Rwanda - Gitarama Agricultural Production And Minagri Institutional Developmetn Project : Credit 1669 - Credit Agreement - Conformed

CREDIT NMBER 1669 RW Development Credit Agreement (Gitara~a Agricultural Production and MINAGRI Institutional. Development Project) RWANDESE REPUBLIC and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated 2.3 , 1986 CREDIT NUMBER 1669 RW DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated =,23 , 1986, between the RWANDESE REPUBLTC (the Borrower) and the INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS 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; 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; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Develop- ment Creditp Agreements" of the Association, dated January 1, 1985, with the second sentence of Section 2.03 deleted (the Gen- eral Conditions), constitute an integral part of this Agreement. Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions have the respec- tive meanings therein set forth and the following additional terms have the following meanings: (a) "Ministry" and "MINAGRI" mean the Borrower's Ministry responsible for agriculture; (b) "ISAR" means the Institute of Agronomic Sciences of Rwanda; (c) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement; and (d) "Project Preparation Advance" means the project prepa- ration advance (P 347) granted by the Association to the Borrower pursuant to an exchange of letters dated September 13, 1985 and November 5, 1985 between the Borrower and the Association. -2- 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 eleven million seven hundred thousand Special Drawing Rights (SDR 11,700,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of this Section and of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Association, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement 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 the National Bank of Rwanda or another banking institution acceptable to the Association a special account in dollars on terms and conditions satisfactory to the Association. Deposits into, and payments out og, 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 outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advance shall thereupon be cancelled. Section 2.03. The Closing Date shall be September 30, 1991 or such later date as the Association shall establish. The Association 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 -3- 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 re- strictions 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-fourtiis 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 May 1 and November 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each May 1 and Novembedr 1 commencing May 1, 1996, and ending November 1, 2035. Each installment to and including the installment payable on November 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 United States of America is hereby specified for the purposes of Section 4.02 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, shall carry out the Project through the Ministry with due diligence and efficiency and in conformity with appropriate administrative, economic, financial and agricul- tural practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) Without limitation upon the provisions of paragraph (a) of this Section, the Borrower shall carry out the Project in accordance with the Implementation Program set forth in Sched- ule 4 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Associa- tion, and with the Annual Work Programs and Budgets prepared by the Borrower and approved by the Association as provided in such Schedule. (c) In order to facilitate the availability of funds for the Project as and when needed, the Borrower shall maintain two Project Accounts in the National Bank of Rwanda, one in an initial amount of RF 15 million for Part I of the Project and the other in an initial amount of RF 5 million for Part II of the Project. Each such Project Account shall be replenished quarterly in advance so as to maintain the accounts at all times at average levels equal to the estimated requirements for the respective Parts of the Project for three months, 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 of the Credit shall be governed by the provisions of Schedule 5 to this Agreement. Section 3.03. The Borrower shall ensure that the new exten- sion and agricultural service organized under Part I A.1 of the Project: (a) be freely reviewed and evaluated after two years' operation in the first Sub-prefecture covered by the Prcject; and (b) after an exchange of views thereon with the Associa- tion, be extended to cover the entire Prefecture of Gitarama by December 31, 1988. Section 3.04. The Borrower shall ensure that the housing constructed and made available to higher-level field staff of the Ministry under Part I of the Project be so made available at rentals sufficient to cover at least the cost of maintenance of such housing, but in any event not less, on an annual basis, than 2% of investment cost, and that such rental be collected by the person responsible for accounting under Part I of the Project and be used exclusively for such maintenance. Section 3.05. The Borrower shall ensure that the higher- level personnel assigned to the carrying out of Part II of the Project has the necessary qualifications and experience and that -5- the Association be given the opportunity to comment on the proposed terms of reference for all technical assistants to be recruited for Part II of the Project. Section 3.06. Prior to December 31, 1987, the Borrower shall evaluate the results of the activities comprising Part II of the Project and shall take all measures to strengthen the structural and operational capacity of the ministry shown to be necessary by such evaluation. The terms of reference for, and the conclusions of, such evaluation, shall be furnished to the Association for an exchange of views with the Borrower. Section 3.07. The Borrower shall cause the Ministry to prepare, as part of the information to be furnished to the Association pursuant to Section 9.01 of the General Conditions, semi-annual reports on the progress in carrying out the Project. Section 3.03. The Borrower shall establish procedures to ensure: (i) that credits provided to extension staff for the purchase of mopeds and motorcycles under Part I A of the Project be made under procedures requiring repayments to be automatically deducted and withheld from the salaries of the purchasers; and (ii) that such repayments be held by the Ministry in a bank account to -be used exclusively for the purchase of new vehicles for such staff. Section 3.09. The Borrower shall, by March 31, 1986, cause the Ministry to define the terms and conditions of the contri- butions of the communes to the agricultural sector. Section 3.10. Promptly following the signature of this Agreement, the Borrower shall, through the Ministry, enter into arrangements satisfactory to the Association with the Office of Industrial Crops of Rwanda - Coffee (OCIR-Caf ), the Cooperative Research and Training Center, (IWACU), the Banques Populaires and the International Labor Organization or another agency satis- factory to the Association, defining the respective roles of such parties in carrying out Parts I A. and E.(2), (3) and (4) of the Project. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained separate records and accounts adequate to reflect in -6- accordance with sound accounting practices the operations, resources and expenditures, in respect of each part of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall: (i) have the accounts referred to in paragraph (a) of this Section, including the Special Account, audited for each fiscal year 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 six months after the end of each such year, a certified copy of the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning the said accounts and the audit thereof and said records as the Association shall from time to time reasonably request. C (c) For all expenditures with respect to which withdrawals from the Credit Account or payments out of the Special Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, separate records and accounts reflecting such expenditures; (ii) retain until one year after the Association has received the audit report for the fiscal year in which the last disbursement from the Credit Account or, if later, the last payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other docu- ments) evidencing such expenditures; (iii) enable the Association's representatives to examine such records; and -7- (iv) ensure that such separate accounts be included in the annual audit referred to in paragraph (b) of this Section and that the report thereof contain, in respect of such separate accounts, a separate opinion by said auditors as to whether the pro- ceeds of the Credit withdrawn from the Credit Account or paid out of the Special Account in respect of such expenditures were used for the purposes for which they were provided. ARTICLE V Effective Date; Termination 4) Section 5.01. 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 initial deposits into the Project Accounts have been made as specified in Section 3.01 (c) of this Agreement; (b) an*agricultural officer for the first Sub-prefecture, a promotion officer and two certified accountants, all satisfactory to the Association and employed under terms and conditions satisfactory to the Association, have been hired; and (c) the Ministry and ISAR have entered into arrangements satisfactory to the Association defining each of their roles in the adaptive research included in Part I.B of the Project. Section 5.02. The date one hundred twenty (120) days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Minister of the Borrower responsible for finance is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. -8- Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministry of Finance and Economy B.P. 158 Kigali, Rwanda Cable address: Telex: MINIFINECO 502 MINAFFET 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 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. RWANDESE REPUBLIC By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President Eastern and Southern Africa 9 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 (Exprnssed in Expenditures Category SDR Equivalent) to be Financed (1) Civil works, 1,560,000 70% Part I of the Project (2) Vehicles and 100% of foreign Equipment expenditures and 90% of local (a) Part I of 1,560,000 ) expenditures the Project, ) except for ) ISAR ) (b) for ISAR, 30,000 ) Part I.B of ) the Project ) (c) Part II of 650,000 ) the Project ) (3) Consultants' and ) 100% experts' services ) (a) Part I of 2,650,000 ) the Project, ) except for ) ISAR ) (b) for ISAR, 150,000 ) Part I.B of ) the Project ) (c) Part II of the 280,000 ) Project, in- ) cluding audits ) - 10 - Amount of the Credit Allocated % of (Expressed in Expenditure- Category SDR Equivalent) to be Financed (4) Training 100% of foreign exoenditures and (a) Part I of 530,00 ) 90% of local the Project ) expenditures (b) Part II of 750,000 ) the Project ) (5) Agricultural 80,000 100% of foreign inputs expenditures and 90% of local expenditures (6) Operating costs (a) Part I of 500,000 40% until the Project, SDR 330,000 has other than been disbursed of ISAR and 20% there- aftere (b) of ISAR under 30,000 40% until Part I.B of SDR 20,000 the Project has been dis- (excluding bursed and salaries) 20% thereafter (7) Nyabarongo Study 1,200,000 100% Part I.F of the Project (8) Refunding of 900,000 Amount due under Project Prepara- Section 2.02 (c) tion Advance of this Agree- ment (9) Unallocated 830,000 TOTAL 11,700,000 - 11 - 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals from the Credit Account or payments out of the Special Account shall be made in respect of expenditures made prior to the date of this Agreement; - 12 - SCHEDULE 2 Description of the Project The Project's overall objectives are to stimulate agricul- tural production, employment and income in Rwanda and to improve the management of the agricultural sector. The Project includes two major components: Part I, the Gitarama Agricultural Produc- tion component, designed to increase agricultural production and farmers' income in the prefecture of Gitarama, and to constitute a test for a model of agricultural services and agricultural promotion to be replicable at the national level; and Part II, the MINAGRI Institutional Development component designed to reinforce the systems, and develop the procedures and competence, necessary to improve ag7icultural sector planning and management. Specifically, the project comprises 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 I. The Gitarama Agricultural Production Component A. Reorganization of and logistical support to the Agricultural Extension Service, including training of agents, coastruction of office space and housing, expansion of two- and four-wheeled vehicles fleet and of stocks of equipment and supplies. B. Carrying out with the participation of the Institute of Agronomic Sciences of Rwanda (ISAR) of a program of on-farm adaptive research, with a view to identifying specific technical recommendations designed to increase agricultural productivity and to increase farm income in Gitarama. C. Organization of and support to selected agricultural services in the Prefecture, including: (1) production, quality control and sale of improved plant material; (2) erosion control activities; (3) production, quality control and sales of forest and fruit tree seedlings; and formulation of plans for communal forestry development (plans forestiers communaux); and - 13 - (4) provision of animal health services (veterinary facili- ties and initial stock of veterinary products). D. Carrying out by the MINAGRI of a limited program of procure- ment and initial sales of agricultural inputs and implements in Gitarama. E. Carrying out a program of support to institutions involved in agricultural training and 'research, the promotion and financ- ing of agriculture, farm input supply and agro-processing and marketing in Gitarama, including: (1) establishment and maintenance of an Investment Promo- tion Office and the construction of office space necessary therefor; (2) assistance to cooperatives and farmers' groups; (3) support to the Banques Populaires in Gitarama for its programs of agricultural credit and promotional activities, including the construction of necessary buildings to be put at the disposal of such Bank for a stipulated term; and (4) support to artisans and private enterprises in the agricultural sector. F. Carrying out technical, economic and financial studies of various alternatives for the development of the Nyabarongo Valley. Part II. MINAGRI Institutional Development Component A. Carrying out by the MINAGRI of a program designed to improve its capacity in the following areas: (1) sector planning and project preparation; (2) monitoring and evaluation of projects and agricultural services; (3) accounting, financial management and control of projects and services; (4) documentation and diffusion of technical publications and other information; - 14 - (5) general administration, including personnel management, budgeting, correspondence and archives; and (6) computerization of operations in the Ministry. B. Carrying out by the MINAGRI of a training program for its staff. The Project is expected to be completed by December 31, 1990. - 15 - SCHEDULE 3 Special Account 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (1) through (7) set forth in the table in paragraph I of Schedule 1 to this Agreement, except for Categories 2 (b), 3 (b), and 6 (b); (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 the eligible Categories in accor- dance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount of $1,000,000 to be withdrawn from the Credit Account and deposited in the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Except as the Association shall otherwise agree, payments out of the Special Account shall be made exclusively for elIgible expenditures in0accordance with the provisions of this Schedule. 3. After the Association has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Special Account may be made as follows: (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 expenditures. All such deposits shall be withdrawn by the - 16 - Association from the Credit Account under the respective eligible Categories, 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 Schedule. 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 should 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 0 (ii) the total unwithdrawn amount of the Credit minus the amount of any special commitment entered into by the Association pursuant 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 shall follow such procedures as the Association shall specify by notice to the Borrower. Such further withdrawals shall be made only after and to the 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 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 - 17 - 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 the amount of such payment or the portion thereof not so eligible or justified. 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, promptly upon notice from the Association, refund to the Association such outstanding amount for crediting to the Credit Account. - 18 - SCHEDULE 4 Implementation Program A. Organization and Administration The Borrower shall carry out the administrative coordination of the implementation of the Project through the Secr tariat- G n ral of the Ministry. Day to day coordination and adminis- tration of activities shall be delegated to a fonctionnaire dirigeant for each of Parts I and II of the Project: (a) the Director of Agricultural Promotion in the Ministry's Agricultural Production Directorate for Part I, the Gitarama Agricultural Production Component; and (b) the Director of Studies and Plan- ning (DEP) of the Ministry for Part II, the MINAGRI Institutional Development Compe ent. The management and implementation of the two Parts shall rEnain separated: (1) Part I: The Gitarama Agricultural Production Com- ponent. The responsibilitie- for carrying out activi- ties under this component si 11 remain with MINAGRI's organizational structure; at the Gitarama Pr fecture level, the Prefectorial Coordinator shall have respons- ibility for managing the various services of the Ministry. A Management Committee composed of represen- tatives of the MINAGRI and including the Ministries responsible for finance, economy and planning, the Pr fecture and the Sub-pr fectures and headed by the Director of this Part of the Project, shall meet regularly to review progess and discuss issues. Part I.B of the Project (program of adaptive research in the Gitarama pr fecture) shall be carried out by the Ministry and the Institute of Agronomic Sciences of Rwanda (ISAR) in accordance with work programs to be agreed upon annually between them. (2) Part II: The MINAGRI Institutional Development Com- ponent. Activities under this component (Parts II A and B of the Project) shall be carried out and managed by the Ministry's organizational structure. The Director of Studies and Planning shall have responsibility for coordination and administration of activities under the Project. He shall coordinate preparation and subsequent monitoring of the annual work plan for such activities and preparation of appropriate periodic reports. -19 1 B. Annual Work Programs and Budgets Annual work programs and budgets shall be prepared for each component of the Project. They shall detail the objectives and targets of the component for the year in question, the specific activities to be carried out and the required human and financial resources. Annual work programs shall include the following: (a) a brief evaluation of the previous year's performance as compared to objectives and a comparison of results obtained and how they are related to the new program; (b) detailed investment and operating budgets; (c) a description of the program of activities including quantified implementation objectives, output perfor- mance and project impact indicators where appropriate; (d) staff- ing and training plans with a statement of specific objectives; (e) a financing plan; and (f) a procurement plan. Annual work programs shall be approved by the Minister responsible for agri- culture by October 31 of each year and shall be submitted to the Association for approval. - 20 - SCHEDULE 5 Procurement and Consultants' Services Section I. Procurement of Goods and Works Part A. International Competitive Bidding Except as provided in Part B hereof, goods and works shall be procured under contracts awarded in accordance with procedures consistent with those set forth in Sections I and II of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1985 (the Guidelines). Part B. Other Procuarement Procedures 1. Contracts for the purchase of equipment, vehicles and agri- cultural inputs estimated to cost the equivalent of less than $100,000, as well as all contracts for civil works, may be procured under local competitive bidding procedures as described in paragraph 3.3 of the Guidelines. 2. Contracts for the purchase of equipment estimated to cost the equivalent of less than $50,000 may be procured on the bas s of the lowest of at least three competing Oquotations, as described in paragaph 3.4 of the Guidelines. 3. Contracts estimated at less than $1,000 equivalent may be negotiated directly with suppliers. Part C. Review by the Association of Procurement Decisions 1. With respect to each contract for civil works estimated to cost the equivalent of $100,000 or more and each contract for the purchase of goods estimated to cost the equivalent of $50,000 or 9 more, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract required to be furnished to the Association pursuant to said paragraph 2 (d) shall be furnished to the Association prior to the making of the first payment out of the Special Account in respect of such contract. 2. With respect to each contract not governed by the preced- ing paragraph, the procedures set forth in paragraphs 3 and - 21 - 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract together with the other information required to be furnished to the Association pursuant to said paragraph 3 shall be furnished to the Association as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 3 to this Agreement. 3. The provisions of the preceding subparagraphs (a) and (b) shall not apply to contracts on account of which the Association has authorized withdrawals from the Credit Account or payment out of the Special Account on the basis of statements of expendi- ture. Such contracts shall be retained in accordance with Section 4.01 (c) (ii) of this Agreement. 4. The figure of 15% is hereby specified for purposes of para- graph 4 of Appendix 1 to the Guidelines. Section II. Employment of Consultants In carrying out of the Project, the Borrower shall employ consultants and experts, whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. 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 2 1 A day of 198 1. FOR SECRETARY L -