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A.IoD. Proiect No. 497-0252
I ,OJFC:T GRANT AGREEMENT

Dated: August 31

, 1978

Be tween GOVERNMENT OF INDONESIA
And

THE UNITED STATES OF AMERICA, acting through the
Agency for International Dcv"' lopment ("A. I.D. ").

Article 1:

The Agreement

The purpose of this Agreement is to set out.the
understandings of the parties named above ("Parties' 1 )
with respect to the undertaking by the Gr ttee of the
Project desc ·ibed below, and with respect to the financing of the Project by the PcL ties.

Article 2:

The Project

SECTION 2.1 .

Definition of Pro iec t .

which is further described

j 1

The Project,

Am;.2x 1, will consist of

financ ; ng the foreign exchange and local currency costs rf
consultant
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gation program.

and training for Grantee's simple irriSuch servic 0 s ' re designed to assist the

Grantee in planning and implementing Sederhana (Simple)
irrigation systems including both the physical systems and
the social infrastructure which are essential for adequate
ope ration and maintenance of the systems.
Annex 1, attached which forms a part of this Agreement
amplifies the above definition of the Project.

Within the

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limits of Lhe above definiti n of the Project, elements of
the amplified descriptio


stated in Annex 1 may be changed

by written agreement of the authorized representat

1es of

the Parties named in section 8.3, without formal amendment
of this agreement.
Article 3: ·Financing
SECTION 3.1.

The Grant.

To assist the Grantee to

meet the costs (consultant services and training) of carrying out the Project, A.ID., pursuant to the Foreign Assistance Act of 1961, as amended, agrees to grant the Grantee
lnder the terms of this Agreement not to exceed four million
five hundred thousand United States ("U.S") dollar5
($4,500,000) ("Grant").


The Grant m y be used to finance foreign exchange
and local currency costs, as defined in sections 6.1 and
6.2 of services
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SBCTION 3.2.
(a)

for the Project.
Grantee Resources for the Project

The Grantee agrees to provide or cause to be

provided for the Project all funds, in addition to the
Grant, and all other resources required to carry out the
Project effectively and in a timely manner.
of Indonesia agrees that its
on a timely basis.

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The Government
will be provided

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(b)

The resources provided by Grantee for the Project

will be not less than the equivalent of twelve million two
hundr d thousand United States dollars ($12,200,000) including

osts borne on an "in-kind" basis.
SECTION 3.3.
(a)

Project
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Completion Date


The "Project Assistance Completion Date" (PACO),

which is August 31, 1983 or such other date as the Parties
,

may agree to in writing, is the date by which the Parties
estimate that all services financed under the Grant will
have been performed and all goods financed under the Grant
will have been furnished for the Project
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contemplated in

this Agreement.
(b)

Except as A. I.D. may otherwise agree in writing ,

A.I.D. will not issue or approve documentation which would

authorize disbursement of the Gran ... for services performed
suL J equent to the
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or for goods furnis1ed for the Pro-

ject, as contemplated in this Agreement, subsequent to the
PACu.

(c)

Requests for
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accompanied by neces-

sary supporting documentation prescribed in Project Implementation Letters are to be received by A. I. D. or any bank
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in section 7.1 no 1ater than nine (9) months

following the PACD, or such other pe lod as A.I.D. agrees
to in writing.

After such period, A.I . • , giving notice

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in writing to the Grantee, may at any time or times reduce
the amount of the Grant by all or any part thereof for which
requests for disbursement, accompanie d by necessary supporting documentation prescribed in Project
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Letters,
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were not received before the expiration of said period.
Article 4:

Conditions Pre cedent to Disburs ement

SECTION 4 .1.

First Disbursement.

Prior to ,the first

di sbursement under the Grant, or to the issuance by A.I.D.
o f documentation pursuant to which disbursement will be made,
the Grantee will, except as the Parties may otherwise agree
in writing, furnish to A. I.D. in form and substance satisfactory to A.I.D.:
(a)


A statement of the name of the person holding or

acting in the offices of the
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specified in section

8.2, and of any additional representatives, together with
a specimen signature of each person sp

ified in such state-

ment.
(b)

A time schedule for the evaluation program refer-


red to in section 5.1.
SECTION 4.2.

Disbursement fJ r Trainin g.

Prior to

disbursement under the Grant or to the issuance by A.I.D.
of documentat ion pursuant to which disbursement will be
made f or training costs, the Borrower will, e xcept as the

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Parties may otherwise agree in writing, furnish to A.I.D .,
in form and substance sati sfactory to A.I.D.:
(a)

A plan which sets forth the purpose, scope and

curricula for the proposed training; and
(b)

A cost estimate for the training.

SECTION 4.3.

Nctification.

When A.I.D. has determined

that the conditions precedent specified in sections 4.1 and
,

4.2 have been met, it will promptly notify the Graatee.
SECTION 4.4.

Terminal Dates for Conditions Pree tent

If the conditions specified in section 4.1 have not
been met within 90 days from the date of this Agreement or
such later date or dates as A.I.D. may agree to in writing,
A.I.D.,at its option, may termin nte this Agreement by
written notice to Grantee.
Article 5:

Special Covenants

SECTION 5.1.

Project Evaluation.

The Parties agree

to establish an evaluation program as part of the Project.
,.. ·{cept as the Parties otherwise agree in writing, the program will include, during the implementation of the Pro ect
at one or more points thereafter:
(a)

Evaluation of progress toward attainment of the

objectives ot the Project;

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(u)

Identification and evaluation of

r oblem areas

or constraints which may inhibit such attainr nt;
(c)

\ssessment of how such i

>rrnation may be used

to help overcome such problems; and
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Evaluation, to the degree feasible, of the over-

all development ir.'pact of the Project.
SECTIQ1'1 5. 2.

Training .

The Grantee covenants that

all training carried out under the Grant will con'form ·pith
the ·raining plan submitted '·y the Grantee pursuant t o the
ovisions of section 4.2.
Article 6:
SECT J.

Procurement Source
; 6.1.

Foreign Exc .• ange Cos r s.
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pursu lt to section 7.1 will be used exclusively to finance
the costs of goods and

ervices required for the Project

having their source and origin in the United States e 2ept
as A.I.D. may otherwise agree in writing, and except as
provided in thr-> Project Grant Standard
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C.l(b) with respect to
SECTION 6 . 2.

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insurance .
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Local Currency

Annex,
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Disbursement

pursuant to section 7.2 will be used exclusively to
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the costs of goods and services required for the Project
.1a ing their source and, e:x.cept as A. I . D. may otherwise

agree in wrj ing, their origin

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Indonesia.

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AYticle 7:

Disbursement
7.1.

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(a)

Disbursement for Foreign Exchange Costs

After satisfaction of the conditions precedent,

the Grantee may obtain disbursement of funds under the Grant
for the Foreign Exchange Costs of goods or services required
for the Project j_n accordance with the terms of this Agreement,
by such of the following methods as may be mutually agreed
upon: (1) by submitting to A.I.D., with necessary' supp rting
documentation as prescribed in nroject Implementation Letters,
(A) requests for

for such goods or services, er,
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(B) requests for A.I.D. to procure commodities or services in
Grantee's behalf for the Project; or, (2) by requesting A.I.D.
to issue Letters of Commitment for specified amounts (A) to
one or more U.S. banks,
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t o A.I.D., conunitt ng

A.I .D. to reimburse such bank or banks for payments made by
them to contractors or suppliers, under Letters of Credi
or otherwise, cor such goods or services, or (B) directly
to one or more contr3ctors or suppliers, cormnitting A.I.D.
to pay such contractors or suppliers for such goods or
services.
(b)
with
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Banking charges incurred by Grantee in connection
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of Corrnnitment and Letters of Credit will be
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nanced under the Grant unless Grantee instructs A.I.D. to the
contrary.

Such other charges as the Parties may agree to may

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also be financed under the Grant.
SECTION 7.2.
(a)

Disburscnent for Local Currency Costs

After satisfaction of the Conditions Precedent,

the Grantee may obtain disbursements of funds under the
Grant for Local Currency Costs required f or the Project in
accordance with the terms of this Agreement, by submitting
to A.I.D., with necessary supporting documentation as prescribed in Project Implementation Letters, requests to finance such costs.
(b)

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