Rwanda - Mutara Agricultural And Livestock Development : Credit 0937 - Project Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 937 RW SPECIAL ACTION CREDIT NUMBER 21 RW Project Agreement (Mutara Agricultural and Livestock Development Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the SPECIAL ACTION ACCOUNT established with funds contributed by the MEMBER STATES of the EUROPEAN ECONOMIC COMMUNITY and OFFICE POUR LA VALORISATION PASTORALE ET AGRICOLE DU MUTARA Dated July 13, 1979 CREDIT NUMBER 937 RW SPECIAL ACTION CREDIT NUMBER 21 RW PROJECT AGREEMENT AGREEMENT, dated July 13, 1979, between INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) and INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the Special Action Account established with funds contributed by the MEMBER STATES of the EUROPEAN ECONOMIC COMMUNITY (hereinafter called the Administrator) and OFFICE POUR LA VALORISATION PASTORALE ET AGRICOLE (hereinafter called OVAPAM). WHEREAS by a development credit agreement of even date herewith (hereinafter cAlled the Development Credit Agreement) between Republic of Rwanda (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower a credit (hereinafter called the Credit) in an amount in various currencies equivalent to eight million, seven hundred and fifty thousand dollars ($8,750,000) on the terms and condi- tions set forth in the Development Credit Agreement, but only on condition that OVAPAM agrees to undertake such obligations toward the Association as are hereinafter set forth; WHEREAS by a special action credit agreement of even date herewith (hereinafter called the Special Action Credit Agreement) between the Borrower and the Administrator, the Administrator has agreed to make to the Borrower a special action credit (herein- after called the Special Action Credit) in an amount Li various currencies equivalent to about one million six hundred and fifty thousand dollprs ($1,650,000) on the terms and conditions set forth in the bpecial Action Credit Agreement, but only on condi- tion that OVAPAM agrees to undertake such obligations towards the Administrator as are hereinafter set forth; WHEREAS by a subsidiary agreement (hereinafter called the Subsidiary Agreement) to be entered into between the Borrower and OVAPAM, a portion of the proceeds of the Credit provided for under the Development Credit Agreement and the proceeds of the Special Action Credit will be made available to OVAPAM on the terms and conditions therein set forth; and WHEREAS OVAPAM, in consideration of the Association's enter- ing into the Development Credit Agreement with the Borrower and the Administr.-tor's entering into the Special Action Credit Agreement with the Borrower, has agreed to undertake the obliga- tions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: - 2 - -2- ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Preamble to this Agreement, in the Development Credit Agree- ment and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of Parts A, B and C of the Project Section 2.01. OVAPAM shall carry out the Project described in Schedule 2 to the Development Credit Agreement and in Schedule 2 to the Special Action Credit Agreement with due diligence and efficiency and in conformity with appropriate agricultural, livestock, administrative, financial and training practices. Section 2.02. In order to assist OVAPAM in carrying out the Project, OVAPAM shall cause the seven experts referred to in Section 3.07 (a) of the Development Credit Agreement and in Section 3.06 (a) of the Special Action Credit Agreement to be employed by it in accordance with the provisions of such Sections. Section 2.03. (a) Except as the Associatior may otherwise agree, procurement of the.goods and civil works to 't financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to the Development Credit Agreement. (b) Except as the Administrator may otherwise agree, pro- curement of the civil works and related materials to be financed out of the proceeds of the Special Action Credit shall be governed by the provisions of Schedule 3 to the Special Action Credit Agreement. Section 2.04. (a) OVAPAM undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit and the Special Action Credit made available to it by the Borrower 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 OVAPAM to replace or repair such goods. -3- (b) Except as the Association and the Administrator may otherwise agree, OVAPAM shall cause all goods, works and services financed out of the proceeds of the Credit and the Special Action Credit made available to it by the Borrower to be used exclusively for the Project. Section 2.05. (a) OVAPAM shall furnish to the Association and the Administrator, promptly upon their preparation, the plans, specifications, reports, contract documents and work and procure- ment schedules for Parts A, B and C of the Project, and any material modifications thereof or additions thereto, in such detail as the Association and the Administrator shall reasonably request. (b) OVAPAM shall: (i) maintain records and procedures adequate to record and monitor the progress of Parts A, B and C of the Project (including their cost and, where appropriate, the benefits to be derived therefrom), to identify the goods, works and services financed out of the proceeds of the Credit and the Special Action Credit, and to disclose their use in such Parts of the Project; (ii) enable the Association's and the Adminis- trator'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 the Special Action Credit and any relevant records and documents; and (iii) furnish to the Association and the Administrator at six-month intervals, within one month of each six-month period, all such information as the Association and the Administrator shall reason- ably request concerning Parts A, B and C of the Project, their cost and, where appropriate, the benefits to be derived therefrom, the expenditure of such proceeds of the Credit and the Special Action Credit and the goods, works and services financed out of such proceeds. (c) OVAPAM shall enable the Association's and the Adminis- trator's accredited representatives to examine all plants, instal- lations, sites, works, buildings, property and equipment of OVAPAM and any relevant records and documents. Section 2.06. OVAPAM shall duly perform all its obligations under the Subsidiary Agreement. Except as the Association and the Administrator may otherwise agree, OVAPAM shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the Subsidiary Agreement or any provision thereof. -4- Section 2.07. (a) OVAPAM shall, at the request of the Association or the Administrator, exchange views with the Associa- tion or the Administrator with regard to the progress of the rroject, the performance of its obligations under this Agree- ment and under the Subsidiary Agreement, and other matters relating to the purposes of the Credit and the Special Action Credit. (b) OVAPAM shall promptly inform the Association and the Administrator of any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Credit or the Special Action Credit, or the performance by OVAPAM of its obligations under this Agreement and under the Subsidiary Agreement. Section 2.08. Except as the Association and the Administrator may otherwise agree: (a) Parts A, B and C of the Project shall be carried out pursuant to work plans acceptable to the Association and the Administrator and formulated in accordance with the following provisions: (i) the first work plan shall cover the period ending December 31, 1979; (ii) not later than each November 1 thereafter, OVAPAM shall deliver to the Association and the Admin- istrator for their acceptance a proposed work plan covering the year commencing the following January 1; and (iii) each work plan shall contain the items described in Part A of the Schedule to this Agreement, shall be accompanied by information described in Part B of such Schedule, and shall be evaluated on the basis of the criteria set forth in Part C of such Schedule. (b) Each proposed work plan delivered to the Association and the Administrator shall be signed by the Director of OVAPAM who shall, by so signing, certify that such proposed work plan has been considered and approved by OVAPAM's Board of Directors. W MEOWg P--5- (c) The Association and the Administrator shall promptly inform OVAPAM of their acceptance of, or comments on, each proposed work plan delivered to the Association and the Admin- istrator and, if the Association and the Administrator shall not concur with such work plan as proposed, the Association and the Administrator shall promptly exchange views thereon with OVAPAM. (d) Work plans may be amended at any time by agreement between the Association, the Administrator and OVAPAM. (e) No work plan under Part B of the Project shall be acceptable to the Association and the Administrator until evidence satisfactory to the Association and the Administrator shall have been delivered to them that: (i) not less than 3,000 ha of marshland in the Project Area to the north of the Cyenjojo and Kabare hills have been made available for livestock grazing for not less than five consecutive years; and (ii) the improvement of not less than 1,500 ha of pastures and the elimination of about 500 head of livestock within the Group Ranch zones of the Project Area have been completed. Section 2.09. OVAPAM shall make no purchases of crops or livestock from Beneficiaries under Parts A and B of the Project unless all of the following conditions are met: (i) the purchase assists in disposing of unsold crops under Part A or Part B of the Project or in disposing of excess livestock under Part B of the Project; (ii) the total cost to OVAPAM of the purchase shall be recovered by it from sales of such crops or live- stock; and (iii) a relevant sales contract has been executed by OVAPAM and a buyer of such crops or live- stock. -6- Section 2.10. OVAPAM shall: (i) ensure that the total demand for non-irrigation water arising as a result of the Marshland Develop- ment Project shall be met by the water supply system to be constructed pursuant to Part C (2) of the Project; (ii) levy a charge against, and collect such charge from, each user of such system's water as is required in order to ensure that such system's maintenance and depreciation costs are fully covered in each year; and (iii) ensure that, notwithstanding the generality of part (ii) of this Section, during the first year of such system's operation a charge of not less than five RwF per cubic meter of water supplied is levied against and collected from each such user* Section 2.11. (a) OVAPAM shall charge and collect from each Beneficiary an appropriate fee for any veterinary service or product provided under the Project to any livestock of such Beneficiary or his family. (b) OVAPAM shall ensure that the supply of veterinary materials, drugs and medicines required for purposes of paragraph (a) of this Section is sufficient at all times and, for this purpose, shall maintain a revolving fund for their purchase into which revenue from the sales of such items and any addi- tional advances of funds required of the Borrower to cover any deficit, including foreign exchange, shall be deposited as necessary. Section 2.12. OVAPAM shall: (i) ensure that the construction of the schools and. health centers included in Part C (4) of the Project shall be in accordance with standards not less than those established by the Borrower's Ministries of Education and Health as of the date hereof; and -7- (ii) make arrangements, satisfactory to the Associa- tion and the Administrator, to obtain from the Borrower for such schools and health centers: (A) qualified staff in such numbers as shall be necessary for their efficient operation; and (B) the funds necessary for their efficient operation and maintenance and for the salaries of all staff thereof. ARTICLE III Management and Operations of OVAPAM Section 3.01. OVAPAM shall at all times manage its affairs, maintain its financial position, plan its future expansion and conduct its operations and undertaking, all in accordance with sound financial and agricultural practices, and under the supervi- sion of experienced and competent management assisted by adequate and competent staff. Section 3.02. OVAPAM shall: (a) at all times operate and maintain all property owned or operated by it and promptly make all necessary repairs and renewals thereof, all in accordance with sound agricultural and engineering practices; and (b) not sell, lease, transfer or otherwise dispose of any of the property or assets owned or operated by it which are necessary or useful for the efficient conduct of its operations and under- taking. Section 3.03. OVAPAM's Board of Directors shall: (i) meet at the request of its Chairman, at least once during each quarter; (ii) review,and approve proposed and final work plans and Project investment and operating budgets; (iii) monitor and review Project progress; (iv) s-upervise the Beneficiaries Committee; (v) coor- dinate the Project with the Marshland Development Project and any other project that affects the Project Area; and (vi) ensure liaison between OVAPAM and the local authorities. Section 3.04. OVAPAM shall take out and maintain with respon- sible insurers, or make other provisions satisfactory to the -8- Association and the Administrator for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 3.05. OVAPAM shall take and cause to be taken all necessary measures within its powers as shall be required to enable the Borrower to comply with all of its obligations pursuant to the Development Credit Agreement and the Special Action Credit Agreement relating in any way to OVAPAM and its management and operations. ARTICLE IV Financial Covenants Section 4.01. OVAPAM shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition, including those with respect to Parts A, B and C of the Project. Section 4.02. OVAPAM shall: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) including those with respect to Parts A, B and C of the Project for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association and the Administrator; (ii) furnish to the Association and the Administrator as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of its 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 and the Administrator shall have reasonably requested; and (iii) furnish to the Association or the Administrator such other information concerning the accounts and financial statements of OVAPAM and the audit thereof as the Association or the Administrator shall from time to time reason- ably request. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. -9- Section 5.02. (a) This Agreement and all obligations of the Association, the Administrator and of OVAPAM thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement or the Special Action Credit Agreement shall terminate in accordance with its terms, whichever shall be the later; or (ii) a date twenty-five years after the date of this Agreement. (b) If the Development Credit Agreement or the Special Action Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association or the Administrator, as the case may be, shall promptly notify OVAPAM of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the Development Credit Agreement or the Special Action Credit Agreement. ARTICLE VI Miscellaneous Provisions Section 6.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or at such other address as such party shall have des- ignated by notice to the party giving such notice or making such request. The addresses so specified are: For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America - 10 - Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For the Administrator: Administrator of the Special Action Account (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) For OVAPAM: OVAPAM B.P. 178 Kigali Rwanda Cable addreso: Telex: OVAPAM CABPUB 04 Kigali Section 6.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of OVAPAM may be taken or executed by the Director of OVAPAM or such other person or persons as such Director shall designate in writing, and OVAPAM shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 6.03. This Agreement may be executed in several coun- terparts, each of which shall be an original, and all collectively but one instrument. - 11- 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. INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ André R. Gué Acting Regional Vice President Eastern Africa INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the SPECIAL ACTION ACCOUNT established with funds contributed by the MEMBER STATES of the EUROPEAN ECONOMIC COMMUNITY By /s/ André R. Gué Acting Regional Vice President Eastern Africa OFFICE POUR LA VALORISATION PASTORALE ET AGRICOLE DU MUTARA By /s/ Bonaventure Ubalijoro Authorized Representative - 12 - SCHEDULE Work Plans A. Each work plan shall provide documentation, satisfactory to the Association and the Administrator, with respect to the following: (i) a detailed description of the work to be performed, including the objectives of the work plan for the subsequent year, the schedules of activities, equipment requirements, staffing arrangements and .training plans, and the allocation of responsibi- lities for each item included in the work plan; (ii) a budget for the period covered in respect of each of Parts A, B or C of the Project setting forth: (a) the proposed capital expenditures; (b) all proposed recurrent expenditures on salaries and indemnities, materials, fuel, repairs and maintenance directly attributable to activities under such Parts of the Project, together with a breakdown of pre-development and incremental expenditures; (c) a comparison of the proposed investment and recur- rent budgets with the proposed budget and actual expenditures for the previous year; (d) a list of all staff employed or to be employed on a full-time basis by OVAPAM with respect to such Parts of the Project; and (e) a list of proposed expenditures for technical services, studies and training; (iii) a financing plan, and detailed quarterly cash flow projections including the Borrower's contributions to the Revolving Fund pursuant to Section 3.06 of the Development Credit Agreement and Section 3.05 of the Special Action Credit Agreement, and disbursements under Categories (1) through (6) (a) of the table set forth in paragraph I of Schedule 1 to the Development Credit Agreement and under Category (1) of the table set forth in paragraph 1 of Schedule 1 to the Special Action Credit Agreement; - 13 - (iv) any proposed studies to be carried out pursuant to Part D (2) (b) of the Project, including a brief description thereof; (v) the proposed procurement program and procedures to be applied thereto; and (vi) a detailed Project implementation schedule for the year in question. B. Each work plan shall be supported by the following infor- mation, as may be relevant: (i) a detailed assessment of the previous year's achieve- ments; (ii) a detailed staffing analysis, including a report on previous staffing and proposed increments or reductions; (iii) the proposed detailed extension and training program; (iv) the proposed detailed adaptive research program; (v) the proposed detailed pasture improvement, steer fat- tening and breeding program for the technical support center under Part B (2) of the Project; (vi) the proposed detailed marketing program under Part C (1) of the Project; and (vii) the proposed detailed credit program under Part C (3) (c) of the Project,.including: (a) the items to be financed (seeds, livestock, etc.); and (b) the description of potential borrowers. C. The criteria upon which the Association's and the Adminis- trator's approval of a proposed work plan shall be based are as follows: 1. General criteria: (a) the adequacy of such plan to develop basic infra- structure, e.g. access and feeder roads, extension infrastructure, demonstration farms, nurseries, and veterinary installations; and - 14 - (b) the availability of sufficient trained extension staff. 2. Criteria regarding crops: (a) the adequacy of the proposed extension program; (b) the possible implementation of results from adaptive research; and (c) the availability of inputs. 3. Criteria regarding livestock: (a) under Part A of the Project: (i) the technical suitability of promoting stall feeding for livestock; (ii) the availability of on-farm fodder; and (iii) the availability of basic animal health and production services. (b) under Part B of the Project: (i) the assurance of no increase in livestock in the relevant part of the Project Area; and (ii) the distribution of livestock according to carrying capacity. 4. Criterion regarding marketing: The completion of the preliminary marketing study under Part C (1) of the Project. 5. Criteria regarding training: (a) the suitability of the proposed training program for extension staff and Beneficiaries; and (b) the availability of training staff.