Somali - Drought Rehabilitation Program : Credit 0623 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 623 SO DEVELOPMENT CREDIT AGREEMENT (Drought Rehabilitation Program) between SOMALI DEMOCRATIC REPUBLIC and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated July 7, 1976 0 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated July 7, 1976, between the SOMALI DEMOCRATIC REPUBLIC (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). 0 -2- ARTICLE I General Conditions; Definitions Section 1.01.. The parties to this Agreement accept all the pro- visions of the General Conditions Applicable to Development Credit Agreements of the Association, dated March 15, 1974, with the same force and effit.ct as if they were fully set forth herein (said Gene- ral Conditions Applicable to Development Credit Agreements of the Association being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the con- text otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respec- tive meanings therein set forth. ARTICLE II 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 dollars ($8,000,000). 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 (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Association, 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 shall open a Drought Rehabilitation Account with the Somali Central Bank. All amounts withdrawn from the Credit Account (except those which are paid by the Association directly to suppliers), and the funds to be provided by the Borrower for goods and services required for the Project, shall be deposited in the said Account. Amounts deposited in the Drought Rehabilita- tion Account shall be withdrawn solely for meeting the reasonable cost of goods and services required for the Project. (c) Promptly after the Effective Date of the Credit, the Borrower shall make an initial deposit in the Drought Rehabilita- tion Account of an amount equivalent to $100,000 for the purpose 0 4I of meeting the reasonable cost of goods and services required for the Project. Section 2.03. Except as the Association shall otherwise agree, the goods, works and services (other than consultants' services) for the Project to be financed out of the proceeds of the Credit, shall be procured in accordance with the provisions of Schedule 3 to this Agreement. Section 2.,04. The Closing Date shall be June 30, 1980 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.05. The Borrower shall pay to the Association a ser- vice 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 June 1 and December 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each June 1 and December 1 commencing June 1, 1986, and ending December 1, 2025, each installment to and including the installment payable on December 1, 1995 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 United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. 0 -6- 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 and agricultural practices, and shall provide, promptly as needed, the funds, facilities, services and other re- sources required for the purpose. (b) In order to assist the Borrower in carrying out the Project, the Borrower shall establish and maintain a Settlement Development Agency under the supervision of the National Rehabili- tation Committee. (c) The Borrower shall appoint in the Settlement Development Agency a Financial Controller whose qualifications and experience shall be satisfactory to the Association. Section 3.02. (a) In order to assist the Borrower in planning and implementing crop development programs and training, the Bor- rower shall, within four months from the date of this Agreement, or such other date as the Association may agree, select consul- tants and appoint a procurement advisor whose qualifications, ex- perience and terms and conditions of employment shall be satisfac- tory to the Association. (b) For the purpose of monitoring and evaluation of the Project and for the preparation of future projects in the Juba- Shebelli inter-riverine area, the Borrower shall appoint technical, -17 economic and financial experts whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Section 3.03. (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 re- place or repair such goods. (b) Except as the Association shall otherwise agree, the Bor- rower shall cause all goods and services financed out of the pro- ceeds of the Credit to be used exclusively for the Project. Upon completion of the Project, the Borrower and the Association shall consult with each other on the utilization of machinery and equip- ment financed out of the proceeds of the Credit. Section 3.04. (a) The Borrower shall furnish to the Associa- tion, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement sched- ules 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 re- cord the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of -8- the Credit, and to disclose the use thereof in the Project; (ii) shall enable the Association's accredited representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and docupents; ad (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. -9 ARTICLE TV Other Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consis- tently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Project, of the de- partments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall cause the Settlement Development Ag:ncy to: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) related to the Project for each fiscal year audited, in accordance with sound auditing principles consistently applied, by the Magistrate of Accounts of the Borrower; (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 financial state- ments 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 Associa- tion such other information concerning the accounts and financial statements related to the Project of the Settlement Development Agency and the audit thereof as the Association shall from time to time reasonably request. ....1..)... -10- 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 Drought Rehabilitation Account referred to in Sec- tion 2.02 (b) of this Agreement has been opened with the Somali Central Bank; and (b) The Settlement Development Agency referred to in Sec- tion 3.01 (b) of this Agreement has been established. Section 5.02. The date September 7, 1976, is hereby specified for the purposes of Section 12.04 of the General Conditions. * -11 - ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Secretary of State for Finance of the Bor- rower is designated as representative of the Borrower for the pur- poses 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: The Secretary of State for Finance Government of Somali Democratic Republic Mogadiscio Somali Democratic Republic Cable address: MINFIN Mogadiscio 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. -12- IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agree- ment to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. SOMALI DEMOCRATIC REPUBLIC By /s/ Abdullahi Ahmed Addou Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Is/ Stanley Please Acting Regional Vice President Eastern Africa ........ - 13 - SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be fi- nanced out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of ex- penditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Machinery, equip- ment and materials: (a) directly im- 4,l00,000 100% of foreign ported expenditures (b) imported equip- 360,000 70% ment procured locally (2) Operating costs 1,460,oo0 65% (excluding local salaries) (3) Consulting services 6o0,ooo 100% of foreign expenditures (4) Unallocated 1,480,000 TOTAL 8,ooo,ooo 2. For the purposes of this Schedule, the term "foreign expendi- tures" means expenditures in the currency of any country other than the Borrower and for goods and services supplied from the territory of any country other than the Borrower. 3. The disbursement percentages have been calculated in compli- ance with the policy of the Association that no proceeds of the Credit shall be disbursed on account of Dayments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in re- spect of any item to be financed out of the proceeds of the Credit decreases or increases, the Association may, by notice to the Bor- rower, increase or decrease the disbursement percentage then ap- plicable to such item as required to be consistent with the afore- mentioned policy of the Association. 4. Notwithstanding the provisions of paragraph 1 above, no with- drawals shall be made in respect of expenditures prior to the date of this Agreement. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph 1 above, if the Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Cate- gory, the Association may, by notice to the Borrower: (i) reallo- cate to such Category, to the extent required to meet the estimated -15- shortfall, proceeds of the Credit which are then allocated to an- other Category and which in the opinion of the Association are not needed to meet other expenditures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that fur- ther withdrawals under such Category may continue until all expend- itures thereunder shall have been made. 6. 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 this Agreement, no expend- itures 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, can- cel 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. 16 SCHEDULE 2 Description of the Project The Project consists of the following: Part A: (i) Development and start-up of rainfed cultivation on about 9,000 hectares (ha) of land at Dujuma Settlement on the Juba river and about 3,000 ha each at Sablale and Kurtun-Warey Settlements on the Shebelli river; and (ii) Strengthening the organization and management of Dujuma, Sablale and Kurtun-Warey Settlements. Part B: Utilization of technical services for: (i) Part A of the Project; (ii) Project monitoring and evaluation; and (iii) future projects preparation in the Juba-Shebelli inter-riverine area. The Project is expected to be completed by December 31, 1979. - 17 - SCHEDULE 3 Procurement A. International Capetitive Bidding 1. Except as provided in Parts B and C hereof, goods, works and services shall be procured under contracts to be awarded in accord- ance with procedures consistent with those set forth in Part A of the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in August 1975 (hereinafter called the Guidelines), on the basis of international competitive bidding. 2. Identical or similar items of vehicles, equipment and materi- als shall, to the extent possible, be consolidated in a single in- vitation for the purposes of bidding by each participant. B. Other' Procurement Procedures Supplies and services to be financed under Category (1) (b) of the table set forth in paragraph 1 of Schedule 1 to this Agree- ment may be procured from existing commercial channels. C. Procurement Without Contracting Works for development of fields may be executed by the Bor- rover by force account. - 18 - D. Review of Procurement Decisions by the Association 1. With respect to all contracts for machinery, equipment and materials 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 procedures as the Association shall reasonably re- quest. Any further modification to the bidding documents shall re- quire the Association's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, the Bor- rower shall, before a final decision on the award is made, inform the Association of the name of the bidder to which it intends to award the contract and shall furnish to the Association, in suf- ficient time for its review, a detailed report, by the consultants referred to in Section 3.02 (a) of this Agreement, on the evalua- tion and comparison of the bids received, together with the recom- mendations for award of the said consultants and such other infor- mation as the Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsis- tent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. (c) The terms and conditions of the contract shall not, with- out the Association's concurrence, materially differ from those on which bids were asked or prequalification invited. -19- (d) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the submission to the Association of the first application for with- drawal of funds from the Credit Account in respect of such con- tract. 2. With respect to each contract to be financed out of the pro- ceeds of the Credit and not governed by the preceding paragraph, the Borrower shall furnish to the Association, promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract, together 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 con- tract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such deter- mination.