Benin - Borgou Province Rural Development Project : Credit 1127 - Credit Agreement - 1 - Conformed

OFOAL CREDIT NUMBER UtBEN DOC UMEKNTS Development Credit Agreement (Borgou Province Rural Development Project) between PEOPLE'S REPUBLIC OF BENIN and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1981 CREDIT NUMBERt-TBEN DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated Gjt_,_aS , 1981, between PEOPLE'S REPUBLIC OF BENIN (her6inafter called the Borrower) and 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 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 eleven million Special Drawing Rights (SDR 11,000,000) to assist in financing the Project on the terms and conditions set forth in an agreement (hereinafter called the Fund Loan Agreement) between the Borrower and the Fund; (C) the Fund intends to appoint the Association as Coopera- ting Institution to administer the Fund Loan and the Association shall have accepted such appointment; (D) in order to assist the Borrower in financing the pre- paration of the Project the Association has granted an advance by an exchange of letters dated October 1, 1980 and October 9, 1980 and intends to grant an additional advance by a further exchange of letters; said advances (hereinafter called the Advances) total an amount equivalent to $600,000 and shall be refunded out of the proceeds of the Credit provided for herein; (E) pursuant to a development credit agreement dated January 14, 1981, the Association has extended a credit (No. 1090 BEN) to the Borrower to assist, inter alia, in the construction of feeder roads identified as essential to the Project; 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: -2- 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 June 30, 1980, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agree- ments 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) "MDRAC" means the Ministere de Dveloppement Rural et de l'Action Coopgrative, the Borrower's Ministry lesponsible for rural development, or any successor thereto; (b) "DRA" means the D6partement de la Recherche Agronomique in the Borrower's Ministry responsible for agricultural research, or any successor thereto; (c) "CARDER Statutes" means the statutes approved by the Borrower's Ordinance No. 75-84 of December 29, 1975, as such statutes may be amended from time to time; "CARDER" means Centre d'Action Regionale pour le Developpement Rural, esta- blished and operating pursuant to the CARDER Statutes; "CARDER- Borgou" means the CARDER responsible for the Borgou province; and "Genie Rural" means the land use services and rural engineer- ing division of CARDER-Borgou; (d) "GRVC" means Groupement Revolutionnaire ' Vcation Coop6rative, a farmers' cooperative existing under the laws of the Borrower; (e) "PMEU" means the Project monitoring and evaluation unit to be established under Section 4.06 (d) (i) of this Agreement; (f) "PCU" means the Project coordinating unit to be established under Section 4.03 (a) (i) of this Agreement. -3- (g) "SONAGRI Statutes" means the statutes approved by Decree No. 75-338 of December 29, 1975, of the Borrower, as such statutes may be amended from time to time; "SONAGRI" means the Soci&te Nationale pour la Production Agricole, established and operating pursuant to the SONAGRI Statutes; (h) "CAA" means the Caisse Autonome d'Amortissement, which forms a part of the Borrower's Ministry responsible for financial affairs, or any successor thereto; (i) "CFA Francs" and the letters "CFAF" mean the Franc de la Communaute Financiere Africaine, the common currency of the Borrower and the other members of the West African Monetary Union; (j) "Fund Loan Account" means the Loan Account established under the Fund Loan Agreement; and (k) "Advance Account" (Project Account) means the account referred in Section 4.02 (b) 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 equivalent to fifteen million seven hundred thousand Special Drawing Rights (SDR 15,700,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Article III hereof. 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. -4- Section 2.05. Service charges shall be payable semi-annually on May 15 and November 15 in each year. Section 2.06. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each May 15 and November 15 commencing May 15, 1991, and ending November 15, 2030, each installment to and including the installment payable on November 15, 2000, 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 2.07. 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 pur- suant to the provisions of such Schedule or by further agreement between the Borrower, the Association and the Fund. Section 3.02. (a) The Borrower shall be entitled to make withdrawals 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. (b) 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 Advances withdrawn and outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Advances shall be automatically cancelled as of the same date. 5 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, the Association and the Fund shall other- wise agree, be made promptly 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, as nearly as practicable in the circumstances, between the Credit and the Fund Loan in the ratio of 58:42, or such other ratio as shall be 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 to or on the order of the Borrower in accordance with the provisions of this 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 -6- 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, applica- tions 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 provi- sions 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 the Borrower or others in respect of the cost of goods required by the Project, subject to the provisions of this Agreement 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, notwithstandirg 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 works to be financed out of the proceeds of the Credit or the Fund Loan and of other fertilizers and insecticides for cotton required for the Project, shall be governed by the provisions of Schedule 3 to this Agreement. ARTICLE IV Execution of the Project Section 4.01. (a) The Borrower shall (i) cause CARDER-Borgou to carry out Parts A, B (ii) and G of the Project and, together with SONAGRI, Part B (i) of the Project, (ii) carry out Part C of the Project through DRA and Parts D and E of the Project through -7- MDRAC, in coordination with CARDER-Borgou, and (iii) cause SONAGRI to carry out Part F and, together with CARDER-Borgou, Part B (i) of the Project, all with due diligence and efficency and in conformity with appropriate agricultural, administrative, financial and engineering practices and the Borrower shall provide, promptly as needed, the funds, facilities, services and other resources required for such purposes. (b) The Borrower shall make available, on a grant basis (i) to CARDER-Borgou the proceeds of the Credit and of the Fund Loan allocated for Parts A, B, C, D, E and G of the Project, and (ii) to SONAGRI the proceeds of the Credit and of the Fund Loan allocated for Part F of the Project. Section 4.02. Pursuant to its obligations under Section 4.01 of this Agreement and without any limitation upon the generality thereof, the Borrower shall: (a) ensure the availability to SONAGRI by October 31 of each year of the funds necessary for the purchase of the production inputs for Part B (i) of the Project; (b) (i) for the purposes of the Project open an Advance Account in the name of CARDER-Borgou at CAA on terms and conditions satisfactory to the Asso- ciation with an initial deposit of 250 million CFAF; and (ii) thereafter, to cover local costs, make deposits in said Account at the beginning of each quarter on the basis of the needs of the Project and support- ing documentation for expenses incurred; the amount of such deposits shall be sufficient to meet Project expenditures for the immediately following quarterly period. Section 4.03. (a) The Borrower shall (i) by September 1, 1981, or such other date as the Borrower and the Association shall agree, establish under the supervision of MDRAC and thereafter maintain in existence, at least until completion of the Project, the PCU and nominate and employ until completion of the Project a full-time Project coordinator, and (ii) nominate (1) a Project manager and (2) a deputy Project manager responsible for finance and administration, who shall be employed by CARDER-Borgou on a permanent, full-time basis. - 8 - (b) The qualifications and experience of the personnel described in paragraph (a) of this Section shall at all times be satisfactory to the Association. Section 4.04. (a) In order to assist the Borrower in carrying out the Project, the Borrower shall employ, or cause to be employed, consultants and specialists whose qualifications, experience and terms and conditions of employment shall be satis- factory to the Association, including, in particular: (i) for CARDER-Borgou, (1) a deputy manager responsible for technical development, (2) a financial controller, (3) a chief accountant, (4) a seeds production specialist, (5) an input supply, credit and marketing specialist and (6) a training specialist; (ii) for SONAGRI, a financial controller and a chief accountant; (iii) for MDRAC, an agroeconomist to supervise the PMEU; and (iv) for DRA, a cotton research specialist for the research station at Cotonou and one foodcrop specialist for the research station at Ina. (b) The Borrower shall assign, or cause to be assigned, experienced and qualified Beninese personnel to work in close cooperation with the consultants and specialists referred to in paragraph (a) of this Section. 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. (b) Except as the Association shall otherwise agree, all goods and services financed out of the proceeds of the Credit or the Fund Loan shall be used exclusively for the Project until its completion. 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. -9- (b) The Borrower: (i) shall maintain or cause to be maintained 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 repre- sentatives to visit the facilities and construction sites in- cluded 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) Without any limitation upon the generality of paragraphs (a) and (b) of this Section, the Borrower shall cause CARDER- Borgou for each Part of the Project, and SONAGRI (for Parts B (i) and F of the Project) to furnish to the Association quarterly progress reports; such quarterly progress reports shall be pre- pared according to a format acceptable to the Association, and include such detailed financial and budgetary information as the Association may reasonably request. (d) Without any limitation upon the generality of paragraph (b) of this Section, the Borrower shall, by September 1, 1981, or such other date as the Borrower and the Association shall agree: (i) establish under the supervision of MDRAC and thereafter maintain in existence at least until completion of the Project the PMEU provided for under Part D of the Project; (ii) shall prepare and furnish to the Association for its review and concurrence a detailed work program for the PMEU, and thereafter, promptly implement such work program, as approved by the Association. (e) Upon the award by the Borrower of any contract for goods, works or services to be financed out of the proceeds of the Credit or the Fund, the Association may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (f) 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 - 10 - 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 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 and the Fund Loan. Section 4.07. The Borrower shall cause CARDER-Borgou: (i) to furnish to the Association its proposed work plan and associated budget for the first year of Project execution for review and concurrence and thereafter promptly implement such work plan and associated budget, as approved by the Association; and (ii) by October 31 of each year until completion of the Project, to furnish to the Association its proposed annual work plan and associated budget for the following year for review and concur- rence and thereafter promptly implement such work plan and asso- ciated budget, as approved by the Association. ARTICLE V Other Covenants Section 5.01. (a) The Borrower shall cause CARDER-Borgou and SONAGRI to maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations and financial condition of CARDER-Borgou and SONAGRI, including without limitation to the foregoing, separate accounts reflecting their operations, resources and expenditures in respect of the Project and identifying, inter alia, all expenditures on account of which withdrawals are requested from the Credit Account, or from the Fund Loan Account, on the basis of certi- ficates of expenditure. (b) The Borrower shall cause CARDER-Borgou and SONAGRI to 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, or from the Fund Loan Account, on the basis of certificates of expenditures and shall enable the Association's and the Fund's accredited representatives to examine such records. (c) The Borrower shall cause CARDER-Borgou and SONAGRI to: (i) have their accounts and financial statements (balance - 11 - sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than four 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 shall have reasonably requested, includ- ing 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) hereof as to whether the proceeds of the Credit withdrawn from the Credit Account, or from the Fund Loan Account, on the basis of certificates of expenditure have been used for the purpose for which they were provided; and (iii) furnish to the Association such other information concerning the accounts and financial statements of CARDER-Borgou and SONAGRI and the audit thereof as the Association shall from time to time reasonably request. (d) The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consistently main- tained appropriate accounting practices the operations, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower other than CARDER-Borgou and SONAGRI, responsible for carrying out any Part of the Project. Section 5.02. The Borrower shall cause CARDER-Borgou and SONAGRI to each take out and maintain with responsible insurers, or to each make other provision satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 5.03. (a) The Borrower shall cause CARDER-Borgou and SONAGRI to manage their affairs, to carry out their operations and to maintain their financial position in accordance with appropriate administrative, economic, financial and agricultural practices, under qualified and experienced management assisted by competent staff in adequate number. (b) Without limitation upon its obligations under paragraph (a) of this Section, the Borrower shall: (i) cause CARDER-Borgou and SONAGRI to maintain adequately the buildings, equipment, vehicles, and other facilities provided under the Project, and - 12 - to make all necessary repairs and renewals thereof; and (ii) provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 5.04. (a) To ensure adequate cotton production incentives the Borrower shall, by March 31 for each year of the Project, set the minimum price for seed cotton to be paid to producers on delivery in accordance with criteria satisfactory to the Borrower and the Association. (b) To recover an adequate portion of its costs for the support of cotton production the Borrower shall: (i) progressively raise the price charged to farmers for fertilizers and insecti- cides to levels satisfactory to the Borrower and the Association; and (ii) (A) for the 1981/82 cotton campaign, charge interest at the rate of at least 11% per annum for seasonal and medium term credits to cotton growers for financing production inputs and agricultural equipment and (B) for subsequent campaigns, adjust such interest rate in accordance with criteria satisfactory to the Borrower and the Association. (c) To ensure that costs in the cotton sector are properly reflected the Borrower shall introduce for the 1981/82 cotton campaign a revised cotton bareme, satisfactory to the Borrower and the Association. Section 5.05. The Borrower shall, by December 31, 1983, take all action necessary to cause farmers in the Borgou province to pay for improved seed for foodcrops furnished to such farmers, such payment to be sufficient to cover the Borrower's costs in producing and distributing such seed. 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, namely, that: (a) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of CARDER-Borgou or SONAGRI or for the suspension of their respective operations; - 13 - (b) the SONAGRI Statutes or the CARDER Statutes shall have been amended, suspended or abrogated so as to affect materially and adversely the operations or financial condition of SONAGRI or CARDER-Borgou; and (c) (i) subject to subparag-Lph (ii) of this paragraph: (A) the right of the Borrower to withdraw the prc-eeds of the Fund 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 agreement providing therefor; or (B) the Fund 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 (B) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consis- tent 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 events are specified pursuant to paragraph (d) thereof, namely that: (a) any event specified in paragraph (a) or (b) of Section 6.01 of this Agreement shall occur; and (b) any event specified in paragraph (c) (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, namely, that: - 14 - (a) the execution on behalf of the Borrower of the Fund Loan Agreement has been duly authorized or ratified by all necessary governmental action and all other conditions precedent to the effectiveness of the Fund Loan pursuant to the Fund Loan Agreement (save for the effectiveness of this Agreement) have been duly fulfilled; and the Fund has appointed the Association, with the concurrence of the Borrower, as Cooperating Institution to administer the Fund Loan on terms and conditions acceptable to the Association; (b) the Advance Account has been opened as provided in paragraph (b) (i) of Section 4.02 of this Agreement and the Borrower has furnished evidence satisfactory to the Association that the initial deposit of 250 million CFAF into said Account has been made; (c) the Project manager referred to in Section 4.03 (a) (ii) (1) of this Agreement has been nominated in accordance with the provisions of said Section and has assumed his duties; and (d) the first work plan and associated budget to be furnished to the Association under Section 4.07 (i) of this Agreement has been approved by the Association. Section 7.02. The date Cb)". ' k - is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 7.03. The obligations of the Borrower under Section 4.03 (a) (ii) and Article V of this Agreement and the provisions of paragraph (a) of Section 6.02 of this Agreement shall cease and determine on the date on which the Development Credit Agree- ment shall terminate or on a date ten 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 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 provi- sions of Sections 12.04 and 12.05 of the General Conditions, the Development Credit Agreement shall be deemed to be, or to remain, - 15 - 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; provided, however, that in the case described in the foregoing clause (ii) such termination shall apply only to the responsibilities of the Association as such Cooperating Institution. ARTICLE VIII Representatives of the Borrower; Addresses Section 8.01. The Minister of the Borrower at the time responsible for finance is designated as representative of the Borrower for the purposes of Section 11.03 of the General Condi- tions. Section 8.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministry of Finance P.O. Box 302 Cotonou People's Republic of Benin Cable address: Telex: MINIFINANCES 5009 or Cotonou 5289 For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America - 16 - 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. PEOPLE'S REPUBLIC OF BENIN By )i-Xk a""",kt; Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President Western Africa - 17 - 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: Amount of the Amount of the Credit Allocated Fund Loan % of (Expressed Allocated Expenditures in SDR (Expressed in to be Category Equivalent) SDR Equivalent) Financed (1) Insecticides, 2,400,000 1,700,000 100% of in- fertilizers and cremental other produc- expenditures tion inputs for Part B of the Project (2) Civil works 1,100,000 800,000 72% and buildings (3) Equipment 600,000 550,000 72% (4) Vehicles: (a) for Parts 1,100,000 750,000 100% A, B, C, D and E of the Project (b) for Part 550,000 400,000 100% F of the Project - 18 - Amount of the Amount of the Credit Allocated Fund Loan % of (Expressed Allocated Expenditures in SDR (Expressed in to be Category Equivalent) SDR Equivalent) Financed (5) Local personnel and other opera- ting costs: (a) for Parts A, 5,000,000 3,600,000 72% B, C, D, and E of the Project (b) for Part F 500,000 350,000 72% of the Project (6) Consultants' 2,350,000 1,750,000 100% services, studies and scholarships (7) Refunding of 500,000 nil Amount due Advances (8) Unallocated 1,600,000 1,100,000 TOTAL 15,700,000 11,000,000 2. "Incremental expenditures" means the amount of expenditures for insecticides, fertilizers and other production inputs for Part B of the Project during any fiscal year of the Borrower over and above the total amount of such expenditures for insecticides, fertilizers and other production inputs made available by CARDER- Borgou to farmers in Borgou province during the previous fiscal year. 3. 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 - 19 - 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 nf 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, in- crease 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. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expenditures prior to the date of this Agreement or the date of the Fund Loan Agreement, whichever shall be the later. 5. Notwithstanding the allocation of an amount of the Credit or the Fund Loan or the disbursement percentages set forth in the table in paragraph 1 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 or Subcategory will be insufficient to finance the agreed percentage of all expenditures in that Category or Subcategory, the Association may, by notice to the Borrower, reallocate to such Category or Subcategory, to the extent required to meet the estimated shortfall, proceeds of the Credit or the Fund Loan which are then allocated to another Category or Subcategory and which in the opinion of the Association are not needed to meet other expenditures. 6. If the Association shall have reasonably determined that the procurement of any item in any Category or Subcategory 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. - 20 - SCHEDULE 2 Description of the Project The Project is designed to expand agricultural production and improve the management and technical infrastructure of the cotton sub-sector in the Borrower's Borgou province so as to raise the income and living standards of farmers in such province and promote the Borrower's export trade. To achieve this purpose the Project includes in particular the strengthening and support of the institutions responsible for the sub-sector and the provision of improved extension, cooperative, training and social services in such province, primarily for the benefit of small individual farmers and GRVCs. The Project consists of the following Parts: Part A: Expansion and Improvement of the technical infra- structure and field activities of CARDER-Borgou (i) The strengthening and reorganization of the management of CARDER-Borgou. (ii) The construction, reconstruction and equipping of CARDER-Borgou facilities. (iii) The strengthening and reorganization of extension services, including the restructuring of such services through the implementation of a training and visit system, and the expansion of such services for animal traction methods. (iv) The consolidation of existing, and creation of new, GRVCs. (v) The establishment and initial operation of a training center at Ina and scholarships for personnel involved in Project execution. (vi) The establishment and initial operation of a seed multiplication unit at Alafiarou and the construction and initial operation of a seed processing plant at Parakou. - 21 - (vii) (A) The improvement of the civil engineering techniques employed by Genie Rural, (B) the establishment and initial operation of a bottomland development unit within Genie Rural for the rehabilitation of about 500 ha of bottomlands, and (C) the construction or recon- struction of about 130 wells. Part B: Production Inputs and Agricultural Equipment (i) The supply to farmers of improved production inputs, together with improvement in the acquisition and distri- bution system for such production inputs. (ii) The provision of agricultural credit to farmers for purchase of production inputs and of about 4,000 units of equipment for the use of draft animals. Part C: Agricultural Research Agricultural research on foodcrops and on cotton growing to be carried out at the DRA stations in Ina and in Cotonou, respectively. Part D: Project Monitoring and Evaluation Unit Establishment and operation of a Project monitoring and evaluation unit at Parakou. Part E: Project Coordinating Unit Establishment and operation of a Project coordinating unit, to coordinate execution of the Project, which will be based at Cotonou, under the supervision of MDRAC. Part F: Strengthening of SONAGRI The strengthening of SONAGRI's financial management proce- dures and cotton processing and marketing systems. Part G: Studies (i) Bottomlands inventory and associated crop development study in the Borgou province. - 22 - (ii) A study on the feasibility of a possible follow-up project. The Project is expected to be completed by June 30, 1985. - 23 - SCHEDULE 3 Procurement A. International Competitive Bidding 1. Except as provided in Part C hereof, goods and 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. Contracts for similar items will be grouped to the extent possible in order to derive maximum benefits from bulk procure- ment. 4. 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 the evaluation of the bids. - 24 - B. Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A of this Schedule, goods manufactured in Benin 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 Benin 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 Benin 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 - 25 - 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 C which as a result of the comparison under paragraph 3 is the lowest evaluated bid shall be selected. C. Other Procurement Procedures 1. Contracts for goods estimated to cost less than $100,000 equivalent each may be awarded on the basis of competitive bidding advertised locally, in accordance with procedures acceptable to the Association, provided, however, that the aggregate price of the contracts so awarded shall not exceed $2,500,000 equivalent. 2. Contracts for goods estimated to cost less than $50,000 equivalent each may be awarded on the basis of a solicitation of price quotations from at least three reputable suppliers, provided, however, that the aggregate price of the contracts so awarded shall not exceed $1,600,000 equivalent. 3. Contracts for the construction of buildings and dams may be awarded on the basis of competitive bidding advertised locally, in accordance with procedures acceptable to the Association. D. 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 - 26 - 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. (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. 3. Before agreeing to any material modification or waiver of the terms and conditions of a contract, or granting an extension of the stipulated time for performance of such contract, or issuing any change order under such contract (except in cases of extreme urgency) which would increase the cost of the contract by more than 15% of the original price, the Borrower shall inform the Association of the proposed modification, waiver, extension or change order and the reasons therefor. The Association, if it determines that the proposal would be inconsistent with the provisions of this Agreement, shall promptly inform the Borrower and state the reasons for its determination. 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 L. FOR SEC ETARY