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CONFORMED COPY
(Belgrade Environment Project)
between
SOCIALIST FEDERAL REPUBLIC OF YUGOSLAVIA
and
INTERNATIONAL BANK FOR RECONSTRUCTION
AND DEVELOPMENT
as Administrator of Grant Funds
provided by JAPAN
Dated October 4, 1991
JAPANESE GRANT AGREEMENT
AGREEMENT, dated October 4, 1991, among SOCIALIST FEDERAL REPUBLIC OF YUGOSLAVIA 
(the Recipient), the CITY OF BELGRADE and the INTERNATIONAL BANK FOR RECONSTRUCTION 
AND DEVELOPMENT (the Bank) acting as Administrator (the Administrator) of grant funds 
provided by JAPAN (Japan).
WHEREAS (A) pursuant to a letter agreement dated July 30, 1990, between Japan 
and the Bank and International Development Association (the Association), Japan has 
requested the Bank and the Association, and the Bank and the Association have agreed, 
to administer grant funds to be made available by Japan for the financing of certain 
programs and projects supported by the Bank and the Association, as the case may be, 
in accordance with the provisions of such letter agreement; and
WHEREAS (B) Japan has agreed to make available to the Recipient a grant out of 
said grant funds (the Grant) to finance the cost of carrying out the technical 
assistance described in Schedule 2 to this Agreement (the Technical Assistance) on the 
terms and conditions hereinafter set forth;
NOW THEREFORE the parties hereto hereby agree as follows:
ARTICLE I
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General Conditions; Definitions
Section 1.01. (a) The following provisions of the General Conditions Applicable 
to Loan and Guarantee Agreements of the Bank, dated January 1, 1985, with the 
modifications set forth in paragraph (b) of this Section (the General Conditions) 
constitute an integral part of this Agreement:
(i)
Article I;
     (ii)
Sections 2.01 (1), (2), (3), (4), (6), (8), (9), (10), (11), (18) 
and (20), 2.02 and 2.03;
    (iii)
Section 3.01;
     (iv)
Section 4.01 and the first sentence of Section 4.09;
(v)
Article V;
     (vi)
Sections 6.01, 6.02 (a), (c), (d), (e), (f), (i) and (k), 6.03, 
6.04 and 6.06;
    (vii)
Section 8.01 (b);
   (viii)
Sections 9.01 (a) and (c), 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09;
     (ix)
Sections 10.01, 10.03 and 10.04; and
(x)
Article XI.
(b)
The General Conditions shall be modified as follows:
(i)
the term "Bank", wherever used in the General Conditions, other 
than in Sections 2.01 (8) and 6.02 (f) thereof and the last use of 
such term in Section 5.01 thereof, means the International Bank 
for Reconstruction and Development acting as Administrator of the 
Grant pursuant to the letter agreement between Japan and the Bank 
and the Association referred to in Recital (A) of this Agreement, 
except that in Section 6.02, the term "Bank" shall also include 
the International Bank for Reconstruction and Development acting 
in its own capacity;
     (ii)
the term "Borrower", wherever used in the General Conditions, 
means the Recipient;
    (iii)
the term "Loan Agreement", wherever used in the General 
Conditions, means this Agreement;
     (iv)
the term "Loan", wherever used in the General Conditions, means 
the Grant;
(v)
the term "Loan Account", wherever used in the General Conditions, 
means the Grant Account, an account opened by the Administrator on 
its books in the name of the Recipient to which the amount of the 
Grant is credited;
     (vi)
the term "Project", wherever used in the General Conditions, means 
the technical assistance described in Schedule 2 to this 
Agreement; and
    (vii)
Section 4.01 shall be modified to read:
"Withdrawals from the Grant Account shall be made in yen; provided, 
however, that if the expenditures to be financed out of the Grant have been 
paid or are payable in another currency, the Administrator shall, at the 
request of the Recipient, purchase such currency with the proceeds of such 
withdrawal."
Section 1.02. Wherever used in this Agreement, unless the context otherwise 
requires, the several terms defined in the General Conditions and in the Recitals to 
this Agreement have the respective meanings therein set forth; and the terms "yen" and 
"¥" mean the currency of Japan.
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ARTICLE II
The Grant
Section 2.01. The Administrator agrees to make available to the Recipient, on 
the terms and conditions set forth or referred to in this Agreement, the Grant in an 
amount of seventy-two million eight hundred thousand yen (¥72,800,000).
Section 2.02. The amount of the Grant may be withdrawn from the Grant Account in 
accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may 
be amended from time to time by agreement between the Recipient and the Administrator, 
for expenditures made (or, if the Administrator shall so agree, to be made) in respect 
of the reasonable cost of carrying out the Project and to be financed out of the 
Grant.
Section 2.03. The Closing Date shall be December 31, 1993, or such later date as 
the Administrator shall establish. The Administrator shall promptly notify the 
Recipient of such later date.
ARTICLE III
Execution of the Project
Section 3.01. (a) The Recipient shall carry out the Project with due diligence 
and efficiency and in conformity with appropriate engineering and economic practices, 
and shall provide or cause to be provided, promptly as needed, the funds, facilities, 
services and other resources required for the Project.
(b)
Without limitation upon the provisions of paragraph (a) of this Section 
and except as the Recipient and the Administrator shall otherwise agree, the Recipient 
shall carry out the Project in accordance with the Implementation Program set forth in 
Schedule 3 to this Agreement.
Section 3.02. Except as the Administrator shall otherwise agree, procurement of 
the goods and consultants' services required for the Project and to be financed out of 
the Grant shall be governed by the provisions of Schedule 4 to this Agreement.
Section 3.03. (a) The Recipient shall maintain or cause to be maintained records 
and accounts adequate to reflect in accordance with sound accounting practices the 
operations, resources and expenditures in respect of the Project of the departments or 
agencies of the Recipient responsible for carrying out the Project or any part 
thereof.
(b)
The Recipient shall:
(i)
have the records and accounts referred to in paragraph (a) of this 
Section for each fiscal year audited, in accordance with 
appropriate auditing principles consistently applied, by 
independent auditors acceptable to the Administrator;
     (ii)
furnish to the Administrator as soon as available, but in any case 
not later than eight months after the end of each such year, the 
report of such audit by said auditors, of such scope and in such 
detail as the Administrator shall have reasonably requested; and
    (iii)
furnish to the Administrator such other information concerning 
said records and accounts and the audit thereof as the 
Administrator shall from time to time reasonably request.
ARTICLE IV
Effectiveness; Termination
Section 4.01. This Agreement shall become effective upon its execution by the 
parties hereto.
Section 4.02. This Agreement shall continue in effect until the Grant has been 
fully disbursed and the parties to this Agreement have fulfilled all their obligations 
hereunder.
ARTICLE V
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Representation
Section 5.01. The Federal Secretary for Finance of the Recipient is designated 
as representative of the Recipient for the purposes of Section 11.03 of the General 
Conditions.
Section 5.02. The following addresses are specified for the purposes of Section 
11.01 of the General Conditions:
For the Recipient:
Savezni Sekretarijat za Finansije
Bulevar Lenjina 2
11070 Beograd
Yugoslavia
Cable address:
Telex:
SAVEZNI
11448 SIV
Sekretarijat Za
  Finansije
Beograd
For the Administrator:
International Bank for
  Reconstruction and Development
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address:
Telex:
INTBAFRAD
197688 (TRT),
Washington, D.C.
248423 (RCA),
 64145 (WUI) or
 82987 (FTCC)
IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized 
representatives, have caused this Agreement to be signed in their respective names as 
of the day and year first above written.
SOCIALIST FEDERAL REPUBLIC OF YUGOSLAVIA
By /s/ I. Zivkovic
Authorized Representative
INTERNATIONAL BANK FOR RECONSTRUCTION
  AND DEVELOPMENT
as Administrator of the Grant
By /s/ H. Kohli
Authorized Representative
SCHEDULE 1
Withdrawal of the Grant
1.
The table below sets forth the Categories of items to be financed out of the 
Grant, the allocation of the amount of the Grant to each Category and the percentage 
of expenditures for items so to be financed in each Category:
Amount of the
     % of
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Grant Allocated
 Expenditures
Category
(Expressed in Yen)
to be Financed
(1)
Goods
   12,800,000
100%
(2)
Consultants'
   60,000,000
100%
Services
TOTAL
   72,800,000
2.
Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be 
made in respect of payments made for expenditures prior to the date of this Agreement.
SCHEDULE 2
Description of Technical Assistance
The objectives of the Technical Assistance are to prepare the sewerage component 
of the proposed Belgrade Environment Project for implementation by: (i) defining the 
appropriate level of treatment of sewage discharges to the Danube and Sava Rivers at 
Belgrade for both the short- and long-term; (ii) preparing the sewerage treatment 
component of the proposed Project for implementation; and (iii) preparing action plans 
and terms of reference for the technical assistance component of the proposed project.
The Technical Assistance consists of the following parts subject to such 
modifications thereof as the Bank and the Recipient may agree upon from time to time 
to achieve such objectives.
Part A:
Feasibility Studies and Planning
(1)
Assessment of the water quality of the Sava and Danube Rivers upstream and 
downstream of the City of Belgrade to determine the effects of existing sewage 
discharges, including discharges from storm water overflows, and the improvement in 
water quality that could be derived from different levels of pollution control of 
these discharges.
(2)
Carrying out of an industrial waste survey, the identification of control 
measures and the preparation of an action plan for implementation of the recommended 
control measures.
(3)
Carrying out of a study on conveying municipal waste water from the Sava River 
basin to the Danube River basin.
(4)
Carrying out of a study of the possibilities and justification of the 
centralized treatment of sludge from Belgrade's five proposed sewage treatment plants.
Part B:
Design and Environmental Assessment
(1)
Preparation of preliminary and final designs, cost estimates and tender 
documents for the Visnjica tunnel.
(2)
Preparation of preliminary and final designs, cost estimates and tender 
documents for the reconstruction of the Usce Sewage Pump Station and the Sava River 
Siphon.
(3)
Preparation of preliminary and final designs, cost estimates, tender documents 
and an environmental assessment of the Veliko Selo Sewage Treatment Plant.
(4)
Preparation of preliminary and final designs, cost estimates, tender documents 
and an environmental assessment of the Batajnica Sewage Treatment Plant.
(5)
Preparation of preliminary and final designs, cost estimates, tender documents 
and an environmental assessment of the Ostruznica Sewage Treatment Plant.
Part C:
Technical Assistance Planning
(1)
Preparation of terms of reference for the design and implementation of 
information systems for routine maintenance of existing sewerage works and new 
facilities to be constructed under the Project.
(2)
Preparation of terms of reference for construction management services for the 
new facilities to be constructed under the Project.
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SCHEDULE 3
Implementation Program
The Technical Assistance shall be implemented in accordance with the following 
program set forth below, subject to such modifications thereof as the Recipient and 
the Administrator may agree upon from time to time.
·
Submission to the Bank of
June 30, 1992
feasibility study reports and
terms of reference for project
related technical assistance
·
Submission to the Bank of
December 31, 1992
preliminary designs reports,
cost estimates and
environmental assessments for
the first stage project
·
Submission to the Bank of
June 30, 1993
final designs and bidding
documents
SCHEDULE 4
Procurement and Consultants' Services
Section I.  Procurement of Goods
Part A:
Goods may be procured under contracts awarded on the basis of comparison of 
price quotations solicited from a list of at least three suppliers from two different 
countries eligible under the "Guidelines for Procurement under IBRD Loans and IDA 
Credits" published by the Bank in May 1985 (the Guidelines), in accordance with 
procedures acceptable to the Administrator.
Part B:
Review by the Administrator of Procurement Decisions
1.
The procedures set forth in paragraphs 3 and 4 of Appendix 1 to the Guidelines 
shall apply.
2.
The figure of 20% is hereby specified for purposes of paragraph 4 of Appendix 1 
to the Guidelines.
Section II.  Employment of Consultants
The Technical Assistance shall be provided by consultants employed by the 
Recipient, whose qualifications, experience and terms and conditions of employment 
shall be satisfactory to the Administrator. Such consultants shall be selected in 
accordance with principles and procedures satisfactory to the Administrator on the 
basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by The 
World Bank as Executing Agency" published by the Bank in August 1981.