Niger - Second Maradi Rural Development Project : Credit 1026 - Credit Agreement - Conformed

CREDIT NUMBER 1026 NIR Development Credit Agreement (Second Maradi Rural Development Project) between REPUBLIC OF NIGER and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1980 1 CREDIT NUMBER 1026 NIR DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated 6 , 1980, between REPUBLIC OF NIGER (hereinaf er called the Borrower) and INTER- NATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Asso- ciation). 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 has applied to the International Fund for Agricultural Development (hereinafter called the Fund) for a loan (hereinafter called the Fund Loan) in an amount equivalent to nine million seven hundred thousand Special Drawing Rights (SDR 9,700,000) to assist in financing the Project on the terms and conditions set forth in an agreement (hereinafter called the Fund Loan Agreement) to be entered into between the Borrower and the Fund; (C) the Fund has appointed the Association as Cooperating Institution to administer the Fund Loan in accordance with the provisions of this Agreement, and the Association has accepted such appointment; (D) the Borrower has applied to the Caisse Centrale de Cooperation Economique (hereinafter called CCCE) for a loan (hereinafter called the CCCE Loan) in an aggregate principal amount of 7,000,000 dollars equivalent to assist in financing the Project on the terms and conditions set forth in an agreement (hereinafter called the CCCE Loan Agreement) to be entered into between the Borrower and CCCE; and WHEREAS the Association has agreed, on the basis inter alia of the foregoing, to extend the Credit to the Borrower 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 -2- 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 General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Fund Loan Account" means the loan account established under the Fund Loan Agreement; (b) "Special Drawing Right" and "SDR" mean a special drawing right allocated by the International Monetary Fund, as valued from time to time by the International Monetary Fund; (c) "PMU" means the Project Management Unit established under the Development Credit Agreement (Maradi Rural Development Project), dated February 6, 1976, between Republic of Niger and the Association; (d) "Central Technical Monitoring and Evaluation Unit" means the unit established by the Borrower for purposes of coordinating the monitoring of agricultural projects in Niger; (e) "Project Area" means the D6partement de Maradi; (f) "ONAHA" means Office Nationale des Am6nagements Hydro- Agricoles of the Borrower; and (g) "CFAF" means "Franc de la Communante Financiere Africaine", the currency unit of the Borrower. 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 equi- valent to sixteen million seven hundred thousand dollars ($16,700,000). -3- Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Article III of this Agreement. Section 2.03. The Closing Date shall be December 31, 1985 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.04. 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 2.05. Service charges shall be payable semiannually on January 15 and July 15 in each year. Section 2.06. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each January 15 and July 15 commencing July 15, 1990, and ending January 15, 2030, each installment to and including the install- ment payable on January 15, 2000, to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment there- after to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.07. The currency of the Republic of France is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Allocation and Withdrawal of Proceeds of Credit and Fund Loan Section 3.01. Subject to the rights of suspension and can- cellation set forth in the Development Credit Agreement and the Fund Loan Agreement, the amount of the Credit and the amount of the Fund Loan may be withdrawn from the Credit Account and the Fund Loan Account, respectively, in accordance with the provisions of this Agreement and with the allocation of the proceeds of the Credit and the Fund Loan set forth in Schedule 1 to this Agree- ment, as such allocation may be modified from time to time pursuant to the provisions of such Schedule or by further agree- ment between the Borrower, the Association and the Fund. Section 3.02. The Borrower shall be entitled to make with- drawals from the Credit Account and from the Fund Loan Account for expenditures made (or, if the Association and the Fund 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 and the Fund Loan. Section 3.03. (a) When the Borrower shall desire to withdraw any amount of the Credit or the Fund Loan, the Borrower shall deliver to the Association a written application in such form and containing such statements and agreements as the Association or the Fund shall reasonably request. Applications for withdrawal, with the necessary documentation as hereinafter provided shall, except as the Borrower, Association and the Fund shall other- wise agree, be made prouptly in relation to expenditures for the Project. (b) The Borrower shall furnish to the Association such documents and other evidence in support of the application as the Association or the Fund shall reasonably request, whether before or after the Association shall have approved any withdrawal requested in the application. (c) Each application and the accompanying documents and other evidence must be sufficient in form and substance to satisfy the Association or the Fund that the Borrower is entitled to withdraw from the Credit Account or the Fund Loan Account the amount applied for and that such amount is to be used only for the purposes of the Project. Section 3.04. Each such application by the Borrower for withdrawal shall be deemed to be a request to withdraw funds from the Credit Account and from the Fund Loan Account and the funds to be withdrawn pursuant to such application shall be apportioned by the Association between the Credit and the Fund Loan as indicated in the table in paragraph 1 of Schedule 1 to this Agreement, or as shall be otherwise agreed between the Association and the Fund. Section 3.05. When the Association shall have approved an application by the Borrower for withdrawal, the Association shall: (i) pay the amount, if any, which the Borrower is entitled to withdraw from the Credit Account - 5 - to or on the order of the Borrower in accordance with the provisions of the Development Credit Agreement; and (ii) promptly notify the Fund that it has received an application for withdrawal from the Fund Loan Account in the aggregate amount specified in such notice, that it has approved payment of the portion, if any, to be withdrawn from the Credit Account in the amount set forth in such notice, and that the portion to be withdrawn from the Fund Loan Account in the amount set forth in such notice is eligible for payment by the Fund. Section 3.06. If at any time the amount of the Credit or the Fund Loan shall have been fully withdrawn or cancelled, applications by the Borrower for further withdrawals shall be deemed to be requested for withdrawal of the full amount applied for from the Credit Account or the Fund Loan Account only, and the provisions of this Article III except for Section 3.04 hereof shall continue to apply mutatis mutandis until the full amount credited or to be credited to such Account shall have been withdrawn or cancelled. Section 3.07. Upon the Borrower's request and upon such terms as shall be agreed between the Borrower and the Association, the Association may, on behalf and for the account of the Fund, enter into special commitments to pay amounts, out of'the proceeds of the Fund Loan, to third parties in respect of the cost of goods required by the Project, subject to the provisions of this Agree- ment concerning the allocation and apportionment of the proceeds of the Fund Loan. The Fund has advised the Association that any such special commitment shall, once it has been notified to the Fund, constitute an obligation on the part of the Fund to pay, notwithstanding any subsequent suspension or cancellation of the Fund Loan, the amount to be disbursed out of the proceeds of the Fund Loan in fulfillment of such special commitment. Section 3.08. Except as the Association and the Fund shall otherwise agree, procurement of the goods and civil works required for the Project and to be financed out of the proceeds of the Credit or the Fund Loan shall be governed by the provisions of Schedule 3 to this Agreement. - 6 - ARTICLE IV Execution of the Project Section 4.01. (a) The Borrower shall carry out the Project with due diligence and efficiency and in conformity with appro- priate agricultural, engineering, administrative and financial practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Pursuant to paragraph (a) of this Section, the Borrower shall establish and maintain: (i) in the National Agricultural Credit Bank (CNCA) a Fund for Farmer's Supplies (Maradi) with an opening line of credit of CFAF200 million and shall replenish such Fund by deposits therein of: (A) a further line of credit of CFAF220 million prior to September 30, 1981; (B) the amount required as subsidies on agricultural inputs for the current season, prior to September 30 of each year begin- ning in 1982; (C) the proceeds from cash purchases of inputs and implements, down payments on pur- chases made on medium-term credits and repayments and charges on medium-term loans, beginning on September 30, 1980; and (D) amounts equal to any shortfalls due to defaults on such loans and to increases in the prices of non-incremental inputs; and (ii) a Special Project Account (Maradi) in the Develop- ment Bank of the Republic of Niger at Niamey with an initial deposit of CFAF150 million for the purpose of financing expenditures required for the Project, such Account to be replenisied each quarter by the Borrower on the basis of a budget made by the Director of the Project, in order to have at all times sufficient funds to meet the financing requirements of the Project. Section 4.02. In order to assist the Borrower in carrying out Part B of the Project and the research program included in Part F of the Project, and PMU and the Central Technical Monitor- ing and Evaluation Unit of the Borrower to carry out their func- tions, the Borrower shall employ consultants and experts whose - 7 - qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Section 4.03. For purposes of carrying out the Project, the Borrower shall: (a) (i) maintain PMU with such functions, responsibilities and organization as are set for.th in Schedule 4 to this Agreement; and (ii) provide PMU with such' funds, facilities, services and other resources as required for the purpose. (b) The qualifications, experience, and terms and conditions of employment of persons assigned to the positions listed below shall be satisfactory to the Association: PMU: General Manager, Advisor to the General Manager, Director of the Administrative, Commercial and Financial Department, Technical Director, Agriculture Division Chief, Advisor to the Agriculture Division Chief, Cooperative Support Division Chief, Irrigation and Civil Works Division Chief, Works and Equipment Section Chief and Training Division Chief. Monitoring and Evaluation Unit under Part J of the Project: Chief of the Unit. (c) The Borrower shall: (i) ensure that all local staff employed by PMU is retained for such periods of time as shall be required for purposes of the Project; and (ii) appoint the General Manager of PMU as the representative of ONAHA in the Project Area. Section 4.04. The Borrower shall not later than December 31, 1980, appoint an assistant responsible for agricultural extension to each of the administrative district chiefs in the Project Area. Section 4.05. (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 or the Fund Loan 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. - 8 - (b) Except as the Association shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Credit or the Fund Loan to be used exclusively for the Project. Section 4.06. (a) The Borrower shall furnish to the Associa- tion and the Fund, promptly upon their preparation, the plans, specifications, reports, contract documents and work and procure- ment 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 and procedures adequate to record and monitor the progress of the Project (including its cost and, where appropriate, the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Credit or the Fund Loan, and to disclose their use in the Project; (ii) shall enable the Association's and the Fund'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 or the Fund Loan and any relevant records and documents; and (iii) shall furnish to the Association at regular intervals all such information 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 Fund Loan 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 and the Fund a report, of such scope and in such detail as the Association shall reasonably request, on the execu- tion and initial operation of the Project, its cost and the benefits derived and to be derived from it, the Derformance by the Borrower and the Association of their respective obligations under the Development Credit Agreement and the accomplishment of the purposes of the Credit and the Fund Loan. Section 4.07. The Borrower shall take or cause to be taken all such action as shall be necessary to acquire as and when needed all such land and rights in respect of land as shall be required for carrying out the Project and shall furnish to the Association, promptly after such acquisition, evidence satis- -9- factory to the Association that such land and rights in respect of land are available for purposes related to the Project. Section 4.08. The Borrower shall exchange views with the Association prior to allocating more than 0.38 hectares of land irrigated under Part B of the Project to any one family unit. Section 4.09. (a) The Borrower shall allocate land irrigated under Part B of the Project only to farmers which undertake to cultivate it in accordance with appropriate practices, including double cropping, and to pay the fee referred to in Section 5.03 of this Agreement. (b) The Borrower shall deprive any farmer who fails to fulfill the undertaking referred to in paragraph (a) above from his or her rights in respect of land irrigated under the Projecc. ARTICLE V Other Covenants Section 5.01. The Borrower shall: (a) cause PMU to maintain or cause to be maintained separate accounts adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations, resources and expenditures in respect of the Project, including separate accounts reflecting all expenditures on account of which withdrawals are requested from the Credit Account on the basis of certificates of expenditures; (b) retain, until one year after the Closing Date, all records (orders, invoices, bills, receipts and other documents) evidencing the expenditures on account of which withdrawals are requested from the Credit Account on the basis of certificates of expenditures and shall enable the Association's accredited repre- sentatives to examine such records. Section 5.02. The Borrower shall: (i) have the accounts referred to in Sections 4.01 and 5.01 of this Agreement for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors accept- able to the Association; (ii) furnish to the Association and the Fund as soon as available, but in any case not later than four months after the end of each such year, (A) certified copies of - 10 - such accounts 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, including, without limitation to the foregoing, a separate opinion by said auditors in respect of the expenditures and records referred to in Section 5.01 (b) 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 services performed, and that such goods, works and services were eligible for financing under this Agreement and were used in the carrying out of the Prcject; and (iii) furnish to the Association such other information concerning such accounts and the audit thereof as the Association shall from time to time reasonably request. Section 5.03. (a) In furtherance of the Borrower's policy to recover from beneficiaries the recurrent costs of operation and maintenance and the capital costs of the irrigation works to be carried out under the Project to the fullest extent possible and desirable, taking into account the need to provide incentives for farmers to participate in the Project, to encourage efficient use of water, and to use any surpluses for similar projects or for other bigh-priority purposes, to relate the level of the fee levied on beneficiaries to their ability to pay and relative income levels, the Borrower shall ensure that ONAHA charge and collect from farmers or farmer groups which cultivate land irri- gated under the Project a per-hectare fee for the use of water. Such fee shall be set not later than October 31, 1980, at a level satisfactory to the Association and the Fund. (b) Thereafter, the Borrower shall exchange views with the Association from time to time on the level of such water charges, taking into account the criteria set forth in paragraph (a) of the Section as well as changing price levels, and to the extent that the conclusions of said review shall so indicate, shall revise the level of such water charges appropriately. (c) The Borrower shall maintain separate accounting for the costs recovered from water users through such water charges, and shall furnish to the Bank annual reports thereon. (d) The Borrower shall provide such amounts, in addition to those recovered from the water users in accordance with the provisions of this Section, as shall be required to operate - 11 - and maintain, in accordance with appropriate agricultural and engineering practices, the irrigation facilities included in the Project. Section 5.04. The Borrower shall: (a) set producer prices for agricultural products at a level sufficient to induce farmers to produce for the market; (b) review those prices annually; and (c) announce such prices each year at such time as shall be appropriate. ARTICLE VI Remedies of the Association Section 6.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of PMU or for the suspension of its operations; and (b) (i) subject to subparagraph (ii) of this paragraph: (A) the right of the Borrower to withdraw the proceeds of any loan (including the Fund Loan and the CCCE Loan) made to the Borrower for the financing of the Project shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agree- ment providing therefor; or (B) any such loan shall have become due and payable prior to the agreed maturity thereof; (ii) subparagraph (i) of this paragraph shall not apply if: (A) 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 - 12 - (B) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consistent with the obligations of the Borrower under this Agreement. Section 6.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified pursuant to paragraph (d) thereof, namely, that any event speci- fied in paragraph (a) or (b) (i) (B) of Section 6.01 of this Agreement shall occur. ARTICLE VII Effective Date; Termination Section 7.01. 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 Association has been notified by the Fund and the CCCE that all conditions precedent to the effectiveness of the Fund Loan and initial disbursement of the CCCE Loan pursuant to the Fund Loan Agreement and the CCCE Loan Agreement (other than the effectiveness of this Agreement), respectively, have been duly fulfilled; (b) the Borrower has arranged for the lines of credit referred to in Section 4.01 (b) of this Agreement; and (c) the Borrower has approved the "cahier de charges" to be used for purposes of land allocation. Section 7.02. The date qt9 /91? is hereby speci- fied for the purposes of Sect n 12.04 of the General Conditions. Section 7.03. The obligations of the Borrower under Sections 5.03 and 5.04 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date 30 years after the date of this Agreement, whichever shall be the earlier. Section 7.04. If (i) the Fund Loan Agreement shall have come into force and effect and the Development Credit Agreement shall have failed to come into force and effect by the date - 13 - specified in Section 7.02 of this Agreement or a later date established by the Association for the purposes of Section 12.04 of the General Conditions, or (ii) the entire principal amount of the Credit withdrawn from the Credit Account and all charges which shall have accrued on the Credit shall have been paid before the Fund Loan Agreement shall have terminated, then, notwithstanding the provisions of Sections 12.04 and 12.05 of the General Condi- tions, the Development Credit Agreement shall be deemed to be, or to remain, in force and effect but only to the extent required for the purpose of implementing the Fund Loan Agreement and of orderly settlement of matters of mutual interest to the parties there- under, subject to such modifications of the Development Credit Agreement as shall be agreed between the Borrower, the Association and the Fund for such purposes. Section 7.05. If (i) the Fund Loan Agreement shall terminate in accordance with its terms before the Development Credit Agree- ment shall have terminated, or (ii) the Association shall notify the Borrower that its appointment as Cooperating Institution under the Fund Loan Agreement has terminated, the provisions of this Agreement shall, to the extent that they relate to the Fund Loan, forthwith terminate. ARTICLE VIII Representatives of the Borrower; Addresses Section 8.01. The Minister of Planning of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 8.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministere du Plan B. P. 862 Niamey Niger Cable address: Telex: MINIPLAN 5230 CND Niamey - 14 - 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 District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF NIGER By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Amjyc Regional Vice President Western Africa - 15 - SCHEDULE 1 Withdrawal of the Proceeds of the Credit and the Fund Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit and the Fund Loan, the allocation of the amounts of the Credit and the Fund Loan to each Category and the percentage of expenditures for items so to be financed in each Category: % of Expenditures Amount of the Amount of the to be Credit Allocated Fund Loan Financed (Expressed Allocated by in Dollar (Expressed in Associ- Category Equivalent) SDR Equivalent) ation Fund (1) Civil works 300,000 180,000 58% 42% under Part H of the Project (2) Irrigation works 1,900,000 1,120,000 40% 30% under Part B of the Project (3) Vehicles and 1,600,000 950,000 40% 27% equipment (4) Agricultural 1,500,000 880,000 22% 15% credit (5) Expatriate experts, con- sulting services for Part B of the Project (a) Adminis- 1,900,000 100% trative, commercial and finan- cial Director, Assistant to said Director, Agronomist, and Mechanic - 16 - % of Expenditures Amount of the Amount of the to be Credit Allocated Fund Loan Financed (Expressed Allocated by in Dollar (Expressed in Associ- Category Equivalent) SDR Equivalent) ation Fund (b) Irrigation engineer and Chief of Civil Works 1,150,000 (6) Audit, surveys 600,000 350,000 36% 28% (7) Local staff of 6,200,000 3,650,000 35% 26% PMU and other Project opera- ting costs (8) Goods and ser- 700,000 420,000 58% 42% vices for Central Technical Monitor- ing and Evalu- ation Unit (9) Unallocated 2,000,000 1,000,000 TOTAL 16,700,000 9,700,000 2. The disbursement percentages have been calculated in com- pliance with the policies of the Association and the Fund that no proceeds of the Credit or the Fund Loan 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, manufac- ture, 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 or the Fund Loan 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 policies of the Association and the Fund. - 17 - 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expen- ditures prior to the date of this Agreement or the date of the Fund Loan Agreement, whichever shall be the later. 4. Notwithstanding the allocation of an amount of the Credit or the Fund Loan or the disbursement percentages set forth in the table in paragraph I above, and without limitation upon the provisions of Section 3.04 of this Agreement, if the Association has reasonably estimated that the amount of the Credit or the Fund Loan 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) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit or the Fund Loan which are then allocated to another Category and which in the opinion of the Association are not needed to meet other expenditures, provided, however, that no such reallocation of proceeds of the Fund Loan shall be made from Category 5 (b) to Category 5 (a); and (ii) if such reallocation cannot fully meet the estimated short- fall, reduce the disbursement percentage then applicable to such expenditures 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 Fund Loan 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 or of the Fund under the Fund Loan Agreement, by notice to the Borrower, cancel such amount of the Credit and/or the Fund Loan 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 and/or the Fund Loan. - 18 - SCHEDULE 2 Description of the Project The purpose of the Project is to improve farming practices in the Project Area and increase agricultural production. The Project consists of the following Parts: Part A: Improvement of farming practices related to the culti- vation of cereals, cowpeas and groundnuts. Part B: Irrigation development of about 740 hectares in the Goulbi de Maradi. Part C: A program of credit to farmers in the Project Area to finance farm equipment and inputs on the following terms and conditions: Annual Item Terms of Loan Interest 1. Farm Equipment 4 years 9.5% 2. Groundnut seeds 1 year 25.0% 3. Other inputs 1 year 9.5% Part D: Training of extension agents and provision of extension services to farmers in the Project Area. Part E: Extension of the existing "functional literacy program" of the Borrower to about 130 additional training centers in the Project Area. Part F: A seed multiplication program and a program of applied agricultural research on experimental fields. Part G: A health program including training of first-aid volun- teers and midwives. Part H: Construction and equipping of an irrigation center, a training center and a new "centre de promotion rurale", and extension of about 20 "centres de promotion rurale". - 19 - Part I: Establishment of a monitoring and evaluation unit to monitor the progress of the preceding parts of the Project and to evaluate the economic and social benefits derived from them. The Project is expected to be completed by June 30, 1985. - 20 - SCHEDULE 3 Procurement A. International Competitive Bidding 1. Except as provided in Part D hereof, goods and civil works shall be procured under contracts awarded in accordance with procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in March 1977 (hereinafter called the Guidelines), on the basis of international competitive bidding as described in Part A of the Guidelines. 2. For goods and works to be procured on the basis of inter- national competitive bidding, in addition to the requirements of paragraph 1.2 of the Guidelines, the Borrower shall prepare and forward to the Association as soon as possible, and in any event not later than 60 days prior to the date of availability to the public of the first tender or prequalification documents relating thereto, as the case may be, a general procurement notice, in such form and detail and containing such information as the Association shall reasonably request; the Association will arrange for the publication of such notice in order to provide timely notification to prospective bidders of the opportunity to bid for the goods and works in question. The Borrower shall provide the necessary information to update such notice annually so long as any goods or works remain to be procured on the basis of international compe- titive bidding. 3. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of international competitive bidding: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for the imported goods, or the ex-factory price or off-the-shelf price of other goods, offered in such bid; and (ii) customs duties and other import taxes levied in connection with the importation, or the sales and similar taxes levied in connection with the sale or ,delivery, pursuant to the bid, of the goods shall not be taken into account in t.he evaluation of the bids. B. Preference for Domestic Manufacturers In the p;.ocurement of goods in accordance with the procedures described in Part A of this Schedule, goods manufactured in - 21 - Niger may be granted a margin of preference in accordance with, and subject to, the following provisions: 1. All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the information required to establish the eligibility of a bid for such preference and the following methods and stages that will be followed in the evaluation and comparison of bids. 2. After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in Niger 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 Niger equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other domestic bids. (3) Group C: bids offering any other goods. 3. In order to determine the lowest evaluated bid of each group, all evaluated bids in each group shall first be compared among themselves, without taking into account customs duties and other import taxes levied in connection with the importation, and sales and similar taxes levied in connection with the sale or delivery, pursuant to the bids, of the goods. Such lowest eval- uated bids shall then be compared with each other, and if, as a result of this comparison, a bid from group A or group B is the lowest, it shall be selected for the award. 4. If, as a result of the comparison under paragraph 3 above, the lowest bid is a bid from group C, all group C bids shall be further compared with the lowest evaluated bid from group A after adding to the evaluated bid price of the imported goods offered in each group C bid, for the purpose of this further comparison only, an amount equal to: (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in such group C bid; or (ii) 15% of the c.i.f. bid price of such goods if said customs duties and taxes exceed 15% of such price. If the group A bid in such further comparison is the lowest, it shall be selected for the award; if not, the bid from group - 22 - C which as a result of the comparison under paragraph 3 is the lowest evaluated bid shall be selected. C. Preference fnr Domestic Contractors With respect to the evaluation of bids for any contract for civil works included under Categories (1) and (2) of the table set forth in Schedule 1 to the Development Credit Agreement and to be procured in accordance with the procedures described in Part A of this Schedule, the Borrower may grant a margin of preference of 7-1/2% to domestic contractors, in accordance with, and subject to, the following provisions: 1. Contractors applying for such preference shall be asked to provide, as part of the data for qualification, such informa- tion, including details of ownership, as shall be required to determine whether, according to the classification established by the Borrower and accepted by the Association, a particular firm or group of firms qualifies for a domestic preference. The bidding documents shall clearly indicate the preference and the method that will be followed in the evaluation and comparison of bids to give effect to such preference. 2. After bids have been received and reviewed by the Borrower, responsive bids will be classified into the following groups: (i) bids offered by domestic contractors eligible for preference; and (ii) bids offered by other contractors. For the purpose of evaluation and comparison of bids an amount equal to 7-1/2% of the bid amount shall be added to bids received under group (ii) above. D. Other Procurement Procedures 1. Wells may be drilled and pumps may be acquired under existing contracts let under the Special Action Credit Agreement, dated March 21, 1980, between the Borrower and the Association as Administrator of the Special Action Account established with funds contributed by the Member States of the European Economic Commu- nity, provided, however, that the Borrower has established to the satisfaction of the Association that such goods and services will be provided at a reasonable price. - 23 - 2. Contracts for goods, other than pumps, estimated to cost less than $100,000 equivalent and $30,000 equivalent or more and contracts for civil works other than the irrigation works referred to in paragraphs 1 and 2 of this Part may be procured through competitive bidding on the basis of local procurement procedures in effect on the date of this Agreement. 3. Contracts for goods estimated to cost less than $30,000 equivalent may be procured through negotiated purchase after solicitation of quotations from at least three suppliers. 4. Irrigation works, other than drillinag of wells, may be carried out on force account, provided, however, that the cost of the works to be so carried out does not exceed in the aggregate the equivalent of $3,400,000. E. Review of Procurement Decisions by the Association 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for goods estimated to cost the equivalent of $100,000 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 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 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 sufficient time for its review, a detailed report on the evalua- tion and comparison of the bids received and such other informa- tion as the Association shall reasonably request. The Association shall, if it determines that the intended award would be incon- sistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. - 24 - (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 submission to the Association of the first application for withdrawal of funds from the Credit Account or the Fund Loan Account in respect of such contract. 2. With respect to each contract 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 or the Fund Loan Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective 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. - 25 - SCHEDULE 4 Functions, Responsibilities and Organization of PMU 1. PMU shall have such functions and responsibilities as shall be necessary for the proper execution and supervision of the Project, including: (a) planning and programming of the Project execution schedule and the monitoring thereof to ensure that works are on schedule and in compliance with established performance standards; (b) coordination with all ministries, authorities, and agencies of the Borrower in respect of the execution of all aspects of the Project and liaison with the Association; and (c) ensuring that funds are available in the Special Project Account referred to in Section 4.01 (b) (ii) of the Development Credit Agreement as required to meet payments for expenditures incurred in connection with the Project. 2. PMU shall have two Departments, whose heads shall report to the Project Manager: (a) Administrative and Financial Department, responsible for project accounting, staff administration, financial arrangements for agricultural credit and for crop marketing, and project evaluation. (b) Technical Department, responsible for planning and implementing either directly or indirectly all physical aspects of the Project. The Technical Department shall comprise four divisions: Agriculture, Cooperative Support, Irrigation and Civil Works, and Training. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the -day of 198 . FOR SECRETARY