loan Account of amounts to be deposited into the Special Account shall be made as follows: (a) Each application for withdrawal from the Loan Account shall be supported by a Project Management Report. (b) Upon receipt of each application for withdrawal of an amount of the Loan, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and deposit into the Special Account an amount equal to the lesser of: (i) the amount so requested; and (ii) the amount which the Bank has determined, based on the Project Management Report accompanying said application, is required to be deposited in order to finance Eligible Expenditures during the six-month period following the date of such report; provided, however, that the amount so deposited, when added to the amount indicated by said report to be remaining in the Special Account, shall not exceed the equivalent of $20,000,000. Each such deposit into the Special Account shall be withdrawn by the Bank from the Loan Account under one or more of the Special Account’s Eligible Categories. 3. Notwithstanding the provisions of Part B.2 of this Schedule, the Association Bank shall not be required to make further deposits into the Special Account: : (a) if the Association, Bank determines at any time, is time that any Project Management Report does not satisfied that the reports referred to in Part A.4 of this Schedule adequately provide the information required for Report-based Disbursements; pursuant to Section 4.02 of this Agreement; (b) if the Association Bank determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Loan Account; or or (c) if the Borrower shall have failed to furnish to the Association, Bank within the period of time specified in Section 4.01 (b) or (c4.01(b)(ii) of the this Agreement, any of the audit reports required to be furnished to the Association Bank pursuant to said Section in respect of the audit of: of (iA) the records and accounts for the Special Account; Account or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Reportmade on the basis of Project Management Reports. 4. The Bank shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Bank shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Loan Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Bank shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Bank determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Bank, the Borrower shall, promptly upon notice from the Bank, provide such additional evidence as the Bank may request, or deposit into the Special Account (or, if the Bank shall so request, refund to the Bank) an amount equal to the amount of such payment. (b) If the Bank determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-based Disbursementsmonth period following such determination, the Borrower shall, promptly upon notice from the Bank, refund to the Bank such outstanding amount. (c) The Borrower may, upon notice to the Bank, refund to the Bank all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Bank made pursuant to sub-paragraph (a), (b) or (c) of this paragraph 5 shall be credited to the Loan Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Loan Agreement. The objective of the Project is to assist the Borrower, on an urgent basis: (i) to prevent or minimize the disruption in the Borrower’s social and economic infrastructure that would be caused by the failure of critical central, state and local government systems to process data properly after December 31, 1999 due to the Y2K Problem; (ii) to monitor closely the Y2K Problem nationally; and (iii) to prepare measures to deal with possible disruption arising from the Y2K Problem. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Bank may agree upon from time to time to achieve such objectives: Part A: Government Sector Remediation 1. Carrying out of a program of Y2K Problem remediation by assisting selected federal, state and local government agencies in the following areas: (a) diagnosis of potential Y2K Problem and technical and impact analysis of such problem; and (b) implementation of remediation plans through replacement of commonly-used systems by standardized software, upgrading of the hardware and software platform infrastructure, modification of existing systems and development of contingency plans. 2. Strengthening of the project management capacity of MAMPU. Part B: Y2K Project Team Activities 1. Carrying out of a program to strengthen the capacity of the Y2K Project Team to coordinate and monitor the implementation of Y2K Problem remediation nationally. 2. Dissemination of knowledge about the Y2K Problem through execution of a publicity campaign; establishment of a telephone hot-line system; expansion of an existing website and establishment of links to relevant websites; and carrying out of targeted seminars. 3. Carrying out of selective audits of critical sectors and entities to assess their Y2K Problem remediation efforts . 4. Analysis of the adequacy of the Borrower’s legal framework to address any consequences arising out of the Y2K Problem, including the allocation of responsibility and imposition of sanctions. 5. Development and coordination of contingency plans for situations arising from Y2K Problems, at the national and sectoral levels. The Project is expected to be completed by June 30, 2001. A. General Definitions For purposes of this Schedule, the following terms have the following meanings:

Special Account. 1. The Borrower may may, for the purposes of the Project, open and maintain in Dollars, a special deposit accountaccount in Bank Indonesia or in a commercial bank acceptable to the Association, on terms and conditions satisfactory to the Association, including, in the case of a commercial bank, appropriate protection against set-off, seizure and attachment. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made as follows: (a) if the Borrower is not making Report-based Disbursements, withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule 1; and (b) if the Borrower is making Report-based Disbursements), withdrawals shall be made in accordance with the provisions of Annex B to this Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 4. Notwithstanding the provisions of paragraph 2 of Part B.2 B of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, at any time, is not satisfied that the reports referred to in paragraph 4 of Part A.4 A of this Schedule adequately provide the information required for Report-based Disbursements; ; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (c4.01(b)(ii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: (iA) the records and accounts for the Special Account; or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Report-based DisbursementsDisbursements or were made on the basis of statements of expenditure, as the case may be. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of paragraph 2 of Part B of this Schedule if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to subparagraph (a), (b) or (c) of this paragraph 6 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Development Credit Agreement. 1. For the purposes of this Annex, the term “Authorized Allocation” means the amount of $14,000,000 to be withdrawn from the Credit Account and deposited into the Special Account pursuant to paragraph 2 of this Annex.

Special Account. The 1. Upon receipt of notification from the Association allowing the establishment of the Special Accounts, the Borrower may open and maintain in Dollars a special deposit accountaccount in a commercial Bank acceptable to the Association, on terms and conditions satisfactory to the Association, including appropriate protection against set-off, seizure and attachment. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made as follows: (a) if the Borrower is not making Report-based Disbursements, withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule 1; and (b) if the Borrower is making Report-based Disbursements), withdrawals shall be made in accordance with the provisions of Annex B to this Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, at any time, is not satisfied that the reports referred to in Part A.4 A.5 of this Schedule 1 adequately provide the information required for Report-based Disbursements; ; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (cii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: (i) the records and accounts for the Special Account; or (ii) the records and accounts reflecting expenditures with respect to which withdrawals were Report-based DisbursementsDisbursements or were made on the basis of statements of expenditure, as the case may be. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower and the Guarantor of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower and the Guarantor of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to subparagraph (a), (b) or (c) of this paragraph 6 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Credit Agreement. 1. For the purposes of this Annex, the term “Authorized Allocation” means the amount of $1,000,000 to be withdrawn from the Credit Account and deposited into the Special Account pursuant to paragraph 2 of this Annex.

Special Account. 1. The Borrower may shall open and maintain in Dollars a special deposit accountaccount in the Reserve Bank of India, on terms and conditions satisfactory to the Association. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made as follows: (a) If the Borrower is not seeking Report-based Disbursements, withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule 1; and (b) If the Borrower is seeking Report-based Disbursements), withdrawals shall be made in accordance with the provisions of Annex B to this Schedule1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, at any time, is not satisfied that the reports referred to in Part A.4 A.5 of this Schedule 1 adequately provide the information required for Report-Report- based Disbursements; ; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (cii) of the Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: (i) the records and accounts for the Special Account; or (ii) the records and accounts reflecting expenditures with respect to which withdrawals were Report-based DisbursementsDisbursements or were made on the basis of statements of expenditure, as the case may be. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to subparagraph (a), (b) or (c) of this paragraph 6 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Development Credit Agreement. 1. For the purposes of this Annex, the term “Authorized Allocation” means an amount equivalent to $15,000,000 to be withdrawn from the Credit Account and deposited into the Special Account pursuant to paragraph 2 of this Annex; provided, however, that, unless the Association shall otherwise agree, the Authorized Allocation shall be limited to an amount equivalent to $7,500,000 until the aggregate amount of withdrawals from the Credit Account, plus the total amount of all outstanding special commitments entered into by the Association pursuant to Section 5.02 of the General Conditions shall equal or exceed the equivalent of SDR 25,000,000.

Special Account. 1. The Borrower may open and maintain in Dollars a special deposit account, to be managed by the Executive Secretariat, in a commercial bank acceptable to the Association, on terms and conditions satisfactory to the Association, including appropriate protection against set-off, seizure and attachment. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made as follows: (a) if the Borrower is not making Report-based Disbursements, withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule 1; and (b) if the Borrower is making Report-based Disbursements), withdrawals shall be made in accordance with the provisions of Annex B to this Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, at any time, is not satisfied that the reports referred to in Part A.4 A.5 of this Schedule 1 adequately provide the information required for Report-Report- based Disbursements; ; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (cii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: (iA) the records and accounts for the Special Account; or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Report-based DisbursementsDisbursements or were made on the basis of statements of expenditure, as the case may be. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to subparagraph (a), (b) or (c) of this paragraph 6 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Credit Agreement. 1. For the purposes of this Annex, the term “Authorized Allocation” means an amount equivalent to $1,800,000 to be withdrawn from the Credit Account and deposited into the Special Account pursuant to paragraph 2 of this Annex, provided, however, that unless the Association shall otherwise agree, the Authorized Allocation shall be limited to an amount equivalent to $900,000 until the aggregate amount of withdrawals from the Credit Account plus the total amount of all outstanding special commitments entered into by the Association pursuant to Section 5.02 of the General Conditions shall be equal to or exceed the equivalent of SDR 1,300,000.

Special Account. 1. The Borrower may Borrower, acting through GCD, shall open and maintain in Dollars a special deposit account, in a commercial bank, on terms and conditions satisfactory to the AssociationBank, including appropriate protection against set-off, seizure and attachment. 2. After the Association Bank has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Loan Account of amounts to be deposited into the Special Account shall be made in accordance with the provisions of the Annex to this Schedule1 (Report-based Disbursements)Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower shall, at such time as the Association Bank shall reasonably request, furnish to the Association Bank such documents and other evidence showing that such payment was made exclusively for Eligible Expenditures. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association Bank shall not be required to make further deposits into the Special Account: : (a) if the Association, at any time, is not satisfied that the reports referred to in Part A.4 of this Schedule adequately provide the information required for Report-based Disbursements; if the Association Bank determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Loan Account; or or (b) if the Borrower shall have failed to furnish to the Association, Bank within the period of time specified in Section 4.01 (b) or (cb)(ii) of the Agreement, this Agreement any of the audit reports required to be furnished to the Association Bank pursuant to said Section in respect of the audit of: of (iA) the records and accounts for the Special Account; , or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Reportmade on the basis of statements of expenditures. 5. The Bank shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Bank shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Loan Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Bank shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Bank determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Bank, the Borrower shall, promptly upon notice from the Bank, provide such additional evidence as the Bank may request, or deposit into the Special Account (or, if the Bank shall so request, refund to the Bank) an amount equal to the amount of such payment. Unless the Bank shall otherwise agree, no further deposit by the Bank into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Bank determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-based Disbursementsmonth period following such determination, the Borrower shall, promptly upon notice from the Bank, refund to the Bank such outstanding amount. (c) The Borrower may, upon notice to the Bank, refund to the Bank all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Bank made pursuant to sub-paragraph (a), (b) or (c) of this paragraph 6 shall be credited to the Loan Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Loan Agreement. Annex to SCHEDULE 1 Operation of the Special Account 1. For the purposes of this Annex:

Special Account. 1. The Borrower may open and maintain in Dollars a special deposit accountaccount in its Central Bank, on terms and conditions satisfactory to the Association. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made as follows: (a) if the Borrower is not making Report-based Disbursements, withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule 1; and (b) if the Borrower is making Report-based Disbursements), withdrawals shall be made in accordance with the provisions of Annex B to this Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, at any time, is not satisfied that the reports referred to in Part A.4 A.5 of this Schedule 1 adequately provide the information required for Report-based Disbursements; ; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (cii) of this the Projectthis Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: (iA) the records and accounts for the Special Account; or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Report-based DisbursementsDisbursements or were made on the basis of statements of expenditure, as the case may be. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower and the Guarantor of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six- (6) month period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount.

Special Account. 1. The Borrower may shall open and maintain in dollars a special deposit accountaccount in Maldives Monetary Authority, on terms and conditions satisfactory to the Association. After Except as the Association has received evidence satisfactory may otherwise specify by notice to it that the Special Account has been openedBorrower, all withdrawals from the Credit Account of amounts to shall be deposited by the Association into the Special Account shall be made in accordance with the provisions of the Annex to this Schedule1 (Report-based Disbursements)Schedule. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 2. Except as the Association shall otherwise agree, after the Association has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made as follows: (a) Each application for withdrawal from the Credit Account shall be supported by a Project Management Report. (b) Upon receipt of each application for withdrawal of an amount of the Credit, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account an amount equal to the lesser of: (i) the amount so requested; and (ii) the amount which the Association has determined, based on the Project Management Report accompanying said application, is required to be deposited in order to finance Eligible Expenditures during the six-month period following the date of such report; provided, however, that the amount so deposited, when added to the amount indicated by said report to be remaining in the Special Account, shall not exceed the equivalent of $3,500,000. Each such deposit into the Special Account shall be withdrawn by the Association from the Credit Account under one or more of the Special Account’s Eligible Categories. 3. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, Association determines at any time, is time that any Project Management Report does not satisfied that the reports referred to in Part A.4 of this Schedule adequately provide the information required for Report-based Disbursements; pursuant to Section 4.02 of this Agreement; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (c4.01(b)(ii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: of (iA) the records and accounts for the Special Account; Account or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Reportmade on the basis of Project Management Reports. 4. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to sub-paragraph (a), (b) or (c) of this paragraph 5 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Development Credit Agreement. The objectives of the Project are to assist the Borrower to improve educational quality and efficiency, increase equitable access and develop the professional skill capacities of the national labor force. 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: Improve education quality through development of: (1) pre-service primary and secondary teacher education, including upgrading teacher educators and facilities at the Institute of Teacher Education (ITE), and in-service atoll-based Disbursementsteacher training; (2) primary school curriculum and textbook publishing capacity; (3) a new secondary public examination policy and a system for national assessments of student learning. Part B: Increase equitable access to secondary education by targeting the needs of students and teachers from the outer atolls, constructing and upgrading facilities in the outer atolls, providing additional libraries, science equipment and laboratories and training teachers and headmasters of atoll schools. Part C: Strengthen institutional capacity through the provision of technical assistance and training and by developing an Education Management Information System. Part D: Raise professional skill levels of the national labor force through the provision of technical assistance and training at national and overseas institutions, upgrading and expanding training programs at the Institute of Management and Administration, and the carrying out of studies. The Project is expected to be completed by September 30, 2004. Procurement and Consultants’ Services Section I. Procurement of Good and Works Part A: General Goods and works shall be procured in accordance with the provisions of Section I of the “Guidelines for Procurement under IBRD Loans and ▇▇▇ Credits” published by the Bank in January 1995 and revised in January and August 1996, September 1997 and January 1999 (the Guidelines), and the following provisions of Section I of this Schedule. Part B: International Competitive Bidding 1. Except as otherwise provided in Part C of this Section, furniture and educational equipment shall be procured under contracts awarded in accordance with the provisions of Section II of the Guidelines and paragraph 5 of Appendix 1 thereto. 2. The following provisions shall apply to furniture and educational equipment to be procured under contracts awarded in accordance with the provisions of paragraph 1 of this Part B: (a) Preference for domestically manufactured goods The provisions of paragraphs 2.54 and 2.55 of the Guidelines and Appendix 2 thereto shall apply to goods manufactured in the territory of the Borrower.

Special Account. 1. The Borrower may shall open and maintain in dollars a special deposit accountSpecial Account in Bangladesh Bank, on terms and conditions satisfactory to the Association. 2. After the Association has received evidence satisfactory to it that the a Special Account has been opened, withdrawals from the Credit Account of amounts to be deposited into the said Special Account shall be made as follows: (a) withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule 1 until the Association receives a request from the Borrower to make withdrawals on the basis of Project Management Reports; and (Report-based Disbursements)b) upon receipt by the Association of the request from the Borrower to make withdrawals on the basis of Project Management Reports, all further withdrawals shall be made in accordance with the provisions of Annex B to this Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, Association determines at any time, is time that any Project Management Report does not satisfied that the reports referred to in Part A.4 of this Schedule adequately provide the information required for Report-based Disbursements; pursuant to Section 4.02 of the Project Agreement; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, Association within the period of time specified in Section 4.01 (b) or (c4.01(b)(ii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: of (iA) the records and accounts for the Special Account; Account or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Reportmade on the basis of statements of expenditures or Project Management Reports. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-based Disbursementsmonth period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to sub-paragraph (a), (b) or (c) of this paragraph 6 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Development Credit Agreement. 1. For the purposes of this Annex:

Special Account. 1. The Borrower may may, for the purposes of the Project, open and maintain in Dollars a special deposit accountaccount in Bank Indonesia or in a commercial bank acceptable to the Association, on terms and conditions satisfactory to the Association, including, in the case of a commercial bank, appropriate protection against set-off, seizure and attachment. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made as follows: (a) if the Borrower is not making Report-based Disbursements, withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule 1; and (b) if the Borrower is making Report-based Disbursements), withdrawals shall be made in accordance with the provisions of Annex B to this Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, at any time, is not satisfied that the reports referred to in Part A.4 of this Schedule 1 adequately provide the information required for Report-Report- based Disbursements; ; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (c4.01(b)(ii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: (iA) the records and accounts for the Special Account; or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Report-based DisbursementsDisbursements or were made on the basis of statements of expenditure, as the case may be. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower and the Guarantor of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower and the Guarantor of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to sub-paragraph (a), (b) or (c) of this paragraph 6 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Credit Agreement. 1. For the purposes of this Annex, the term “Authorized Allocation” means the amount of $10,000,000 to be withdrawn from the Credit Account and deposited into the Special Account pursuant to paragraph 2 of this Annex. 2. 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 Borrower shall furnish to the Association a request or requests for deposit into the Special Account of an amount or amounts which in the aggregate do not exceed the Authorized Allocation. On the basis of each such request, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account such amount as the Borrower shall have requested. (b) For replenishment of the Special Account, the Borrower shall furnish to the Association requests for deposit into the Special Account at such intervals as the Association shall specify. Prior to or at the time of each such request, the Borrower shall furnish to the Association the documents and other evidence required pursuant to Part B.3 of Schedule 1 to this Agreement for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account such amount as the Borrower shall have requested and as shall have been shown by said documents and other evidence to have been paid out of the Special Account for Eligible Expenditures. Each such deposit into the Special Account shall be withdrawn by the Association from the Credit Account under one or more of the Eligible Categories. 3. The Association shall not be required to make further deposits into the Special Account, once the total unwithdrawn amount of the Credit minus the total amount of all outstanding special commitments entered into by the Association pursuant to Section

Special Account. 1. The Borrower may shall open and maintain in Dollars a special deposit accountaccount in a commercial bank, on terms and conditions satisfactory to the AssociationBank, including appropriate protection against set-off, seizure and attachment. After Except as the Association has received evidence satisfactory Bank may otherwise specify by notice to it that the Special Account has been openedBorrower, all withdrawals from the Credit Loan Account of amounts to shall be deposited by the Bank into the Special Account shall be made in accordance with the provisions of the Annex to this Schedule1 (Report-based Disbursements)Schedule. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower shall, at such time as the Association Bank shall reasonably request, furnish to the Association Bank such documents and other evidence showing that such payment was made exclusively for Eligible Expenditures. 2. Except as the Bank shall otherwise agree, after the Bank has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals from the Loan Account of amounts to be deposited into the Special Account shall be made as follows: (a) Each application for withdrawal from the Loan Account shall be supported by a Project Management Report. (b) Upon receipt of each application for withdrawal of an amount of the Loan, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and deposit into the Special Account an amount equal to the lesser of: (i) the amount so requested; and (ii) the amount which the Bank has determined, based on the Project Management Report accompanying said application, is required to be deposited in order to finance Eligible Expenditures during the six-month period following the date of such report; provided, however, that the amount so deposited, when added to the amount indicated by said report to be remaining in the Special Account, shall not exceed the equivalent of $48,000,000. Each such deposit into the Special Account shall be withdrawn by the Bank from the Loan Account under one or more of the Special Account’s Eligible Categories. 3. Notwithstanding the provisions of Part B.2 of this Schedule, the Association Bank shall not be required to make further deposits into the Special Account: : (a) if the Association, Bank determines at any time, is time that any Project Management Report does not satisfied that the reports referred to in Part A.4 of this Schedule adequately provide the information required for Report-based Disbursements; pursuant to Section 4.02 of this Agreement; (b) if the Association Bank determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Loan Account; or or (c) if the Borrower shall have failed to furnish to the Association, Bank within the period of time specified in Section 4.01 (b) or (c4.01(b)(ii) of the this Agreement, any of the audit reports required to be furnished to the Association Bank pursuant to said Section in respect of the audit of: of (iA) the records and accounts for the Special Account; Account or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Reportmade on the basis of Project Management Reports. 4. The Bank shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Bank shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Loan Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Bank shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Bank determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Bank, the Borrower shall, promptly upon notice from the Bank, provide such additional evidence as the Bank may request, or deposit into the Special Account (or, if the Bank shall so request, refund to the Bank) an amount equal to the amount of such payment. (b) If the Bank determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-based Disbursementsmonth period following such determination, the Borrower shall, promptly upon notice from the Bank, refund to the Bank such outstanding amount. (c) The Borrower may, upon notice to the Bank, refund to the Bank all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Bank made pursuant to sub-paragraph (a), (b) or (c) of this paragraph 5 shall be credited to the Loan Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Loan Agreement. The objective of the Project is to assist the Borrower in: (a) mitigating the adverse impact of the regional economic crisis on its education sector; and (b) in its medium-term economic recovery by developing and enhancing student technical skills. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Bank may agree upon from time to time to achieve such objective: Part A. Basic Education 1. Improving access to Basic Education, primarily in poor and undeveloped areas, through construction of about 35 primary schools, 25 secondary schools, 600 staff houses and student hostels to accommodate about 2,750 students and provision of equipment and furniture therefor. 2. Improving the quality of Basic Education by upgrading teacher qualifications and teaching skills through training and development of instructional materials and strengthening of the existing pilot school-to-work program. Part B. Polytechnic Education 1. Increasing student capacity of polytechnics through: (a) construction and equipping of a new polytechnic institute in Kota Kinabalu, Sabah, with a design capacity of about 3,600 students; and (b) upgrading, expansion and equipping of Project Polytechnics to create a total of about 15,000 new student places at said polytechnics. 2. Improving the quality and relevance of polytechnic education through provision of training to about 1,130 polytechnic staff and revision of existing and development of new teaching curricula and materials. 3. Strengthening the information, planning and management systems of polytechnics through provision of consultants’ services and equipment. Part C. Institutional Strengthening 1. Improving the Borrower’s existing education management information system and expanding its usage, especially in Sabah and Sarawak, through provision of consultants’ services, equipment, furniture, training and instructional materials. 2. Enhancing MOE staff’s policy and data analysis, strategic planning and management skills and academic qualifications.

Special Account. 1. The Borrower may open and maintain in Dollars a special deposit accountaccount in its Central Bank, on terms and conditions satisfactory to the Association. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made as follows: (a) if the Borrower is not making Report-based Disbursements, withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule 1; and (b) if the Borrower is making Report-based Disbursements), withdrawals shall be made in accordance with the provisions of Annex B to this Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, at any time, is not satisfied that the reports referred to in Part A.4 A.5 of this Schedule 1 adequately provide the information required for Report-based Disbursements; ; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (cii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: (iA) the records and accounts for the Special Account; or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Report-based DisbursementsDisbursements or were made on the basis of statements of expenditure, as the case may be. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six (6)-month period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to subparagraph (a), (b), or (c) of this paragraph 6 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Credit Agreement. 1. For the purposes of this Annex, the term “Authorized Allocation” means the amount of $2,000,000 to be withdrawn from the Credit Account and deposited into the Special Account pursuant to paragraph 2 of this Annex.

Special Account. 1. The Borrower may open and maintain in Dollars a special deposit accountaccount in the National Reserve Bank of Tonga, on terms and conditions satisfactory to the Association. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made in accordance with the provisions of the Annex A to this Schedule1 (Report-based Disbursements)Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, at any time, is not satisfied that the reports referred to in Part A.4 A.2 of this Schedule 1 adequately provide the information required for Report-based Disbursements; ; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (c4.01(b)(ii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: (iA) the records and accounts for the Special Account; or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Report-based Disbursements. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to sub-paragraph (a), (b) or (c) of this paragraph 6 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Credit Agreement. 1. Withdrawals from the Credit Account shall be deposited by the Association into the Special Account in accordance with the provisions of Schedule 1 to this Agreement. Each such deposit into the Special Account shall be withdrawn by the Association from the Credit Account under one or more of the Eligible Categories. 2. Upon receipt of each application for withdrawal of an amount of the Credit, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account an amount equal to the lesser of: (a) the amount so requested; and (b) the amount which the Association has determined, based on the reports referred to in Part A.2 of this Schedule 1 applicable to such withdrawal application, is required to be deposited in order to finance Eligible Expenditures during the six-month period following the date of such reports.

Special Account. 1. The Borrower may open and maintain in Dollars a separate special deposit accountaccount in Banco de Cabo Verde, on terms and conditions satisfactory to the Association. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made as follows: (a) if the Borrower is not making Report-based Disbursements, withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule 1; and (b) if the Borrower is making Report-based Disbursements), withdrawals shall be made in accordance with the provisions of Annex B to this Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, at any time, is not satisfied that the reports referred to in Part A.4 A.5 of this Schedule 1 adequately provide the information required for Report-Report- based Disbursements; ; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (cii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: (iA) the records and accounts for the Special Account; or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Report-based DisbursementsDisbursements or were made on the basis of statements of expenditure, as the case may be. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to subparagraph (a), (b) or (c) of this paragraph 6 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Development Credit Agreement. 1. For the purposes of this Annex, the term “Authorized Allocation” means the amount of $1,000,000 to be withdrawn from the Credit Account and deposited into the Special Account pursuant to paragraph 2 of this Annex.

Special Account. 1. The Borrower may open and maintain in Dollars a special deposit accountaccount in its Central Bank, on terms and conditions satisfactory to the Association. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made as follows: (a) if the Borrower is not making Report-based Disbursements, withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule 1; and (b) if the Borrower is making Report-based Disbursements), withdrawals shall be made in accordance with the provisions of Annex B to this Schedule 1. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 4. Notwithstanding the provisions of Part paragraph B.2 of this ScheduleSchedule 1, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, at any time, is not satisfied that the reports referred to in Part A.4 paragraph A.5 of this Schedule 1 adequately provide the information required for Report-based Disbursements; ; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, within the period of time specified in Section 4.01 (b) or (cii) of the this Agreement, any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: (iA) the records and accounts for the Special Account; or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Report-based DisbursementsDisbursements or were made on the basis of statements of expenditure, as the case may be. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of paragraph B.2 of this Schedule if, at any time, the Association shall have notified the Borrower and the Guarantor of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower and the Guarantor of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-month period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to subparagraph (a), (b) or (c) of this paragraph 6 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Credit Agreement. 1. For the purposes of this Annex, the term “Authorized Allocation” means the amount of $4,000,000 to be withdrawn from the Credit Account and deposited into the Special Account pursuant to paragraph 2 of this Annex.

Special Account. 1. The Borrower may shall open and maintain in Dollars a special deposit account, in its National Bank, on terms and conditions satisfactory to the Association. 2. After the Association has received evidence satisfactory to it that the Special Account has been opened, withdrawals from the Credit Account of amounts to be deposited into the Special Account shall be made as follows: (a) until the Association shall have received: (i) the first Project Management Report referred to in Section 4.02 (b) of this Agreement; and (ii) a request from the Borrower for withdrawal on the basis of Project Management Reports, withdrawals shall be made in accordance with the provisions of the Annex A to this Schedule1 Schedule 1; and (Report-based Disbursements)b) upon receipt by the Association of a Project Management Report pursuant to Section 4.02 (b) of this Agreement, accompanied by a request from the Borrower for withdrawal on the basis of Project Management Reports, all further withdrawals shall be made in accordance with the provisions of Annex B to this Schedule. 3. Payments out of the Special Account shall be made exclusively for Eligible Expenditures. For each payment made by the Borrower out of the Special Account, the Borrower 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. 4. Notwithstanding the provisions of Part B.2 of this Schedule, the Association shall not be required to make further deposits into the Special Account: : (a) if the Association, Association determines at any time, is time that any Project Management Report does not satisfied that the reports referred to in Part A.4 of this Schedule adequately provide the information required for Report-based Disbursements; pursuant to Section 4.02 of this Agreement; (b) if the Association determines at any time that all further withdrawals for payment of Eligible Expenditures should be made by the Borrower directly from the Credit Account; or or (c) if the Borrower shall have failed to furnish to the Association, Association within the period of time specified in Section 4.01 (b) or (cb)(ii) of the Agreement, this Agreement any of the audit reports required to be furnished to the Association pursuant to said Section in respect of the audit of: of (iA) the records and accounts for the Special Account; , or (iiB) the records and accounts reflecting expenditures with respect to which withdrawals were Reportmade on the basis of Project Management Reports. 5. The Association shall not be required to make further deposits into the Special Account in accordance with the provisions of Part B.2 of this Schedule if, at any time, the Association shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account pursuant to Section 6.02 of the General Conditions. Upon such notification, the Association shall determine, in its sole discretion, whether further deposits into the Special Account may be made and what procedures should be followed for making such deposits, and shall notify the Borrower of its determination. (a) If the Association determines at any time that any payment out of the Special Account was made for an expenditure which is not an Eligible Expenditure, or was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association, provide such additional evidence as the Association may request, or 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association determines at any time that any amount outstanding in the Special Account will not be required to cover payments for Eligible Expenditures during the six-based Disbursementsmonth period following such determination, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to sub-paragraphs (a), (b) or (c) of this paragraph 6 shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the provisions of the Credit Agreement. 1. For the purposes of this Annex: