Senegal - Second Agricultural Credit Project : Credit 0404 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 404 SE Development Credit Agreement (Second Agricultural Credit Project) BETWEEN REPUBLIC OF SENEGAL AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JUNE 25, 1973 CONFORMED COPY CREDIT NUMBER 404 SE Development Credit Agreement (Second Agricultural Credit Project) BETWEEN REPUBLIC OF SENEGAL AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JUNE 25, 1973 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated June 25, 1973, between the REPUBLIC OF SENEGAL (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated January 31, 1969, with the same force and effect as if they were fully set forth herein, subject, however, to the deletion of Sections 5.01 and 6.02(h) thereof and to the renumbering of Section 6.02(i) into 6.02(h) thereof (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "BNDS" means the Banque Nationale de Developpement du Sgnigal established under Law No. 64-33 of the Borrower dated May 26, 1964. (b) "ONCAD" means the Office National de Coopration et d'Assistance pour le Developpement established under Law No. 66-60 of the Borrower, dated June 30, 1966, as amended by Law No. 67 46 of the Borrower, dated October 12, 1967. (c) "SODEVA" means the Socitd de Developpenent et de Vulgarisation Agricole, a societe' anonyme established and operating under the laws of the Borrower. (d) "IRAT" means the Institut de Recherches Agronomiques Tropicales et des Cultures Vivri6res, an instrumentality of the Government of the Republic of France working in Senegal under a long-term contract with the Borrower. (e) "Sub-loan" means a loan under Part A(i) of the Project made or purposed to be made by BNDS to a farmer. 4 (f) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and BNDS pursuant to Section 3.01(b) of this Agreement. ARTICLE H The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equivalent to eight million two hundred thousand dollars ($8,200,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule shall be amended from time to time, 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 under the Development Credit Agreement; provided, however, that, except as the Association shall otherwise agree, no withdrawal shall be made on account of expenditures in the territories of any country which is not a member of the Bank (other than Switzerland) or for goods produced in, or services supplied from, such territories. Section 2.03. Except as the Association shall otherwise agree, the goods and services (other than services of consultants) required for the Project and to be financed out of the proceeds of the Credit, shall be procured on the basis of international competition under procedures consistent with the Guidelines for Procurement under World Bank Loans and IDA Credits, published by the Bank in April 1972, as revised in October 1972, and in accordance with, and subject to, the provisions set forth in Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be June 30, 1977 or such other date as shall be agreed between the Borrower and the Association. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Service charges shall be payable semi-annually on January 1 and July 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each January 1 and July 1 commencing 5 July 1, 1983, and ending January 1, 2023, each installment to and including the installment payable on January 1, 1993 to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.08. The currency of the Republic of France 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 shall carry out the Project with due diligence and efficiency and in conformity with appropriate administrative, agricultural, engineering and financial practices, and shall provide, or cause to be provided, and shall cause BNDS to provide in respect of Part A of the Project, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) The Borrower shall relend to BNDS the proceeds of the Credit allocated to finance Part A of the Project, and shall cause BNDS to carry out Part A of *s the Project and to provide, promptly as needed, the funds, facilities, services and other resources required to carry out Part A of the Project, the whole under a subsidiary loan agreement to be entered into between the Borrower and BNDS under terms and conditions acceptable to the Association, which shall include repayment in 20 years, including 4 years of grace for principal repayments, and interest on outstanding amounts at the rediscount rate charged by Banque Centrale des Etats de l'Afrique de I'Ouest at the time the Subsidiary Loan Agreement is executed. (c) The Borrower shall exercise its rights unde> the Subsidiary Loan Agreement in such manner as to protect the interests of the Borrower and the Association and to accomplish the purposes of the Credit, and except as the Association shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. (d) The Borrower shall take and shall cause all its agencies to take all action which shall be necessary on their part to enable BNDS to perform all of its obligations under the Subsidiary Loan Agreement and shall not take or permit to be taken any action which might interfere with such performance. Section 3.02. The Borrower shall cause BNDS to establish and maintain a separate Project Account to be used exclusively for Part A of the Project and to record therein all its receipts and payments for or in connection therewith, 6 including: (i) amounts received from and payments made to the Borrower under the Subsidiary Loan Agreement; (ii) amounts disbursed and received under sub-loans; and (iii) amounts disbursed and received under loans under Part A(ii) of the Project. Section 3.03. The Borrower shall cause BNDS to make loans under Part A of the Project in amounts equ,.l to the entire cost of the goods to be financed, with a repayment period of five years, and carrying interest on outstanding amounts at a rate of 2 percentage points higher than the rate of interest provided for in the Subsidiary Loan Agreement. Section 3.04. In order to assist the Borrower in carrying out Parts D and E of the Project, the Borrower shall employ or cause to be employed consultants with qualifications and experience acceptable to the Association upon terms and conditions satisfactory to the Association. Section 3.05. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) Except as the Association shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the Project. Section 3.06. (a) The Borrower shall furnish to the Association, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) The Borrower: (i) shall maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Credit, and to disclose the use thereof in the Project; (ii) shall enable the Association's accredited representatives to examine the Project, the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish to the Association all such information as the Association shall reasonably request concerning the Project, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. 7 Section 3.07. The Borrower shall cause SODEVA to employ four agronomists with qualifications satisfactory to the Association, within three months after the date of this Agreement, for a period of two years, to assist SODEVA in carrying out Parts E(ii) and E(iii) of the Project. Section 3.08. The Borrower shall cause SODEVA to submit to the Association, within six months after the date of this Agreement or such other period of time as the Association shall agree, detailed proposals on methods and procedures to collect and analyze information on the performance of farmers who have received sub-loans under Part A(i) or loans under Part A(ii) of the Project. Section 3.09. The Borrower shall cause ONCAD to enter, each year, into groundnut transport contracts only with private trucking firms of good standing and which are well managed. Section 3.10. Except as the Association shall otherwise agree, the Borrower shall within twelve months after the date of this Agreement, take all action necessary to ensure that the suppliers of fertilizer and implements undertake the delivery of such goods to the cooperatives. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consistently maintained appropriate 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 cause BNDS and ONCAD to: (i) have their respective accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with sound auditing principles consistently applied, by independent auditors acceptable to the Association, (ii) furnish to the Association as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of their financial statements for such year as so audited and (B) 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 such other information concerning such accounts and financial statements and the audit thereof as the Association shall from time to time reasonably request. 8 Section 4.02. Until the findings of the study on the use of fertilizers referred to in Part E(ii) of Schedule 2 to this Agreement are known, the Borrower shall direct its extension services to adapt fertilizer dosages and formulae in the area north of the Tivaouane-Touba line in the Groundnut Basin to the ecological conditions of that area. Section 4.03. The Borrower shall consult each year with the Association on the level of subsidies on groundnut and millet fertilizer granted by the Borrower, with a view to its progressive reduction. ARTICLE V Consultation, Information and Inspection Section 5.01. The Borrower and the Association shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, the Borrower and the Association shall from time to time, at the request of either party: (a) exchange views through their representatives with regard to the performance of their respective obligations under the Development Credit Agreement, the administration, operations and financial condition of BNDS, and the administration, operations, resources and expenditures, in respect of the Project, of the departments or other agencies of the Borrower responsible for carrying out any part of the Project, and other matters relating to the purposes or the Credit; and (b) furnish to the other all such information as it shall reasonably request with regard to the general status of the Credit. On the part of the Borrower, such information shall include information with respect to financial and economic conditions in the territories of the Borrower, including its balance of payments, and the external debt of the Borrower, of any of its political subdivisions and of any agency of the Borrower or of any such political subdivision. Section 5.02. (a) The Borrower shall furnish or cause to be furnished to the Association all such information as the Association shall reasonably request concerning the administration, operations and financial condition of BNDS, and the administration, operations, resources and expenditures, in respect of the Project, of the departments or other agencies of the Borrower responsible for carrying out any part of the Project. (b) The Borrower and the Association shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the 9 accomplishment of the purposes of the Credit, the maintenance of the service thereof or the performance by either of them of its obligations under the Development Credit Agreement. Section 5.03. The Borrower shall afford all reasonable opportunity for accredited representatives of the Association to visit any part of the territories of the Borrower for purposes t?lated to the Credit. ARTICLE VI Taxes and Restrictions Section 6.01. The principal of, and service charges on, the Credit shall be paid without deduction for, and free from, any taxes imposed under the laws of the Borrower or laws in effect in its territories. Section 6.02. The Development Credit Agreement shall be free from any taxes on or in connection with the execution, delivery or registration thereof, * imposed under the laws of the Borrower or laws in effect in its territories. Section 6.03. The payment of the principal of, and service charges on, the Credit shall be free from all restrictions, regulations, controls and moratoria of any nature imposed under the laws of the Borrower or laws in effect in its territories. ARTICLE VII Remedies of the Association Section 7.01. If any event specified in Section 7.01 of the General Conditions or in Section 7.03 of this Agreement shall occur and shall continue for the period, if any, therein set forth, then at any subsequent time during the continuance thereof, the Association, at its option, may by notice to the Borrower declare the principal of the Credit then outstanding to be due and payable immediately together with the service charges thereon, and upon any such declaration such principal and service charges shall become due and payable immediately, anything to the contrary in the Development Credit Agreement notwithstanding. Section 7.02. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified: 10 (a) The Borrower or any authority having jurisdiction shall have dissolved or disestablished BNDS, ONCAD or SODEVA or have suspended their operations, without the prior approval of the Association. (b) The legislation governing BNDS, ONCAD or SODEVA shall have been amended, suspended, terminated or repealed so as to affect adversely the performance by the Borrower of its obligations under this Agreement. Section 7.03. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified, namely, any of the events specified in Section 7.02 of this Agreement shall occur. ARTICLE VIII Effective Date; Termination Section 8.01. The following event is specified as an additional condition to the effectiveness of the Development Credit Agreement within the meaning of Section 10.01(b) of the General Conditions, namely, that the Subsidiary Loan Agreement has been executed and delivered. Section 8.02. The following is specified as an additional matter, within the meaning of Section 10.02(b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association, namely, that the Subsidiary Loan Agreement has been duly authorized or ratified by and executed and delivered on behalf of and constitutes a valid and binding obligation of the parties thereto in accordance with its terms. Section 8.03. The date October 30, 1973 is hereby specified for the purposes of Section 10.04 of the General Conditions. Section 8.04. The obligations of the Borrower under Sections 3.06(b), 3.10, 4.01, 4.02 and 4.03 of this Agreement and the provisions of Sections 7.02 and 7.03 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date 15 years after the date of this Agreement, whichever shall be the earlier. ARTICLE IX Representative of the Borrower; Addresses Section 9.01. The Minister of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 9.03 of the General Conditions. 11 Section 9.02. The following addresses are specified for the purposes of Section 9.01 of the General Conditions: For the Borrower: Ministere des Finances Rue Charles Lafn6 Bofte Postale 4017 Dakar, S6ndgal Cable address: MINIFINANCES Dakar For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names and to be delivered in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF SENEGAL By /s/ A. Coulbary Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ X. de la Renaudiere Director Country Programs Department Western Africa Regional Office 12 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 amounts of the Credit to each Category and the percentage of eligible expenditures so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed I. Sub-loans under 6,300,000 75% of amounts Part A(i) of the disbursed under Project the sub-loans II. Equipment and 450,000 87% of total buildings expenditures III. Technical assistance (a) to ONCAD 200,000 100% of foreign expenditures (b) to SODEVA 300,000 100% of total ex- penditures IV. Studies 500,000 100% of total ex- penditures V. Unallocated 450,000 TOTAL 8,200,000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures for goods ploduced in, or services supplied from, the territories, and in the currency, of any country other than the Borrower; provided, however, that if the currency of the Borrower is also that of another country in the territories of which goods are produced or from the territories of which services are supplied, expenditures in such currency for such goods or services shall be deemed to be "foreign expenditures"; and 13 (b) the term "total expenditures" means the aggregate of foreign expenditures and of expenditures for goods produced in, or services supplied from, the territories of the Borrower. 3. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of: (a) expenditures prior to the date of this Agreement; and (b) payments for taxes imposed directly under the laws of the Borrower or laws in effect in its territories on goods or services, or on the importation, manufacture, procurement or supply thereof. To the extent That the amount represented by the percentage set forth in the third column of the table in paragraph 1 above in respect of any Category would exceed the amount payable net of all such taxes, such percentage shall be reduced to ensure that no proceeds of the Credit will be withdrawn on account of payments for such taxes. 4. Notwithstanding the allocation of an amount of the Credit set forth in the second column of the table in paragraph I above: (a) if the estimate of the expenditures under any Category shall decrease, the amount of the Credit then allocated to such Category and no longer required therefor will be reallocated by the Association by increasing correspondingly the unallocated amount of the Credit; (b) if the estimate of the expenditures under any Category shall increase, the percentage set forth in the third column of the table in paragraph I above in respect of such expenditures shall be applied to the amount of such increase, and a corresponding amount will be allocated by the Association, at the request of the Borrower, to such Category from the unallocated amount of the Credit, subject, however, to the requirements for contingencies, as determined by the Association, in respect of any other expenditures; and (c) if the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in Section 2.03 of this Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. 14 5. Notwithstanding the percentages set forth in the third column of the table in paragraph I above, if the estimate of total expenditures under Category II shall increase and no proceeds of the Credit are available for reallocation to such Category, the Association may, by notice to the Borrower, adjust the percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 15 SCHEDULE 2 Description of the Project The Project, which is part of the program of the Borrower to increase its agricultural production, consists of: Part A: Provision of medium-term credit for procuring: (i) animal-drawn implements and carts; and (ii) draft animals. Part B: Procurement of transportation, office and demonstration equipment for SODEVA, and equipment for IRAT to continue rhizobium research. Part C: Construction of buildings and procurement of teaching equipment for SODEVA's training center for extension agents. Part D: Provision of technical assistance to ONCAD and SODEVA. Part E: Carrying out (i) a seed storage study, (ii) a survey on fertilizer response, and (iii) a feasibility study on the extension of the Sine-Saloum production improvement scheme. The Project is expected to be completed by December 31, 1976. 16 SCHEDULE 3 Procurement 1. Identical or similar goods shall be grouped together, whenever practicable, for the purpose of procurement. 2. With respect to any contract for any goods and associated services except those under paragraph 5 of this Schedule, estimated to cost the equivalent of $50,000, or more: (a) Before bids are invited, the Borrower shall furnish to the Association, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedure as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform the Association of the name of the bidder to whom it intends to award the contract and shall furnish to the Association, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, together with the reasons for the intended award. The Association shall, if it determines that the intended award would be inconsistent with the procedures set forth or referred to in Section 2.03 of this Agreement, promptly inform the Borrower and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked. (d) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the delivery to the Association of the first application for withdrawal of funds from the Credit Account in respect of any such contract. 3. With respect to any other contract for any goods and associated services except those under paragraph 5 of this Schedule, the Borrower shall furnish to the Association, promptly after its execution and prior to the delivery to the Association of the first application for withdrawal of funds from the Credit Account in respect of any such contract, two conformed copies of such contract, together 17 with the analysis of bids, recommendations for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the award of the contract is not consistent with the procedures set forth or referred to in Section 2.03 of this Agreement, promptly inform the Borrower and state the reasons for such determination. 4. (a) For the purpose of evaluation and comparison of bids for goods, customs duties and other import taxes on imported goods, and sales and similar taxes on locally produced goods, shall be excluded, except to the extent hereinafter provided, and bidders shall be required to state in their bid the c.i.f. (port of entry) price for imported goods, or the ex-factory price for locally produced goods. The cost to the Borrower of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be taken into account in the evaluation of bids in accordance with paragraph 4.7 of the Guidelines for Procurement. (b) For purposes of the provisions hereinafter set forth, the following terms shall have the following meanings: (i) Preferred Domestic Bid means a bid offering goods manufactured in Senegal if the bidder shall have established to the satisfaction of the Borrower and the Association that the manufacturing cost of such goods includes a value added in Senegal of not less than 20% of the ex-factory bid price. (ii) Non-preferred Domestic Bid means any other bid offering goods manufactured in Senegal. (iii) Foreign Bid means any bid other than those specified in (i) or (ii) above. (c) For goods included in Category II of the table set out in paragraph 1 of Schedule I to this Agreement, a margin of preference may be granted by the Borrower to Preferred Domestic Bids. Such preference shall be granted by adding to each Foreign Bid, for the purpose only of comparison with Preferred Domestic Bids, an amount (hereinafter called "Domestic Preference Margin") equal to the smaller of (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the goods offered in the bid, or (ii) 15% of the c.i.f. bid price of such goods. (d) If Preferred Domestic Bids are received, the comparison among all evaluated bids for each contract shall be made in the stages and with the preferences indicated below: 18 Stage Bids to be Compared Preference I. All Preferred Domestic Bids and Non-preferred None Domestic Bids. II. (a) Lowest evaluated bid under Stage I, if Add Domestic Preferred Domestic Bid, with all Foreign Preference Bids; Margin to Foreign Bids or (b) Lowest evaluated bid under Stage I, if None Non-preferred Domestic Bid, with all Foreign Bids. III. If lowest evaluated bid under Stage II is not None the lowest evaluated bid under Stage I, all Foreign Bids. (e) The Bidding documents shall clearly indicate any preference which will be granted to Preferred Domestic Bids, the information required to establish the eligibility of a bid for such preference and the methods and stages that will be followed in the evaluation and comparison of bids to give effect to such preference. 5. Contracts for the supply of implements under Part A of the Project shall be awarded on a negotiated basis and with the prior approval of the Association. Specifications for such implements shall be subject to the approval of the Association. 6. For each annual agricultural program, ONCAD shall, between November and February, collect orders from the farmers and shall furnish them to the manufacturers of farm implements to enable them to plan their production and delivery schedules in due time.