Upper Volta - Second Education Project : Credit 0956 - Credit Agreement - Conformed

OF iCmi CREDIT NUMBER 956 UV DOCUMENTS Development Credit Agreement (Second Education Project) between REPUBLIC OP UPPER VOLTA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated / . 1979 CREDIT NUMBER 956 UV DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated Irv rv<c-,4 - /') 1979, between the REPUBLIC OF UPPER VOLTA (hereinafter called the Borrower) and the INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) the Borrower has requested the Association to assist in the financing of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) the Borrower intends to contract from the African Development Fund a loan in an amount of 6,700,000 Units of Account to assist in financing part of the Project on the terms and conditions set forth in an agreement to be entered into between the Borrower and the African Development Fund; (C) by letter addressed by the Association to the Minister of Finance of the Borrower on May 5, 1978, the Association granted an advance to the Borrower totalling $245,000 for the preparation of the Project; (D) pursuant to the terms of said advance the aggregate amount thereof is to be refunded to the Association out of the proceeds of the Credit provided for in this Agreement; and WHEREAS the Association has agreed, on the basis inter alia of the foregoing, to extend the Credit to the Borrover upon the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: 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 March 15, 1974, with the same force and effect as if they were fully set forth herein (said General 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 context otherwise requires, the several terms defined in the 'A -2- General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Directorate" means the Directorate for Rural Youth Training of the Borrower's Ministry of Rural Development; (b) "ORD" means an Organisme Rdgional de Dfveloppement, a Regional Development Agency of the Borrower established pur- suant to Law No. 20/65/AN of July 28, 1965; and (c) "Special Account" means the account referred to in Section 2.02 (c) of this Agreement. 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 equiva- lent to fourteen million dollars ($14,000,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of this Section and 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 and to be financed out of the proceeds of the Credit. (b) 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 advance referred to in paragraph (C) of the Preamble to this Agreement withdrawn and outstanding as of such date and to pay any unpaid charges thereon. Any unwithdrawn balance of the authorized amount of such advance shall automatically be cancelled on the same date. (c) The Borrower shall, for the purposes of the Project, cause the Directorate to open a Special Account in a commercial bank on terms and conditions satisfactory to the Association. Disbursements from the Special Account shall be made exclusively -3- to finance the costs of goods and services required to carry out the Project and to be financed out of the proceeds of the Credit. (d) The Association shall, promptly after the Effective Date, withdraw on behalf of the Borrower from the Credit Account and deposit in the Special Account an initial amount in the currency of the Borrower not exceeding $600,000 equivalent and shall thereafter, at the request of the Borrower, further withdraw from the Credit Account and deposit in the Special Account such amounts as shall be required to reimburse the Borrower for payments made out of the Special Account for expenditures for the Project eligible for financing under the Development Credit Agreement, but only to the extent that the amount of any such deposit, together with any amount already on deposit in the Special Account as of the date of such request, shall not exceed in the aggregate the equivalent of $600,000. (e) The Borrower shall furnish to the Association in respect of each payment out of the Special Account such documents and other evidence as the Association shall reasonably request, showing that the payment was made on account of the reasonable cost of goods or services required for the Project and to be financed out of the proceeds of the Credit. (f) If the Association shall have determined that any payment out of the Special Account: (i) was made for any expendi- ture not eligible for financing by withdrawal from the Credit Account; or (ii) was not justified by the evidence furnished pursuant to paragraph (e) of this Section, the Borrower shall, promptly upon notice from the Association and prior to any further deposit in the Special Account by the Association, deposit in the Special Account an amount equal to the amount of such payment. (g) Notwithstanding the provision of paragraph (d) of this Section, no further deposit in the Special Account shall be made when the Association shall have determined that all further withdrawals can be made under paragraph (a) of this Section or when the total amount withdrawn from the Credit Account shall have reached the equivalent of $13,400,000, whichever shall be sooner. Withdrawal of the remaining amount of the Credit shall follow procedures agreed between the Borrower and the Association. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works to be financed out -4- of the proceeds of the Credit, shall be governed by the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be June 30, 1984 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 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 semiannually on April 15 and October 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each April 15 and October 15 commencing April 15, 1990, and ending October 15, 2029, each installment to and including the installment payable on October 15, 1999, 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 French Republic is hereby specified for the purposes of Section 4.02 of the General Condi- tions. ARTICLE III Execution of the Project Section 3.01. The Borrower shall carry out the Project through the Directorate with due diligence and efficiency and in conformity with appropriate administrative, financial, technical and training practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. In order to assist the Borrower in carrying out the Project, the Borrower shall employ such technical assistants, consultants and other experts, whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association, as shall be agreed between the Borrower and the Association. -5- 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 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 3.04. (a) The Borrower shall furnish to the Associa- tion, promptly upon their preparation; (i) site surveys, the plans, specifications, reports, contract documents and work and procurement schedules for the Project, and any material modifi- cations thereof or additions thereto, in such detail as the Association shall reasonably request; and (ii) proposed semiannual budgets for the Project prepared.by the Directorate. (b) The Borrower: (i) shall maintain records and procedures adequate to record and monitor the progress of the Project (including its cost and the benefits to be derived from it), to. identify the goods and services financed out of the proceeds of the Credit, and to disclose their use 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 documents; and (iii) shall furnish to the Association quarterly progress reports and all such other informa- tion as the Association shall reasonably request concerning the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. (c) Promptly after completion of the Project, but in any event not later than six months after the Closing Date or such later date as may be agreed for this purpose between the Borrower and the Association, the Borrower shall prepare and furnish to the Association a report, of such scope and in such detail as the Association shall reasonably request, on the execution and initial operation of the Project, its cost and the benefits derived and to be derived from it, the performance by the Borrower and the Association of their respective obligations under the Development Credit Agreement and the accomplishment of the purposes of the Credit. -6- Section 3.05. The study comprising Part C of the Project shall be carried out under terms of reference satisfactory to the Borrower and the Association and the Borrower shall furnish to the Association by July 1, 1981 the results thereof, shall exchange views with the Association thereon and shall thereafter take such measures, and in accordance with such schedule of implementation, as the Borrower and the Association shall agree are appropriate in the light of such study. Section 3.06. Not later than June 30, 1980, the Borrower shall: (a) complete a list of its Rural Youth Training Centers and Rural Youth Groups describing the physical facilities and giving . enrollment figures for each; and (b) make arrangements satisfactory to the Association for the keeping of adequate personnel records by the Directorate. Section 3.07. The Borrower shall promptly appoint qualified counterparts to work with the technical assistants employed in the Rural Pedagogical Service. Section 3.08. In carrying out the program of training of personnel of the Department of Public Works, the Borrower shall ensure: (a) that special budgetary provision be made to finance the costs of the training center and of a workshop for vehicles and equipment for public works; (b) that personnel be released from their regular assignments to undergo training according to a schedule satisfactory to the Association; (c) that such personnel receive adequate salary and allowances during such training; and (d) that successful completion of a training program be recognized by appropriate job reclassification and adjustment of pay. Section 3.09. In carrying out Part A of the Project, the Borrower shall furnish to the Association for its approval by April 1 in each year and prior to the beginning of work, a detailed preliminary evaluation, a construction schedule, a cost estimate, and recommendations for an appropriate maintenance schedule, for the Rural Youth Training Centers to be renovated or constructed during the following twelve-month period as well as the site surveys, architectural drawings and specifications and cost estimates for four representative centers. to be recon- structed. Section 3.10. In connection with the training outside of Upper Volta included in the Project, the Borrower shall furnish to the Association prior to July 31, 1981 a list of appropriately qualified candidates and their proposed programs of training. -7- Section 3.11. The evaluation included in Part D.6 of the Project will focus on: (a) the literacy, numeracy and practical learning achievements of the graduates of the Rural Youth Training Centers; (b) the practical and commercial achievements of Rural Youth Group members; and (c) implementation, use and maintenance of the physical facilities to be provided under the Project, and shall be made pursuant to a work program agreed to between the Borrower and the Association. The Borrower shall furnish annually to the Association summaries of such evaluation covering the foregoing points (a), (b) and (c). 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 Directorate and of any other department or agency of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall ensure that: (i) all operations and accounts with respect to the Project be kept separate from the other operations and accounts of the Directorate; and (ii) that the Directorate retain, until two years after the Closing Date, all records (orders, invoices, bills, receipts and other documents) evidencing the expenditures for the Project on account of which withdrawals are .,quested from the Credit Account on the basis of certificates of expenditures and enable the Asso- ciation's accredited representatives to examine such records. Section 4.02. The Borrower shall cause the Directorate to: (a) have the accounts of the Directorate referred to in Section 4.01 of this Agreement audited for each fiscal year in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (b) furnish to the Association as soon as available, but in any case not later than four 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 -8- requested, including, without limitation to the foregoing, separate opinions by said auditors: (i) on the separate accounts referred to in Section 4.01 (b) of this Agreement; (ii) on the Special Account; and (iii) in respect of the expenditures and records referred to in Section 4.01 (b) (ii) of this Agreement, as to whether the proceeds of the Credit withdrawn from the Credit Account on the basis of certificates of expenditure have been used to make payments for goods received, or works or ser- vices performed, and that such goods, works and services were eligible for financing under this Agreement and were used in the carrying out of the Project; and (c) furnish to the Association such other information concerning the accounts and financial statements of the Direc- torate and the audit thereof as the Association shall from time to time reasonably request. Section 4.03. The Borrower shall cause the Directorate to take out and maintain with responsible insurers, or to make other provision satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 4.04. The Borrower shall give priority to qualified candidates who have been trained at the Rural Training Centers in ensuring the basic staffing of the ORD's, shall establish each year by ministerial order a quota for entrance in the Agri- cultural Training Centers by candidates so trained and shall modify the eligibility requirements for such entrance in order to permit such candidates to apply on an equal footing with candidates trained in the formal educational system. ARTICLE V Remedies of the Association Section 5.01. (a) For the purposes of Section 6.02 of the General Conditions, the following additional event is specified pursuant to paragraph (h) thereof, namely, that subject to para- graph (b) of this Section: (i) the right of the Borrower to withdraw the proceeds of any grant or loan made to the Borrower for the financing of the Project shall have been suspended, cancelled or terminated in whole or in part, -9- pursuant to the terms of the agreement providing therefor, or (ii) any such loan shall have become due and payable prior to the agreed maturity thereof. (b) Paragraph (a) of this Section shall not apply if: (i) such suspension, cancellation, termination or prematuring is not caused by the failure of the Borrower to perform any of -its obligations under such agreement; and (ii) adequate funds for the Project are availtble to the Borrower from other sources on terms and conditions -consistent with the obligations of the Borrower under this Agreement. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified pursuant to paragraph (d) thereof, namely, the event specified in Section 5.01 (a) (ii) shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as addi- tional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the Special Account has been opened; (b) the Association has been informed by the African Devel- opment Fund that all conditions precedent to the effectiveness of its loan for the Project, except for the effectiveness of this Agreement, have been fulfilled; and (c) the counterpart to the coordinator of the construction section of the Directorate has been recruited. Section 6.02. The date February 15, 1980 is hereby speci- fied for the purposes of Section 12.04 of the General Conditions. Section 6.03. The obligations of the Borrower under Article IV of this Agreement and the provisions of Section 5.01 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date ten I -10- years after the date of this Agreement, whichever shall be the earlier. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister of the Borrower responsible for finance is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministire des Finances Ouagadougou Upper Volta Cable address: Telex: MINIFINANCE MIFICOM Ouagadougou 5256 For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the rwu- - 11 - District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF UPPER VOLTA By Authorized Repr sentative INTERNATIONAL DEVELOPMENT -ASSOCIATION By Regional Vice President Western Africa -12- SCHEDULE I 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 Crediti 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 Dollar Equivalent) to be Financed (1) Civil works 2,000,000 78% (2) Construction 400,000 78% materials (3) Experts services, 3,500,000 100% audits, fellow- ships outside Upper Volta; vehi- cles, Part J of the Project (4) Local staff sal- 3,900,000 81% aries; other oper- ating costs (5) Local training 1,255,000 100% (6) Refund of Advance for 245,000 100% of amount Project preparation outstanding at (Section 2.02 (b)) Effective Date (7) Initial deposit in 600,000 Special Account (Section 2.02 (d)) (8) Agricultural 100,000 86% equipment (9) Unallocated 2,000,000 TOTAL 14,000,000 - 13 - 2. 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 payments 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 respect of any item to be financed out of the proceeds of the Credit decreases or increases, the Association may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Association. 3. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of payments made for: (a) expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of $300,000 may be made in respect of Categories (4), (5) and (8) on account of payments made for such expenditures before that date but after December 1, 1978; (b) under Categories (1), (3), (4) or (5) until arrangements satisfactory to the Association have been made between the Directorate and the National Bureau for Further Education and Functional Literacy, the Rural Development Coordi- nating Committee and the Rural Radio Service defining their respective roles in the carrying out of the Project. 4. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in para- graph 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 Category, the Association may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to another 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 expen- ditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 5. 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 expenditures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way - 14 - r.stricting or limiting any other right, pover or remedy of the Association under the Development Credit Agreement, by notice to the Borrover, cancel such amount of the Credit as, in the Associ- ation's reasonable opinion, represents the amount of such expendi- tures which vould othervise have been eligible for financing out of the proceeds of the Credit. -15- SCHEDULE 2 Description of the Project The Project is designed to expand and improve the basic education and training system provided for rural youth in Upper Volta by strengthening the administrative, technical, planning, training and evaluation capacity of the Directorate for Rural Youth Training and of relevant associated agencies and by increasing the numbers of young people served by the system. The Project will also support the training of agricultural project managers, building construction artisans and foremen, and road- maintenance personnel. The Project comprises the following Parts: A. Consolidating and expanding of rural youth training: 1. Constructing, furnishing and equipping of 80 existing Rural Youth Training Centers to be selected by the Directorate; 2. Procurement of building materials and equipment for 220 Rural Youth Training Centers to be selected by the. Directorate, 60 of which exist; 3. Construction of wells and water supply facilities at Rural Youth Training Centers and for Rural Youth Groups; 4. Making available credits for the purchase of equipment by Rural Youth Groups; B. Constructing, furnishing, procurement of vehicles and equip- ment and staff training for Rural Training Centers (Centres de promotion rurale) at Goundi and Kodougou; C. Carrying out a study on equality of opportunity with a view to establishing linkages between the formal and rural educational systems; D. Strengthening of the Directorate: 1. Constructing, furnishing and equipping an office building; 2. Procurement of vehicles and equipment; 161 - 16 - 3. Establishment of accounting system and auditing of accounts; 4. Training of staff, furnishing, minor construction works and procurement of vehicles and equipment for a newly established documentation service which will prepare brochures and radio programs and establish rural press services; 5. Training of personnel and purchase of vehicles and equipment for a new service to support the Rural Youth Groups and the kural Training Centers. 6. Strengthening of the Rural Pedagogical Service; training of staff, minor construction works and procurement of equipment and vehicles; support for and training of staff in project evaluation; promotion of annual compe- titions between Rural Youth Training Centers and Rural Youth Groups; 7. Strengthening of the Administrative and Financial Services; enlarging staff; procurement of vehicles and equipment; E. Strengthening of regional support services: 1. Establishment of a regional office of the Directorate at Bobo-Dioulasso; construction, including four offices for supervisory personnel; furnishing; procurement of vehicles and equipment; 2. Supporting through procurement of vehicles and equip- ment for, and training of staff of, the ORD's engaged in the training of rural youth; F. Minor construction, furnishing, procurement of vehicles and equipment, for instructor training centers at Kamboinsg and Farako-Ba; initial and in-service training of staff and Rural Youth Group leaders; G. Training by the National Center for the Promotion of Rural Artisans of artisans, foreman and rural youth training instructors in construction; procurement of vehicles, equip- ment and furniture for the purpose; 17 H. Training for agricultural project managers; procurement of instructional materials for the purpose; I. Rehabilitation and equipping of the Public Works Skills Upgrading Center; procurement of vehicles and equipment; construction of a mechanical workshop for automobiles and public works equipment; establishment of a plan for a new school for training public works personnel; J. Strengthening the Ministry of Rural Development in its function of control, supervision and support of the ORD's; procurement of two vehicles for the purpose; and K. Preparation of a further education project. * * * The Project is expected to be completed by December 31, 1983. a K..) . .A - 18 - SCHEDULE 3 Procurement A. 1. Civil works will be carried out under force account or under contracts awarded following competitive bidding advertised locally according to the Borrower's usual procedures. 2. Construction materials will be purchased under contracts awarded following competitive bidding advertised locally according to the Borrower's usual procedures or under comparative shopping procedures as described in paragraph B.3 below. 3. Vehicles for Part J of the Project will be purchased on the basis of quotations solicited locally. B. 1. With respect to all contracts for civil works or for construction materials estimated to cost the equivalent of $100,000 or more and to be procured on the basis of competitive bidding: (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 request. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospec- tive 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 which 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, and such other information as the Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsistent 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, without 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 withdrawal of funds from the Credit Account in respect of such contract. 2. With respect to each contract not governed by the preceding paragraph, the Borrower shall furnish to the Associa- tion, 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 the respec- tive 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 was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. 3. Contracts for the purchase of construction materials expected to cost less than the equivalent of $10,000 shall be let by comparative shopping and negotiations under the Borrower's normal procurement procedures for such negotiations, provided the aggregate amount of such procurement shall not exceed $100,000 unless otherwise agreed between the Borrower and the Association.