Administration and Technical Arrangements

A. Contribution and Amendments

20. The Government will appoint ADBI as administrator of the JFPPT. To meet the Government’s requirement to use the Bank of Japan as the official depository, the grant funds will be received initially in an account controlled by ADB in the Bank of Japan on behalf of ADBI. This receiving account will be invested and managed by ADB pending remittance to the JFPPT account under the administration of ADBI. For ADBI to administer and implement the JFPPT, the Statute of the ADB Institute will be modified to empower ADBI to function as a trust fund administrator, together with certain other technical amendments, as follows:

1. Pursuant to Article XI of the Statute, Article V.3(h) is hereby amended by inserting the words “trust funds,” immediately before the words “voluntary contributions.” As amended, paragraph 3(h) will then read in its entirety:

“(h) after consultation with the Bank and subject to the provisions of Article VII below, recommend to the Board of Directors through the President of the Bank to accept on behalf of the Institute trust funds, voluntary contributions, donations and grants to the Institute for the purpose of financing the Institute’s activities and developing its facilities;”

2. Article VII is hereby amended by inserting as paragraph 4(a) a new paragraph, which reads in its entirety:

“Notwithstanding the provisions of paragraphs 3 and 4(b) of this Article, the Institute may accept, with the approval of the Board of Directors of the Bank, the administration of trust funds which are consistent with the functions set out in Article III or advance the objectives of the Institute. Such trust funds accepted by the Institute may be used in any manner and on any terms and conditions not inconsistent with the purposes and policies of the Institute or the Bank and with the agreement relating to such trust funds between the Institute and their respective contributors of such trust funds concerned.”

The existing paragraph 4 is redesignated subparagraph (b).

3. Article VIII is hereby amended by inserting the word “principal” immediately before the word “office” and adding the following phrase at the end “and may establish, with the approval of the President of the Bank, such facilities, agencies and branches elsewhere as may be necessary”, so that it then reads:

“The Institute shall establish its principal office in Tokyo, Japan and may establish, with the approval of the President of the Bank, such facilities, agencies and branches elsewhere as may be necessary.”

21. The proposed contribution of ¥905,362,000 will be made available upon signing of the arrangement establishing the JFPPT and the amendment of the Statute contemplated herein. The arrangement is in the appendix.

22. At its discretion and, subject to the Japanese Diet’s approval, the Government may provide additional resources to the JFPPT. Interest earned on such amounts will be used for the JFPPT. These funds will not form part of ADBI’s own resources and will be kept separate from it. Other donor governments or qualified and approved entities may, with the approval of the Board of Directors, contribute to the JFPPT.

B. Administration and Execution Costs

23. The JFPPT will be administered solely by ADBI. For administering and executing the JFPPT, ADBI may use part of the JFPPT funds (together with any interest earned thereon) to cover the direct and identifiable costs³ incurred in the administration and execution of the JFPPT, including those of the program unit and monitoring, evaluation, and audit fees.

C. Records and Accounts

24. ADBI will maintain records and accounts in accordance with applicable ADBI procedures, as may be amended from time to time, to show expenditures financed by the JFPPT. ADBI will arrange to provide the Government with periodic reports on the use of the JFPPT and the activities financed by the JFPPT. Such reports will be made available to ADB’s Management and Board, and will be audited annually by independent auditors.

D. Termination and Residual Funds

25. In terms of performance and fulfillment of its purpose, the JFPPT will be reviewed 3 years after the first public policy training program has commenced. When the arrangements of the JFPPT terminate, the use of any residual funds, including investment income of such funds, will be determined in consultation among the Government, ADB, and ADBI.