Page  1
CONFORMED COPY
CREDIT NUMBER 3246 GH
Development Credit Agreement
(National Functional Literacy Project)
between
REPUBLIC OF GHANA
and
INTERNATIONAL DEVELOPMENT ASSOCIATION
Dated December 13, 1999
CREDIT NUMBER 3246 GH 
DEVELOPMENT CREDIT AGREEMENT 
AGREEMENT, dated December 13, 1999, between REPUBLIC OF GHANA (the Borrower) and 
INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). 
WHEREAS the Borrower, having satisfied itself as to the feasibility and priority 
of the Project described in Schedule 2 to this Agreement, has requested the 
Association to assist in the financing of the Project; and 
WHEREAS the Association has agreed, on the basis, inter alia, of the foregoing, 
to extend the Credit to the Borrower upon the terms and conditions set forth in this 
Agreement;
NOW THEREFORE the parties hereto hereby agree as follows: 
ARTICLE I 
General Conditions; Definitions 
Section 1.01. The "General Conditions Applicable to Development Credit 
Agreements" of the Association, dated January 1, 1985 (as amended through December 2, 
1997), with the modifications set forth below, (the General Conditions) constitute an 
integral part of this Agreement.
Page  2
(a)
A new paragraph 12 is added to Section 2.01 to read as set forth below, 
and the existing paragraphs 12 through 14 of said Section are accordingly renumbered 
as paragraphs 13 through 15:  
“12.
‘Participating Country’ means any country that the Association 
determines 
meets the requirements set forth in Section 10 of Resolution No. 
183 of the Board of 
Governors of the Association, adopted on June 26, 
1996; and ‘Participating Countries’ means, 
collectively, all such countries.”
(b)
The second sentence of Section 5.01 is modified to read: 
“Except as the Borrower and the Association shall otherwise agree, no 
withdrawals 
shall be made (a) on account of expenditures in the territories of 
any country which is not 
a Participating Country or for goods produced in, or 
services supplied from, such 
territories; or (b) for the purpose of 
any payment to persons or entities, or for any import 
of goods, if such payment 
or import, to the knowledge of the Association, is prohibited by a 
decision of 
the United Nations Security Council taken under Chapter VII of the Charter of 
the 
United Nations.”
Section 1.02. Unless the context otherwise requires, the several terms defined 
in the General Conditions and in the Preamble to this Agreement have the respective 
meanings therein set forth, and the following additional terms have the following 
meanings:
(a)
“FPMU” means the Funds and Procurement Management Unit established within 
the Borrower’s Ministry of Education;
(b)
“NFED” means the Non-Formal Education Division in the Borrower’s Ministry 
of Education; 
(c)
“PIP” means the Project Implementation Plan referred to in paragraph 1 of 
Schedule 4 to this Agreement containing, inter alia, work plans, training plans, 
monitoring and performance indicators, and procedures to be used for the purposes of 
implementation of the Project, as they may be amended from time to time, in 
consultation with the Association, and such item includes any schedules to the PIP; 
(d)
“Project Management Report” means each report prepared in accordance with 
Section 4.02 of this Agreement; 
(e)
“Project Preparation Advance” means the project preparation advance 
granted by the Association to the Borrower pursuant to an exchange of letters dated 
February 16, 1999 between the Borrower and the Association; and 
(f)
“Special Account” means the account referred to in Section 2.02 (b) of 
this Agreement. 
ARTICLE II 
The Credit 
Section 2.01. The Association agrees to lend to the Borrower, on the terms and 
conditions set forth or referred to in the Development Credit Agreement, an amount in 
various currencies equivalent to twenty-three million, seven hundred thousand Special 
Drawing Rights (SDR 23,700,000).
Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit 
Account in accordance with the provisions of Schedule 1 to this Agreement for 
expenditures made (or, if the Association shall so agree, to be made) in respect of 
the reasonable cost of goods and services required for the Project described in 
Schedule 2 to this Agreement and to be financed out of the proceeds of the Credit. 
(b)
The Borrower may, for the purposes of the Project, open and maintain in 
dollars a special deposit account in a commercial bank on terms and conditions 
satisfactory to the Association, including appropriate protection against set-off, 
seizure or attachment. Deposits into, and payments out of, the Special Account shall 
Page  3
be made in accordance with the provisions of Schedule 5 to this Agreement. 
(c)
Promptly after the Effective Date, the Association shall, on behalf of 
the Borrower, withdraw from the Credit Account and pay to itself the amount required 
to repay the principal amount of the Project Preparation Advance withdrawn and 
outstanding as of such date and to pay all unpaid charges thereon.  The unwithdrawn 
balance of the authorized amount of the Project Preparation Advance shall thereupon be 
canceled.
Section 2.03. The Closing Date shall be December 31, 2004 or such later date as 
the Association shall establish.  The Association shall promptly notify the Borrower 
of such later date. 
Section 2.04. (a) The Borrower shall pay to the Association a commitment charge 
on the principal amount of the Credit not withdrawn from time to time at a rate to be 
set by the Association as of June 30 of each year, but not to exceed the rate of 
one-half of one percent (1/2 of 1%) per annum. 
(b)
The commitment charge shall accrue (i) from the date sixty days after the 
date of this Agreement (the accrual date) to the respective dates on which amounts 
shall be withdrawn by the Borrower from the Credit Account or canceled; and (ii) at 
the rate set as of the June 30 immediately preceding the accrual date and at such 
other rates as may be set from time to time thereafter pursuant to paragraph (a) 
above. The rate set as of June 30 in each year shall be applied from the next date in 
that year specified in Section 2.06 of this Agreement.
(c)
The commitment charge shall be paid: (i) at such places as the 
Association shall reasonably request; (ii) without restrictions of any kind imposed 
by, or in the territory of, the Borrower; and (iii) in the currency specified in this 
Agreement for the purposes of Section 4.02 of the General Conditions or in such other 
eligible currency or currencies as may from time to time be designated or selected 
pursuant to the provisions of that Section. 
Section 2.05. The Borrower shall pay to the Association a service charge at the 
rate of three-fourths of one percent (3/4 of 1%) per annum on the principal amount of 
the Credit withdrawn and outstanding from time to time. 
Section 2.06. Commitment charges and service charges shall be payable 
semiannually on November 1 and May 1 in each year. 
Section 2.07. (a) Subject to paragraphs (b), (c), and (d) below, the Borrower 
shall repay the principal amount of the Credit in semiannual installments payable on 
each November 1 and May 1, commencing November 1, 2009 and ending May 1, 2039. Each 
installment to, and including the installment payable on, May 1, 2019 shall be one 
percent (1%) of such principal amount, and each installment thereafter shall be two 
percent (2%) of such principal amount.
(b)
Whenever (i) the Borrower's per capita gross national product (GNP), as 
determined by the Association, shall have exceeded for three consecutive years  the 
level established annually by the Association for determining eligibility to access 
the Association's resources; and (ii) the Bank shall consider the Borrower 
creditworthy for Bank lending, the Association may, subsequent to the review and 
approval thereof by the Executive Directors of the Association and after due 
consideration by them of the development of the Borrower's economy, modify the 
repayment of installments under paragraph (a) above by: (A) requiring the Borrower to 
repay twice the amount of each such installment not yet due until the principal amount 
of the Credit shall have been repaid; and (B) requiring the Borrower to commence 
repayment of the principal amount of the Credit as of the first semiannual payment 
date referred to in paragraph (a) above falling six months or more after the date on 
which the Association notifies the Borrower that the events set out in this paragraph 
(b) have occurred, provided, however, that there shall be a grace period of a minimum 
of five years on such repayment of principal.
(c)
If so requested by the Borrower, the Association may revise the 
modification referred to in paragraph (b) above to include, in lieu of some or all of 
the increase in the amounts of such installments, the payment of interest at an annual 
rate agreed with the Association on the principal amount of the Credit withdrawn and 
Page  4
outstanding from time to time, provided that, in the judgment of the Association, such 
revision shall not change the grant element obtained under the above-mentioned 
repayment modification. 
(d)
If, at any time after a modification of terms pursuant to paragraph (b) 
above, the Association determines that the Borrower's economic condition has 
deteriorated significantly, the Association may, if so requested by the Borrower, 
further modify the terms of repayment to conform to the schedule of installments as 
provided in paragraph (a) above. 
Section 2.08. The currency of the United States of America is hereby specified 
for the purposes of Section 4.02 of the General Conditions. 
ARTICLE III 
Execution of the Project
Section 3.01. (a) The Borrower declares its commitment to the objectives of the 
Project as set forth in Schedule 2 to this Agreement and, to this end, shall carry out 
the Project with due diligence and efficiency and in conformity with appropriate 
administrative, financial, technical, and educational practices, and shall provide, 
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 Borrower and the Association shall otherwise agree, the Borrower 
shall carry out the Project in accordance with the Implementation Program set forth in 
Schedule 4 to this Agreement. 
Section 3.02. Except as the Association shall otherwise agree, procurement of 
the goods, works, and consultants' services required for the Project and to be 
financed out of the proceeds of the Credit shall be governed by the provisions of 
Schedule 3 to this Agreement.
Section 3.03. For the purposes of Section 9.07 of the General Conditions and 
without limitation thereto, the Borrower shall: 
(a)
prepare, on the basis of guidelines acceptable to the Association and 
furnish to the Association not later than six (6) months after the Closing Date or 
such later date as may be agreed for this purpose between the Borrower and the 
Association, a plan for the future operation of the Project; and 
(b)
afford the Association a reasonable opportunity to exchange views with 
the Borrower on said plan. 
Section 3.04. The Borrower shall, (a) not later than December 31, 2000, prepare 
the human resource development and staff decentralization strategy for NFED acceptable 
to the Association; and (b) not later than December 31, 2002, implement said strategy. 
Section 3.05. The Borrower shall, not later than December 31, 2001, prepare a 
non-formal education policy framework satisfactory to the Association and, thereafter, 
implement the actions under the framework agreed upon with the Association. 
ARTICLE IV
Financial Covenants 
Section 4.01. (a) The Borrower shall maintain or cause to be maintained records 
and accounts adequate to reflect, in accordance with sound accounting practices, the 
operations, resources, and expenditures in respect of the Project of the departments 
or agencies of the Borrower responsible for carrying out the Project or any part 
thereof.
(b)
The Borrower shall: 
(i)
have the records and accounts referred to in paragraph (a) of this 
Page  5
Section, 
including those for the Special Account, for each fiscal 
year audited, in 
accordance with appropriate auditing 
principles consistently applied, by 
independent auditors 
acceptable to the Association;
(ii)
f
urnish to the Association as soon as available, but in any case 
not later than 
six months after the end of each such year, the 
report of such audit by said 
auditors, of such scope and in such 
detail as the Association shall have 
reasonably requested; and
(iii)
furnish to the Association as soon as available, but in any case 
not later 
than six months after the end of each such year, the 
report of such audit by 
said auditors, of such scope and in such 
detail as the Association shall have 
reasonably requested.
(c)
For all expenditures with respect to which withdrawals from the Credit 
Account were made on the basis of statements of expenditure or Project Management 
Reports, the Borrower shall: 
(i)
maintain or cause to be maintained, in accordance with paragraph 
(a) of this 
Section, records and accounts reflecting such expenditures;
(ii)
retain, until at least one year after the Association has received 
the audit 
report for the fiscal year in which the last withdrawal from 
the Credit 
Account was made, all records (contracts, orders, 
invoices, bills, receipts, 
and other documents) evidencing such 
expenditures;
(iii)
enable the Association’s representatives to examine such records; 
and
(iv)
ensure that such records and accounts are included in the annual 
audit 
referred to in paragraph (b) of this Section and that the 
report of such audit 
contains a separate opinion by said auditors 
as to whether the statements of 
expenditure submitted during such fiscal 
year, together with the procedures 
and internal controls involved in 
their preparation, can be relied upon to 
support the related 
withdrawals.
Section 4.02. (a) Without limitations upon the provisions of Section 4.01 of 
this Agreement, the Borrower shall carry out a time-bound action plan acceptable to 
the Association for the strengthening of its financial system for the Project in order 
to enable the Borrower, not later than twenty months after the Effective Date, or such 
later date as the Association shall agree, to prepare quarterly Project Management 
Reports acceptable to the Association.  Each such report shall: 
(i)
set forth actual sources and application of funds for the Project, 
both 
cumulatively and for the period covered by said report, and 
projected sources 
and application of funds for the Project for the 
six-month period following 
the period covered by said report, and 
show separately expenditures financed 
out of the proceeds of the Credit 
during the six-month period following the 
period covered by said 
report; 
(ii)
describe physical progress in Project implementation, both 
cumulatively and 
for the period covered by said report, and explain 
variances between the 
actual and previously forecast 
implementation targets; and
(iii)
set forth the status of procurement under the Project and 
expenditures under 
contracts financed out of the proceeds of the Credit, 
as at the end of the 
period covered by said report. 
(b)
Upon completion of the action plan referred to in paragraph (a) of this 
Section, the Borrower shall prepare, in accordance with guidelines acceptable to the 
Association, and furnish to the Association, not later than 45 days after the end of 
each calendar quarter, a Project Management Report for such period. 
Page  6
ARTICLE V 
Effective Date; Termination
Section 5.01. The following events are specified as additional conditions to the 
effectiveness of the Development Credit Agreement within the meaning of Section 12.01 
(b) of the General Conditions: 
(a)
the Borrower has (i) prepared the manual of procedures satisfactory to 
the Association for the financial management and accounting section of the FPMU; (ii) 
appointed one senior accountant and two accounts officers for the FPMU, and a 
principal accountant for the NFED, all with experience and qualifications satisfactory 
to the Association;  
(b)
the Borrower has (i) prepared the manual of procedures satisfactory to 
the Association for the procurement section of the FPMU; and (ii) appointed a deputy 
director responsible for procurement and a procurement officer for the FPMU, all with 
experience and qualifications satisfactory to the Association; and   
(c)
the Borrower has prepared procedures for learner assessments and tracer 
studies satisfactory to the Association. 
Section 5.02. The date ninety (90) days after the date of this Agreement is 
hereby specified for the purposes of Section 12.04 of the General Conditions.
ARTICLE VI 
Representative of the Borrower; Addresses 
Section 6.01. The Minister of the Borrower at the time responsible for finance 
is designated as representative of the Borrower for the purposes of Section 11.03 of 
the General Conditions.
Section 6.02. The following addresses are specified for the purposes of 
Section 11.01 of the General Conditions:
For the Borrower:
Minister of Finance
Ministry of finance
P.O.Box M40
Accra, Ghana
Cable address: 
Telex:
2205 MIFAEPGH
For the Association:
International Development Association
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address: 
Telex:
INDEVAS
248423 (MCI) or
Washington, D.C.
 64145 (MCI)
IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized 
representatives, have caused this Agreement to be signed in their respective names in 
Accra, Ghana, as of the day and year first above written.
REPUBLIC OF GHANA
Page  7
By /s/ Davod Pseo-Wusu 
Authorized Representative
INTERNATIONAL DEVELOPMENT ASSOCIATION
By /s/ Jean-Louis Sarbib 
Regional Vice President 
Africa
SCHEDULE 1
Withdrawal of the Proceeds of the Credit 
1.
The table below sets forth the Categories of items to be financed out of the 
proceeds of the Credit, the allocation of the amounts of the Credit to each Category 
and the percentage of expenditures for items so to be financed in each Category:
 Amount of the
Credit Allocated
   % of
(Expressed in 
Expenditures
Category
SDR Equivalent)
to be Financed
(1)
Civil works
    75,000
100% of foreign
expenditures and
80% of local
expenditures
(2)
Equipment, vehicles
 8,400,000
100% of foreign
and class materials
expenditures and
80% of local
expenditures
(3)
Printed materials
 4,950,000
100% of foreign
expenditures and
80% of local 
expenditures
(4)
Radio expansion 
under Part C of 
the Project:
(a)
Equipment, 
   600,000
100% of foreign
vehicles and 
expenditures and
materials
80% of local
expenditures
(b)
Consultants’ 
   400,000
100%
services and 
training 
(5)
Consultants' services
 4,200,000
100%
and training
(6)
Operating costs
 3,000,000
80%
(7)
Refunding of 
   375,000
Amounts due pursuant
Project Preparation 
to Section 2.02 (c)
Advance
of this Agreement
Page  8
(8)
Unallocated
 1,700,000
TOTAL
23,700,000
2.
For the purposes of this Schedule:
(a)
the term "foreign expenditures" means expenditures in the currency of any 
country other than that of the Borrower for goods or services supplied from the 
territory of any country other than that of the Borrower ;
(b)
the term "local expenditures" means expenditures in the currency of the 
Borrower or for goods or services supplied from the territory of the Borrower; and 
(c)
the term "operating costs" means the incremental expenses incurred on 
account of Project implementation, management, and monitoring, including costs for 
Project supervision, travel costs, and travel allowances, but excluding salaries of 
officials of the Borrower. 
3.
Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be 
made in respect of payments made for (a) expenditures prior to the date of this 
Agreement; and (b) expenditures under Category (4) unless the Borrower has carried out 
and has furnished to the Association, under terms of reference satisfactory to the 
Association, (i) an impact assessment study of existing radio broadcasting on literacy 
classes, (ii) a feasibility study for the expansion of radio broadcasting, and (iii) a 
feasibility study for radio support for English language classes. 
4.
The Association may require withdrawals from the Credit Account to be made on 
the basis of statements of expenditure for (a) expenditures under contracts costing 
less than $100,000 equivalent for goods, less than $50,000 equivalent for consulting 
firms, and less than $25,000 equivalent for individual consultants; (b) operating 
costs; and (c) training; all under such terms and conditions as the Association shall 
specify by notice to the Borrower.
SCHEDULE 2 
Description of the Project 
The objective of the Project is to assist the Borrower in delivering quality, 
cost-effective basic functional literacy skills in fifteen national languages to about 
one million adults, particularly women and the rural poor.
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:
Basic Literacy 
1.
Carrying out a program to teach basic literacy, numeracy, and functional skills 
to adults in fifteen national languages, through the acquisition of classroom inputs, 
reading and other materials, working tools and training for facilitators and 
supervisors. 
2.
Carrying out a post-literacy program to teach the English language to adults on 
a pilot basis.
Part B:
Monitoring, Evaluation and Research
Strengthening the capacity of the Borrower to carry out a program of monitoring 
and evaluation of the adult literacy activities, including the carrying out of 
supervision of the Project, learner assessments, tracer studies, and research through 
the training of supervisors and facilitators, the acquisition of manuals, the 
improvement of management information systems, the acquisition of materials, vehicles, 
equipment, and the provision of technical advisory services.
Part C:
Radio Broadcasting 
1.
Improving existing radio broadcasting, including producing new radio programs to 
Page  9
support literacy classes through the provision of technical advisory services, 
training, and the acquisition of materials. 
2.
Expanding the coverage of radio broadcasts, including the operation of 
additional networks, through the acquisition of materials and equipment, and the 
provision of technical advisory services.
Part D:
Institutional Support to the NFED 
1.
Strengthening the NFED’s capacity to carry out the Project through training of 
NFED staff, the provision of technical advisory services, and the acquisition of 
equipment, vehicles, and other means of transportation. 
2.
Developing and implementing a human resource development strategy for the NFED. 
3.
Developing and implementing a strategy for strengthening the decentralization of 
the NFED to regions and districts. 
4.
Developing a medium-term, non-formal education policy framework. 
5.
(a)
Establishing a database of organizations providing literacy services 
through surveys, data collection, and technical advisory services.
(b)
Establishing partnerships with other literacy providers and 
non-government organizations through the carrying out of pilot activities. 
6.
Strengthening learners’ capacity to obtain financing for, and manage, 
income-generating activities through the provision of technical advisory services.
Part E:
Literate Environment
Developing a literate environment to sustain the literacy skills of newly 
trained adults through the introduction and acquisition of reading materials, and the 
provision of technical advisory services. 
* * * 
The Project is expected to be completed by June 30, 2004.
SCHEDULE 3 
Procurement and Consultants' Services 
Section I.
Procurement of Goods and Works
Part A:
General 
1.
Goods and works shall be procured in accordance with the provisions of Section I 
of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the 
Bank in January 1995 and revised in January and August 1996 and September 1997 and 
January 1999 (the Guidelines) and the following provisions of this Section. 
2.
In paragraphs 1.6 and 1.8 of the Guidelines, the references to “Bank member 
countries” and “member country” shall be deemed to be references, respectively, to 
“Participating Countries” and “Participating Country.”
Part B:
International Competitive Bidding 
1.
Except as otherwise provided in Part C of this Section, goods 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 goods to be procured under contracts 
awarded in accordance with the provisions of paragraph 1 of this Part B. 
(a)
Grouping of Contracts 
Page  10
To the extent practicable, contracts for goods shall be grouped in bid packages 
estimated to cost $100,000 equivalent or more each. 
(b)
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. 
(c)
Notification and Advertising 
The invitation to prequalify or bid for each contract estimated to cost $100,000 
equivalent or more shall be advertised in accordance with the procedures applicable to 
large contracts under paragraph 2.8 of the Guidelines.
Part C:
Other Procurement Procedures 
1.
National Competitive Bidding
Goods and works estimated to cost less than $100,000 equivalent per contract, up 
to an aggregate amount not to exceed $10,400,000 equivalent, may be procured under 
contracts awarded in accordance with the provisions of paragraphs 3.3 and 3.4 of the 
Guidelines. 
2.
National Shopping
Goods and printed materials estimated to cost less than $50,000 equivalent per 
contract, up to an aggregate amount not to exceed $1,700,000 equivalent, may be 
procured under contracts awarded on the basis of national shopping procedures in 
accordance with the provisions of paragraphs 3.5 and 3.6 of the Guidelines. 
3.
Direct Contracting
Goods which must be purchased from the original supplier to be compatible with 
existing equipment and costing $200,000 equivalent or less in the aggregate may, with 
the Association's prior agreement, be procured in accordance with the provisions of 
paragraph 3.7 of the Guidelines.
Part D:
Review by the Association of Procurement Decisions 
1.
Procurement Planning 
Prior to the issuance of any invitations to prequalify for bidding or to bid for 
contracts, the proposed procurement plan for the Project shall be furnished to the 
Association for its review and approval, in accordance with the provisions of 
paragraph 1 of Appendix 1 to the Guidelines. Procurement of all goods and works shall 
be undertaken in accordance with such procurement plan as shall have been approved by 
the Association and with the provisions of said paragraph 1. 
2.
Prior Review 
(a)
With respect to each contract estimated to cost the equivalent of 
$100,000 or more, the procedures set forth in paragraphs 2 and 3 of Appendix 1 to the 
Guidelines shall apply. 
3.
Post Review 
With respect to each contract not governed by paragraph 2 of this Part, the 
procedures set forth in paragraph 4 of Appendix 1 to the Guidelines shall apply. 
Section II.
Employment of Consultants
Part A:
General
1.
Consultants’ services shall be procured in accordance with the provisions of the 
Introduction and Section IV of the "Guidelines:  Selection and Employment of 
Consultants by World Bank Borrowers" published by the Bank in January 1997 and revised 
in September 1997 and January 1999 (the Consultant Guidelines) and the following 
Page  11
provisions of Section II of this Schedule. 
2.
In paragraph 1.10 of the Consultant Guidelines, the references to “Bank member 
countries” and “member country” shall be deemed to be references, respectively, to 
“Participating Countries” and “Participating Country.”
Part B:
Quality- and Cost-Based Selection 
1.
Except as otherwise provided in Part C of this Section, consultants’ services 
shall be procured under contracts awarded in accordance with the provisions of Section 
II of the Consultant Guidelines, paragraph 3 of Appendix 1 thereto, Appendix 2 
thereto, and the provisions of paragraphs 3.13 through 3.18 thereof applicable to 
quality- and cost-based selection of consultants. 
2.
The following provisions shall apply to consultants’ services to be procured 
under contracts awarded in accordance with the provisions of the preceding paragraph.  
The shortlist of consultants for services for the development and revision of reading 
and instructional materials, estimated to cost less than $100,000 equivalent per 
contract, may comprise entirely national consultants in accordance with the provisions 
of paragraph 2.7 of the Consultant Guidelines.
Part C:
Other Procedures for the Selection of Consultants 
1.
Quality-Based Selection
Services for tasks that meet the requirements set forth in paragraph 3.02 of the 
Consultant Guidelines shall be procured under contracts awarded in accordance with the 
provisions of paragraphs 3.1 through 3.4 of the Consultant Guidelines. 
2.
Least-Cost Selection
Services for surveys, data collection and processing, training workshops, 
supervision, and audits estimated to cost less than $100,000 equivalent per contract 
may be procured under contracts awarded in accordance with the provisions of 
paragraphs 3.1 and 3.6 of the Consultant Guidelines. 
3.
Selection Based on Consultants’ Qualifications
Services for tasks for which the need for preparing and evaluating competitive 
proposals is not justified, estimated to cost less than $50,000 equivalent per 
contract, may be procured under contracts awarded in accordance with the provisions of 
paragraphs 3.1 and 3.7 of the Consultant Guidelines. 
4.
Single-Source Selection
Services for tasks that meet the requirements set forth in paragraph 3.9 of the 
Consultant Guidelines may, with the Association's prior agreement, be procured in 
accordance with the provisions of paragraphs 3.8 through 3.11 of the Consultant 
Guidelines. 
5.
Individual Consultants
Services for tasks that meet the requirements set forth in paragraph 5.01 of the 
Consultant Guidelines shall be procured under contracts awarded to individual 
consultants in accordance with the provisions of paragraphs 5.1 through 5.3 of the 
Consultant Guidelines.
Part D:
Review by the Association of the Selection of Consultants 
1.
Selection Planning 
Prior to the issuance to consultants of any requests for proposals, the proposed 
plan for the selection of consultants under the Project shall be furnished to the 
Association for its review and approval, in accordance with the provisions of 
paragraph 1 of Appendix 1 to the Consultant Guidelines.  Selection of all consultants’ 
services shall be undertaken in accordance with such selection plan as shall have been 
approved by the Association and with the provisions of said paragraph 1. 
Page  12
2.
Prior Review
(a)
With respect to each contract for the employment of consulting firms  
estimated to cost the equivalent of $50,000 or more, the procedures set forth in 
paragraphs 1, 2 (other than the third subparagraph of paragraph 2(a)), and 5 of 
Appendix 1 to the Consultant Guidelines shall apply.
(b)
With respect to each contract for the employment of consulting firms  
estimated to cost the equivalent of $25,000 or more, but less than the equivalent of 
$50,000, the procedures set forth in paragraphs 1, 2 (other than the second 
subparagraph of paragraph 2(a)), and 5 of Appendix 1 to the Consultant Guidelines 
shall apply.
(c)
With respect to each contract for the employment of individual 
consultants estimated to cost the equivalent of $25,000 or more, the qualifications, 
experience, terms of reference and terms of employment of the consultants shall be 
furnished to the Association for its prior review and approval. The contract shall be 
awarded only after said approval shall have been given. 
3.
Post Review
With respect to each contract not governed by paragraph 2 of this Part, the 
procedures set forth in paragraph 4 of Appendix 1 to the Consultant Guidelines shall 
apply.
SCHEDULE 4 
Implementation Program 
1.
Except as the Association shall otherwise agree, the Borrower shall carry out 
the Project in accordance with the Project Implementation Plan and shall not amend the 
Project Implementation Plan or waive any provision thereof which, in the opinion of 
the Association, will adversely affect the implementation of the Project.
2.
The Borrower shall: 
(a)
maintain policies and procedures adequate to enable it to monitor and 
evaluate on an ongoing basis, in accordance with indicators acceptable to the 
Association, the carrying out of the Project and the achievement of the objectives 
thereof; 
(b)
prepare, under terms of reference satisfactory to the Association, and 
furnish to the Association, on or about March 1 of each year, an annual report 
integrating the results of the monitoring and evaluation activities performed pursuant 
to subparagraph (a) of this paragraph, on the progress achieved in the carrying out of 
the Project during the period preceding the date of said report and setting out the 
measures recommended to ensure the efficient carrying out of the Project and the 
achievement of the objectives thereof during the period following such date;  
(c)
review with the Association, by March 31 of each year, or such later date 
as the Association shall request, the report referred to in subparagraph (b) of this 
paragraph and, thereafter, take all measures required to ensure the efficient 
completion of the Project and the achievement of the objectives thereof, based on the 
conclusions and recommendations of the said report and the Association’s views on the 
matter; 
(d)
furnish to the Association, by March 31 of each year, an annual work 
program for the following two years, including budget estimates and financing to 
support the Project; and 
(e)
review with the Association, by June 30 of each year, such annual 
program, budget and financing plan and carry out the Project in accordance with the 
annual work program, as agreed with the Association.
3.
The Borrower shall:
(a)
not later than June 30, 2002, carry out jointly with the Association a 
Page  13
midterm review.  Such review shall assess the following: (i) the overall progress in 
the implementation of the Project; (ii) the results of the monitoring and evaluation 
activities; and (iii) Project costs and financing; 
(b)
three months before such review, prepare and furnish to the Association 
reports, in scope and detail satisfactory to the Association, needed to undertake the 
review, including preparation of a program of action, to deal with deficiencies in 
Project implementation identified prior to such review; and 
(c)
based on such review, promptly prepare an action plan, satisfactory to 
the Association, for the further implementation of the Project and shall thereafter 
implement such action plan.
SCHEDULE 5 
Special Account
1.
For the purposes of this Schedule: 
(a)
the term "eligible Categories" means Categories (1) through (6) set forth 
in the table in paragraph 1 of Schedule 1 to this Agreement; 
(b)
the term "eligible expenditures" means expenditures in respect of the 
reasonable cost of goods and services required for the Project and to be financed out 
of the proceeds of the Credit allocated from time to time to the eligible Categories 
in accordance with the provisions of Schedule 1 to this Agreement; and 
(c)
the term "Authorized Allocation" means an amount equivalent to $1,500,000 
to be withdrawn from the Credit Account and deposited into the Special Account 
pursuant to paragraph 3 (a) of this Schedule, 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 5,000,000.
2.
Payments out of the Special Account shall be made exclusively for eligible 
expenditures in accordance with the provisions of this Schedule.
3.
After the Association has received evidence satisfactory to it that the Special 
Account has been duly opened, 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 do not exceed the aggregate amount of the Authorized 
Allocation. On the basis of such request or requests, the Association shall, on behalf 
of the Borrower, withdraw from the Credit Account and deposit into the Special Account 
such amount or amounts as the Borrower shall have requested. 
(b)
(i)
For replenishment of the Special Account, the Borrower shall 
furnish to the 
Association requests for deposits into the Special 
Account at such intervals 
as the Association shall specify.
(ii)
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 
paragraph 4 of this Schedule for the payment or 
payments in respect of which 
replenishment is requested. On the basis 
of each such request, the Association 
shall, on behalf of 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. All such deposits 
shall be withdrawn by the Association from the Credit Account under the 
respective eligible Categories, and in the respective equivalent amounts, as 
shall have been justified by said documents and other evidence. 
Page  14
4.
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.
5.
Notwithstanding the provisions of paragraph 3 of this Schedule, the Association 
shall not be required to make further deposits into the Special Account: 
(a)
if, at any time, the Association shall have determined that all further 
withdrawals should be made by the Borrower directly from the Credit Account in 
accordance with the provisions of Article V of the General Conditions and paragraph 
(a) of Section 2.02 of this Agreement; 
(b)
if the Borrower shall have failed to furnish to the Association, within 
the period of time specified in Section 4.01 (b) (ii) of this Agreement, any of the 
audit reports required to be furnished to the Association pursuant to said Section in 
respect of the audit of the records and accounts for the Special Account; 
(c)
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 the provisions of Section 6.02 of the General 
Conditions; or
(d)
once the total unwithdrawn amount of the Credit allocated to the eligible 
Categories, minus the total amount of all outstanding special commitments entered into 
by the Association pursuant to Section 5.02 of the General Conditions with respect to 
the Project, shall equal the equivalent of twice the amount of the Authorized 
Allocation.  Thereafter, withdrawal from the Credit Account of the remaining 
unwithdrawn amount of the Credit allocated to the eligible Categories 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 the Special 
Account as of the date of such notice will be utilized in making payments for eligible 
expenditures.
6.
(a)
If the Association shall have determined at any time that any payment out 
of the Special Account (i) was made for an expenditure or in an amount not eligible 
pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence 
furnished to the Association, the Borrower shall, promptly upon notice from the 
Association: (A) provide such additional evidence as the Association may request; or 
(B) deposit into the Special Account (or, if the Association shall so request, refund 
to the Association) an amount equal to the amount of such payment or the portion 
thereof not so eligible or justified. 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 shall have determined at any time that any amount 
outstanding in the Special Account will not be required to cover further payments for 
eligible expenditures, 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 paragraphs 6 (a), (b), and 
(c) of this Schedule shall be credited to the Credit Account for subsequent withdrawal 
or for cancellation in accordance with the relevant provisions of this Agreement, 
including the General Conditions.