Niger - Irrigation Rehabilitation Project : Credit 1618 - Credit Agreement - Conformed

DIT NUMBER 1618 NIR OFFICIAL DOCUMENTS Development Credit Agreement (Irrigation Rehabilitation Project) between REPUBLIC OF NIGER and INTERNATIONAL DEVEIOFENT ASSOCIATION Dated , 1985 CREDIT NUMBER 1618 NIR DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated 6, , 1985, betwI.men REPUBLIC OF NIGER (the Borr r) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS (A) the Borrower, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Association to assist in the financing of the Project; (B) Parts A, B (1), B (2), B (4), B (5), D and E of the Project will be carried out by ONARA with the Borrower's assistance and, as part of such assistance, the Borrower will make available to ONAHA the proceeds of the Credit as provided in this Agreement; (C) by an agreement (hereinafter called the KFW Agreement) to be entered into between the Borrower and the Kreditanstalt f/Ur Wiederaufbau, an agency of the Federal Republic of Germany (hereinafter called KFW), KFW intends to make a grant (herein- after called the KFW Grant) to the Borrower in an aggregate prin- cipal amount equivalent to about three million nine hundred thousand dollars ($3,900,000) to assist in the financing of the Project; and (D) by an agreement (hereinafter called the CCCE Agreement) to be entered into between the Borrower and Caisse Centrale de Coopgration Economique, an agency of the Republic of France (hereinafter called CCCE), CCCE intends to make a loan (herein- after called the CCCE Loan) to the Bo,rrower in an aggregate amount equivalent to about nine million three hundred thousand dollars ($9,300,000) to assist in the financing of 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 set forth in this Agreement and in the Project Agreement of even date herewith between the Association and ONAHA; NOW THEREFORE the parties hereto hereby agree as follows: -2- ARTICLE I General Conditions; Definitions Section 1.01. The General Conditions Applicable to Develop- ment Credct Agreements of the Association, dated January 1, 1985, (the General Conditions) constitute an integral part of this Agreement. Section 1.02. 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) "Project Agreement" means the agreement between the Association and ONAHA of even date herewith, as the same may be amended from time to time, and such term includes all schedules and agreements supplemental to the Project Agreement; (b) "Project Area" means an area of about 5,000 hectares comprising two irrigation systems the first in the Niamey Province and consisting of the Niger River Valley and the second in the Tahoua Province and consisting of the Ader-Doutchi-Maggia Valley; and "perimeters" 'mean irrigation zones comprised within said systems; (c) "ADM" means the Ader-Doutchi-Maggia Valley; (d) "ONAHA" means the Office National des Am6nagements Hydro-Agricoles, an Etablissement Public A caractare Industriel et Commercial of the Borrower established and operating pursuant to Ordonnance No. 78-39 and Decree No. 78-154/PCMS/MDR both dated December 28, 1978; (e) "INRAN" means Institut National de Recherches Agrono- miques du Niger, an agency of the Borrower established pursuant to Ordonnance No. 75-1/PCMS dated January, 1975; (f) "NIGELEC" means Socifte Nig&rienne d'Electricitg, incorporated in 1968; (g) "RINI" means Societ6 Riz du Ni&er, an entity of the Borrower established on January 1, 1967 and incorporated in the -3- form of a Societe A.onyme and registered with the Trade Register under NIAMEY RC 624; (h) "Project Preparation Advance" means the aggregate of the project preparation advances granted by the Association to the Borrower pursuant to exchanges of letters dated April 1, 1981 and June 30, 1981 and July 19, 1982 and November 8, 1983 between the Borrower and the Association; (i) "Special Account" means the account to be opened and maintained pursuant to Section 2.02 (b) of this Agreement; and (j) "CFAF" means the currency of the Borrower. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Bor- rower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount in various currencies equivalent to nine million six hundred thousand Special Drawing Rights (SDR 9,600,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Asso- ciation, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit. (b) The Borrower shall, for the purposes of the Project, open and maintain in CFAF a special account in a commercial bank in Niamey on terms and conditions satisfactory to the Associa- tion. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 3 to this Agreement. (c) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and pay to itself the amount required to repay the prin- cipal amount of the Project Preparation Advance withdrawn and -4- outstanding as of such date and to pay all unpaid charges there- on. The unwithdrawn balance of the authorized amount of the Pro- ject Preparation Advance shall thereupon be cancelled. Section 2.03. The Closing Date shall be December 31, 1990 or such later date as the Association shall establish. The Asso- ciation shall promptly notify the Borrower of such later date. Section, 2.04. (a) The Borrower shall pay to the Association a commitment charge at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of the Credit not with- drawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Development Credit Agree- ment to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or shall be cancelled. (b) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without restrictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Commitment charges and service charges shall be payable semiannually on January 1 and July 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each Janu- ary 1 and July 1 commencing July 1, 1995, and ending January 1, 2035. Each installment to and including the installment payable on January 1, 2005, shall be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter shall be one and one-half per cent (1-1/2%) of such principal amount. Section 2.08. The currency of the French Republic is hereby specified for the purposes of Section 4.02 of the General Condi- tions. -5- Section 2.09. ONAHA is designated as representative of the Borrower for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement, and, to this end, without any limitation or restric- tion upon any of its other obligations under the Development Credit Agreement, shall: (i) (A) carry out Part B (3) of the Project through its Ministry of Hydrology and Environment with the assistance of ONAHA; and (B) carry out Part C (1) of the Project through its Ministry of Education (in respect of the preparation, execution and supervision of training programs) and its Ministry of Planning (in respect of farmer mobilization), with the assistance of, and in coordination with, ONAHA which will make available to the Borrower the means (other than personnel) required to carry out said Part of the Project; (ii) (A) cause RINI to carry out its operation and conduct its affairs in accordance with sound administrative, financial and agricultural practices, under the supervision of qualified and experienced management assisted by com- petent staff in adequate numbers. To that effect, the Borrower shall cause RINI to enter into a management contract with a management consulting firm whose experience and qualifications shall be satisfactory to the Association; (B) before signing the management contract referred to in paragraph (A) above, the Borrower shall provide the Association with -6- the terms and conditions of such contractofor its approval; and (C) -cause RINI to carry out Part F of the Project, all with due diligence and effi- ciency and in conformity with appropriate administrative, financial, technical and agricultural practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose; and (iii) cause ONAHA to perform in accordance with the provisions of the Project Agreement all the obligations of ONAHA therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable ONAHA to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall make the proceeds of the Credit available to ONARA as a grant for the carrying out of Parts A, B (1), B (2), B (4), B (5), D and E of the Project. (c) The Borrower shall prior to December 31, 1985: (i) make arrangements, satisfactory to the Association, with ONAHA provid- ing for the mutual obligations-and contributions of the Borrower and ONAHA in carrying out Parts B (3) and C (1) of the Project; and (ii) make contractual arrangements satisfactory to the Asso- ciation, for the carrying out of Part C (2) of the Project, with agricultural cooperatives in the Project Area whose members receive seasonal and medium-term credit under Part C (2) of the Project. (d) The Borrower shall for the purposes of the seasonal and medium-term credit referred to under Part C (2) of the Project, apply the terms and conditions set forth in Schedule 4 to this Agreement, as such Schedule may be amended from time to time by agreement betw&hn the Borrower and the Association. Section 3.02. Except as the Association shall otherwise agree, procurement of the goods, works and consultants' services required for the Project and to be financed out of the proceeds -7- of the Credit shall be governed by the provisions of Schedule 1 to the Project Agreement. Section 3.03. The Borrower and the Association hereby agree that the obligations set forth in Sections 9.03, 9.04, 9.05, 9.06, 9.07 and 9.08 of the General Conditions (relating to in- surance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition, respectively, in respect of the Parts of the Project to be carried out by ONAHA) shall be carried out by ONAHA pursuant to Section 2.03 of the Project Agreement, it being understood that the obligations under Section 9.08 of the General Conditions relating to land acquisition shall be carried out by the Borrower for purposes of Part B (3) of the Project. Section 3.04. The Borrower shall take all necessary measures to have an analysis carried out of the debts of the members of cooperatives in the Project Area, including concrete proposals for the payment, cancellation or rescheduling of such debts. ARTICLE IV Other Covenants Section 4.01. The Borrower shall maintain or cause to be maintained separate records and accounts adequate to reflect in accordance with sound accounting pgractices the operations, resources and expenditures in respect of the Project of the departments or agencies of the Borrower responsible for carrying out Parts B (3) and C (1) of the Project. Section 4.02. The Borrower shall pay to ONAHA quarterly at the beginning of every quarter amounts sufficient to finance ONAHA's overhead expenditures for services performed by ONAHA on behalf of the Government and the costs of which are not recover- able from beneficiaries nor covered by any external sources of financing. Section 4.03. The Borrower shall take all necessary measures to enable farmers in the Project Area to sell at the official price that part of their production of paddy that they were not able to sell. -8- Section 4.04. The Borrower shall cause NIGELEC to provide farmers in the Project Area with preferential rates for irriga- tion. Section 4.05. The Borrower shall:. (i) have the accounts of each cooperative in the Project Area audited every two years, in accor- dance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; and (ii) furnish to the Association, as soon as available, but in any case n6t later than four months after the end of each 'two-year period to which they relate, the full report of such audit. ARTICLE V Remedies of the Association Section 5.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional events are specified: (a) ONAHA shall have failed to perform any of its obliga- tions under the Project Agreement. (b) As a result of events which have occured after the date of the Development Credit Agreement, an extraordinary situation shall have arisen which shall make it improbable that ONAH1A will be able to perform its obligations under the Project Agreement. (c) The instruments referred to in Section 1.02 (d), (e), (f) or (g) of this Agreement shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of ONAHA to perform any of its obligations under the Project Agreement, of RINI to carry out Part F of the Project or of NIGELEC or INRAN to carry out their obligations under the agreements set forth in paragraph (c) of Section 2.01 of the Project Agreement. (d) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of ONAHA, RINI or INRAN or for the suspension of the opera- tions of any of them. -9- (e) Subject to subparagraph (ii) of this paragraph: (i) (A) the right of the Borrower to withdraw the proceeds of any loan or credit (including the KFW Grant 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 agreement providing therefor or (B) any such loan or credit shall have become due and payable prior to the agreed maturity thereof. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Association that: (A) such suspension, cancellation, termination or prematuring is not caused by the failure of the Borrower to perform any of its obliga- tions under such agreement; and (B) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consistent with the obliga- tions of the Borrower under this Agreement. Section 5.02. For the purposes of Section 7.01 (d) of the General Conditions, the following additional events are specified: (a) the event specified in paragraph (a) of Section 5.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower; and (b) the events specified in paragraphs (c) and (d) of Sec- tion 5.01 of this Agreement shall occur, or the event specified in paragraph (e)(i)(B) of Section 5.01 of this Agreement shall occur subject to the proviso of paragraph (e)(ii) of said Sec- tion 5.01. -10- ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as addi- tional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) all conditions precedent to the effectiveness of, or initial disbursements under, the KFW Agreement and the CCCE Agreement shall have been fulfilled; (b) arrangements satisfactory to the Association shall have been made for the assumption by the Borrower of all of ONAHA's debts to Caisse Nationale de Credit Agricole; (c) the Borrower shall: (i) have prepared, in consultation with cooperatives in the Project Area, a plan satisfactory to the Association for improving tid cooperatives' accounting systems, including an analysis of the debts of cooperatives and concrete proposals for the payment, cancellation or rescheduling of such debt; and (ii) have achieved progress, satisfactory to the Asso- ciation, in the implementation of such plan; (d) ONAHA shall have employed, on a permanent basis, a financial manager, a chief accountant and three regional account- ants with qualifications satisfactory to the Association; (e) arrangements satisfactory to the Association shall have been made for the settlement of ONAHA's arrears to its sup- pliers; and (f) the management contract referred to in Section 3.01 (a) (ii) (A) of this Agreement has been signed. Section 6.02. The following is specified as an additional matter, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association, namely, that the Project Agreement has been duly authorized or ratified by ONAHA, and is legally binding upon ONARA in accordance with its terms. Section 6.03. The date 120 days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. - 11 - Section 6.04. The obligations of the Borrower under Sec- tions 4.02, 4.03, 4.04 and 4.05 of this Agreement and the pro- visions of paragraph (b) of Section 5.02 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on the date 15 years after the date of this Agreement, whichever shall be the earlier. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister of the Borrower responsible for Planning is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministere du Plan B.P. 862 Niamey Niger Cable address: Telex: MINIPLAN 5230 CND Niamey - 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) - 12 - IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, 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 ltuthorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President Western Africa - 13 - SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Civil Works: (a) Rehabilitation 1,130,000 100% of catchment dams under Part A of the Project (b) Other 1,340,000 49% (2) Equipment: (a) Construction 1,130,00 100% (b) Agricultural 310,000 90% (threshers) (c) Agricultural 110,000 44% (others) (3) Salaries of 1,440,000 49% ONARA's incre- mental staff on contract (other than those included in Category (4)), training and operating costs and office equip- ment -14- Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (4) Services of 1,440,000 100% consultants, experts and specialists, and studies (5) Seasonal credit 210,000 49% fund (6) Special Account 830,000 Amounts to be deposited pur- suant to para- graph 3 (a) of Schedule 3 to this Agreement (7) Refunding of 1,030,000 Amount due under Project Prepara- Section 2.02 (c) tion Advance of this Agreement (8) Unallocated 630,000 TOTAL 9,600,000 2. Notwithstanding the provisions of paragraph I above: (a) no withdrawals shall be made in respect of payments made for expen- ditures prior to the date of this Agreement; and (b) no with- drawals shall be made in respect of payments for expenditures to be made under category 2 (b) and (c) and under category (5) until the Association has received -5atisfactory evidence that the Bor- rower has made the contractual arrangements referred to in Sec- tion 3.01 (c)(ii) of the Development Credit Agreement. -15 - SCHEDULE 2 Description of the Project The objectives of the Project are to increase food produc- tion and farm incomes in the Republic of Niger, promote inde- Dendent management of irrigated perimeters by farmers, protect investments already made in irrigation and agriculture and thereby reduce the Borrower's recurrent costs. The Project to be carried out in the Project Area consists of the following parts, subject to such modifications thereof as the Borrower and the Association may agree upon from time to time to achieve such objectives: Part A: (1) Construction of rehabilitation works in about 15 peri- meters totalling about 2,300 ha in the Niger Valley and consisting of: (i) electrification of about 7 irrigated perimeters, including the erection of about 24 km of a medium tension transmission line; (ii) installation of about 40 electric pumping units and 4 diesel-driven pumping units in 14 pumping stations including rehab- ilitation/construction of associated structures and civil engineering works; (iii) reshaping and reinforce- ment of about 30 km of protection dykes; (iv) rehabili- tation of about 75 km of irrigation canals, 135 km of primary and secondary drains, 190 km of field drains, 190 km of access roads and of associated structures; and (v) construction of 3 cooperative stores. (2) Construction of rehabilitation works in the ADM valley totalling about 850 ha and consisting of: (i) rehabili- tation of 3 catchment dams, including the raising of the crest level of one dam; (ii) reshaping and rein- forcement of about 15 km of protection dykes; and (iii) rehabilitation of about 30 km of tertiary drains and 5 km of primary roads. (3) Maintenance of irrigation and drainage canals, includ- ing purchase of necessary equipment and establishment of two maintenance brigades at ONARA's Niamey and Tillabery Regional Offices. - 16 - Part B: (1) Crop intensification on about 20 perimeters included in the Project to: (i) improve average paddy yield on about 15 rice perimeters; (ii) increase crop intensity on about 15 rice perimeters; and (iii) increase average cotton and sorghum yield on about 5 perimeters in the ADM valley. (2) Establishment of a seed multiplication scheme involving multiplication of small quantities of foundation seed produced by INRAN on collective cooperative seed plots or by farmers under contract with the cooperatives. (3) Establishment of village woodlots on soils unsuitable for crops. (4) Training of about 30 blacksmiths in the maintenance of animal draft equipment supplied to farmers under the animal traction program included in Part C (2) (b) of the Project. (5) Extension pragram to advise farmers on the application of the results of the adaptive research included in Part D of the Project and on seed multiplication standards and training of extension staff. Part 0: (1) A functional literacy and numeracy program to assist cooperatives in the: (i) proper maintenance of assets at their disposal; (ii) preparation and monitoring of their semi-annual budgets; (iii) preparation, reading and use of their accounts; (iv) management of primary paddy marketing; and (v) undertaking of collective and productive investments. (2) (a) Provision of seasonal credit to members of cooperatives for purchase of fertilizer, pesti- cides and other agricultural inputs as well as for the payment of water and related charges. (b) Provision of medium-term credit to cooperatives: (i) for purchase of collective equipment including pumps for gardening, paddy dehullers and stores; - 17 - (ii) for promotion of an animal traction program involving the supply to farmers, on credit, of about 2,000 pairs of draft animals with equipment (tool bar, plow, cultivator and cart) and 1,500 pedal threshers; and (iii) for supply, on credit, of tools and equipment to blacksmiths trained under Part B (4) of the Project for maintenance of animal draft equipment supplied under the animal traction promotion program. Part D: Program of adaptive research and foundation seeds production by INRAN involving: (i) fertilizer trials on sites representative of main ecological conditions; (ii) introduction and screening of new rice varieties intended for technological packages of the extension services; and (iii) production of rice foundation seed for multiplication by cooperatives. Part E: (1) Strengthening of ONAHA's project executing capabilities including: (i) provision of incremental staff, office equipment and vehicles to ONARA's headquarters and regional offices; (ii) the establishment and operation by ONAHA of a new unit for monitoring, evaluation, financial planning, budgeting and budgetary control; and (iii) annual audits of ONARA's operations. (2) A study of the use of groundwater in the Ader-Doutchi- Maggia Valley to supplement or replace gravity irriga- tion. (3) A study of water charges in the Project Area. Part F: (1) Strengthening of RINI's ability to process incremental paddy production under the Project and to improve its overall efficiency including the provision to RINI of additional storage capacity, weighing equipment and of additional funds for the purchase of about 3,000 tons of paddy each season. - 18 - (2) A feasibility study of the comparative use of husk combustion and diesel engines as energy source for the operation of rice mills. The Project is expected to be completed by June 30, 1990. -19- SCHEDULE 3 Special Account 1. For the purposes of this Schedule: (a) the term "Category" means a category of items to be financed out of the proceeds of the Credit as set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (b) the term "eligible expenditures" means expenditures 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 allocated from time to time to Categories (1) (b), 2 (c), (3), (4) and (5) in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount in CFA Francs equivalent to the amount allocated to Category (6) which is to be withdrawn from the Credit Account and deposited in the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Payments out of the Special Account shall be made exclu- sively for eligible expenditures in accordance with the provi- sions of this Schedule. 3. After the Association has received evidence satisfactory to the Association that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdra- wals to replenish the Special Account may be made as follows: J (a) On the basis of a request or requests by the Borrower for a deposit or deposits which add up to the aggregate amount of the Authorized Allocation, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit in the Special Account such amount or amounts as the Borrower shall have requested. (b) The Borrower shall furnish to the Association requests for replenishment of the Special Account at such intervals as the Association shall specify. On the basis of such requests, the Association shall withdraw from the Credit Account and deposit into the Special Account such amounts as shall be required to replenish the Special Account with amounts not exceeding the amount of payments made out of the Special Account for eligible - 20 - expenditures. Except as the Association may otherwise agree, each such deposit shall be withdrawn by the Association from the Credit Account under the respective Categories (1) (b), (2) (c), (3), (4) and (5), and in the respective equivalent amounts, as shall have been justified by the evidence supporting the request for such deposit furnished pursuant to paragraph 4 of this Sched- ule. 4. For each payment made by the Borrower out of the Special Account for which the Borrower requests replenishment pursuant to paragraph 3 (b) of this Schedule, the Borrower shall furnish to the Association, prior to or at the time of such request, such documents and other evidence as the Association shall reasonably request, showing that such payment was made for eligible expen- ditures. 5. (a) Notwithstanding the provisions of paragraph 3 of this Schedule, no further deposit into the Special Account shall be made by the Association when either of the following situations first arises: (i) the Association shall have determined that all further withdrawals can be made directly by the Borrower from the Credit Account in accordance with the provisions of paragraph (a) of Section 2.02 of this Agreement; or (ii) unless otherwise agreed by the Association, when the total unwithdrawn amount of the Credit allo- cated to Categories (1) (b), (2) (c), (3), (4) and (5) for the Project, minus the amount of any out- standing qualified agreement to reimburse made by the Association and of any outstanding special commitment entered into by the Association pur- suant to Section 5.02 of the General Conditions with respect to the Project, shall be equal to the equivalent of twice the amount of the Authorized Allocation. (b) Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to Catego- ries (1) (b), (2) (c), (3), (4) and (5) for the Project shall follow such procedures as the Association shall specify by notice to the Borrower. Except as the Association shall otherwise agree, such further withdrawals shall be made only after and to the - 21 - extent that the Association shall have been satisfied that all such amounts remaining on deposit in the Special Account as of the date of such notice have been or will be utilized in making payments for eligible expenditures* 6. (a) If the Association shall have" determined at any, time that any payment out of the Special Account (i) was made for any expenditure or in any amount not eligible pursuant to paragraph 2 of this Schedule, or (ii) was not justified by the evidence furnished pursuant to paragraph 4 of this Schedule, the Borrower shall, promptly upon notice from the Association deposit into the Special Account (or, if the Association shall so request, refund to the Association) an amount equal to 'Lhe amount of such payment or the portion thereof not so eligible or justified. Unless otherwise agreed by the Association, no further deposit by the Association into the Special Account shall be made until the Borrower has made such deposit or refund. (b) If the Association shall have determined at any time that any amount outstanding in the Special Account will not be required to cover further payments for eligible expenditures, the Borrower shall, proiptly upon notice from the Association, refund to the Association such outstanding amount. - 22 - SCHEDULE 4 Seasonal and Medium-term Credit (Part C (2) of the Project) A. Seasonal Credit (Part C (2)(a) of the Project) 1. The Borrower shall make available to agricultural cooperatives in the Project area as a grant proceeds of the Credit withdrawn under Category 5 of the table set forth in paragraph (1) of Schedule 1 to the Development Credit Agreement. 2. Cooperatives shall be required to purchase seasonal agricultural inputs needed by their members with such proceeds. 3. Cooperatives shall be required to make such inputs available to their members in the form of credit in kind under arrangements satisfactory to the Association which shall include, inter alia, the obligation for the members to repay the respective amounts, with interest of not less than 12% per annum over a period of six months. 4. Each cooperative shall be required to create a revolv- ing fund to which they shall credit all amounts made available to them for, or repaid to them on account of seasonal credit, and debit all amounts disbursed for the purchase of seasonal inputs. B. Medium-term Credit (Part C (2)(b) of the Project) 1. The Borrower shall make available to the agricultural cooperatives in the Project Area as a loan it kind equipment financed with the proceeds of the Credit allocated to Categories (2)(b) and (c) of the table set forth in paragraph 1 of Schedule 1 to the Development Credit Agreement. The terms and conditions of such loan shall be: a repayment period of 8 years maximum includ- ing a two years maximum grace period and interest of 1% per annum. 2. Cooperatives shall be required to make such equipment available to their members in the form of credit in - 23 - kind under arrangements satisfactory to the Association which shall include, inter alia, the obligation for the members to pay a down-payment equivalent to at least 10% of the equipment price, an interest rate of 12% per annum and a maturity period of 5 years maximum includ- ing a one year maximum grace period. 3. Cooperatives shall apply all funds repaid to them to the repayment of the loan principal and all interest accrued thereon to the Borrower. 4. The Borrower shall apply all funds repaid by the cooperatives including all interest thereon to the provision of further medium-term credit to cooperatives in the Project Area. C. Other requirements Farmers shall not be required to sell paddy to their cooperatives in quantities exceeding the equivalent in value of amounts owed by such farmers to the cooperatives on account of credit and shall have the right to sell any surplus of marketable paddy to RINI or to private parties. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoIag 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