Conformed Copy - C1855 - Irrigation IV Project - Project Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 1855 SE Project Agreement (Irrigation IV Project) among INTERNATIONAL DEVELOPMENT ASSOCIATION and SOCIETE NATIONALE D'AMENAGEMENT ET D'EXPLOITATION DES TERRES DU DELTA DU FLEUVE SENEGAL ET DES VALLEES DU FLEUVE SENEGAL ET DE LA FALEME and CAISSE NATIONALE DE CREDIT AGRICOLE DU SENEGAL Dated May 5, 1988 CREDIT NUMBER 1855 SE PROJECT AGREEMENT AGREEMENT, dated May 5, 1988, between INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and SOCIETE NATIONALE D'AMENAGEMENT ET D'EXPLOITATION DES TERRES DU DELTA DU FLEUVE SENEGAL ET DES VALLEES DU FLEUVE SENEGAL ET DE LA FALEME (SAED) and CAISSE NATIONALE DE CREDIT AGRICOLE DU SENEGAL (CNCAS); WHEREAS (A) by the Development Credit Agreement of even date herewith between Republic of Senegal (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to twenty-six million two hundred thousand Special Drawing Rights (SDR 26,200,000) on the terms and conditions set forth in the Development Credit Agreement, but only on condition that SAED and CNCAS agree to undertake such obligations toward the Association as are set forth in this Agreement; (B) by a Grant Agreement to be entered into between Page 2 the Borrower and SAED, certain proceeds of Credit provided for under the Development Credit Agreement will be made available to SAED on the terms and conditions set forth in said Grant Agreement; (C) by a Subsidiary Loan Agreement to be entered into between the Borrower and CNCAS, certain proceeds of this Credit provided for under the Development Credit Agreement will be made available to CNCAS on the terms and conditions set forth in said Subsidiary Loan Agreement; and WHEREAS SAED and CNCAS, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, have agreed to undertake the obligations set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Unless the context otherwise requires, the several terms defined in the Development Credit Agreement, the Preamble to this Agreement and In the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. (a) SAED and CNCAS declare their commitment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement. To this end: (i) SAED shall carry out Parts A, B, D, E, and F of the Project; Part G in cooperation with ISRA; Part H in cooperation with DCSR; and Part I in cooperation with CREDO-SAHEL; and (ii) CNCAS shall carry out Part C of the Project, with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering, irrigation and rural development practices, and shall provide, or cause to be provided, 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, SAED shall, for the purpose of the execution of Part I of the Project, make the proceeds of the Credit allocated thereto available to CREDO-SAHEL, under a Subsidiary Grant Agreement acceptable to the Association. Section 2.02. 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 1 to this Agreement. Section 2.03. SAED and CNCAS shall carry out 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 insurance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition, respectively) in respect of the Project Agreement. Section 2.04. SAED and CNCAS shall duly perform all their obligations under the Grant Agreement and the Subsidiary Loan Agreement, respectively. Except as the Page 3 Association shall otherwise agree, SAED and CNCAS shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the Grant Agreement and the Subsidiary Loan Agreement, respectively, or any provision thereof. Section 2.05. For purpose of assisting CNCAS in carrying out Part C of the Project, SAED shall take all necessary measures to fulfill its obligations under the Protocol dated February 27, 1987, agreed upon between SAED and CNCAS. Section 2.06. SAED shall: (a) implement the staff reduction plan, provided in the Lettre de Mission in accordance with the timetable set forth in said Lettre de Mission; and (b) by June 30, 1988, prepare and submit to the Association for its comments an estimate of further staff reduction for the period June 30, 1990, through June 30, 1993. Section 2.07. SAED shall, promptly after double- cropping is available to farmers in the Project Area, charge for the water supplied to such farmers, a price equal to the operation and maintenance costs of SAED's Water Management Department on the basis of cost accounting principles generally accepted. Section 2.08. (a) SAED and CNCAS shall, not later than January I and June 30 in each year the Project is executed, exchange views jointly with the Association with regard to the progress of the Project, the performance of their obligations under this Agreement, the Grant Agreement, the Subsidiary Loan Agreement and the Lettre de Mission, and other matters relating to the purposes of the Credit. (b) SAED and CNCAS shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Credit, or the performance by SAED and CNCAS of their obligations under this Agreement,, the Grant Agreement, the Subsidiary Loan Agreement and the Lettre de Mission. Section 2.09. SAED shall: (a) not later than December 31, 1988 complete a draft plan for development of new irrigated land to be cultivated in the perimeters referred to in Part A of the Project and promptly furnish said plan to the Association for its comments; and (b) the plan parcellaire to be included in the draft plan referred to in paragraph (a) above shall be designed in accordance with economic and technical efficiency requirements generally followed in the irrigation field. Section 2.10. SAED shall, upon the Association's request, review periodically Its Investment program with the Association. To this end, SAED shall furnish to the Association, all information, including any feasibility study prepared for the carryIng out of any irrigation project, as the Association shall reasonably request. Section 2.11. CNCAS shall: (a) keep separate accounts and records for all short-term credit operations made by CNCAS pursuant to this Agreement; (b) not later than March 31 In each year, prepare a report in such detail as shall be reasonably requested by the Association on progress achieved in the implementation of the credit operations referred to in paragraph (a) above; (c) review said report with the Borrower and the Associa- tion not later than April 30 in each year; and (d) Page 4 promptly thereafter, implement all measures required by the Borrower in agreement with the Association as a result of the review mentioned in paragraph (c) above. Section 2.12. For any credit made by CNCAS pursuant to this Agreement, CNCAS shall apply the lending terms and conditions set forth in Schedule 2 to this Agreement. ARTICLE III Management and Operations of SAED and CNCAS Section 3.01. SAED and CNCAS shall carry on their operations and conduct their affairs in accordance with sound administrative, financial and rural development practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. Section 3.02. SAED and CNCAS shall at all times operate and maintain their plant, machinery, equipment and other property and, from time to time, promptly as needed, make all necessary repairs and renewals thereof, all in accordance with sound engineering, financial and rural development practices. Section 3.03. SAED and CNCAS shall take out and maintain with responsible insurers, or make other provision satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. ARTICLE IV Financial Covenants Section 4.01. (a) SAED and CNCAS shall maintain records and accounts adequate to reflect in accordance with sound accounting practices their operations and financial condition. (b) SAED and CNCAS shall: (i) have their records, accounts and financial statements (balance 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 six months after the end of each such year: (A) certified copies of their 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; and (iii) furnish to the Association such other information concerning said records, accounts and financial statements as well as the audit thereof, as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the Page 5 basis of statements of expenditure, SAED and CNCAS shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the completion of the audit for the Fiscal Year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association's representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to In paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and Internal controls involved In their preparation, can be relied upon to support the related withdrawals. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 5.02. (a) This Agreement and all obligations of the Association and of SAED and CNCAS thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) the date 20 years after the date of this Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify SAED and CNCAS of this event. Section 5.03. All the provisions of this Agreement shall continue In full force and effect notwithstanding any cancellation or suspension under the General Conditions. ARTICLE VI Miscellaneous Provisions Section 6.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when It shall be delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required Page 6 or permitted to be given or made at such party's address hereinafter specified or at such other address as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For SAED: Societe Nationale d'Amenagement et d'Exploitation des Terres du Delta de Fleuve Senegal et des Vallees du Fleuve Senegal et de la Faleme P.O. Box 74 St. Louis, Republique du Senegal Telex: 715 33-SG 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. INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Edward V. K. Jaycox Regional Vice President Africa SOCIETE NATIONALE D'AMENAGEMENT ET D'EXPLOITATION DES TERRES DU DELTA DU FLEUVE SENEGAL ET DES VALLEES DU FLEUVE SENEGAL ET DE LA FALEME By /s/ Falilou Kane Authorized Representative CAISSE NATIONALE DE CREDIT AGRICOLE DU SENEGAL By /s/ Falilou Kane Authorized Representative Page 7 SCHEDULE 1 Procurement and Consultants' Services Section I: Procurement of Goods and Works Part A: International Competitive Bidding 1. Except as provided in Part C hereof, 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: Preference for Domestic Contractors In the procurement of works in accordance with the procedures described in Part A.1 hereof, SAED may grant a margin of preference to domestic contractors in accordance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraph 5 of Appendix 2 thereto. Part C: Other Procurement Procedures 1. Contracts for civil works estimated to cost $100,000 equivalent or less may be awarded on the basis of competitive bidding advertised locally, in accordance with procedures satisfactory to the Association. 2. Maintenance works for the irrigation network may be carried out by force account. 3. Contracts for spare parts, materials and supplies estimated to cost: (a) more than $20,000 equivalent may be procured under contracts awarded on the basis of competitive bidding advertised locally, in accordance with procedures satisfactory to the Association; and (b) less than $20,000 equivalent may be procured by directly negotiated purchase. Part D: Review by the Association of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract estimated to cost the equivalent of $100,000 or 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 any of the Special Accounts, 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. (b) With respect to each contract not governed by the preceding paragraph, the procedures set forth in paragraphs 3 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of any of the Special Accounts, 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 Page 8 of the evidence to be furnished pursuant to paragraph 4 of Schedule 3 to the Development Credit Agreement. (c) 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 on the basis of statements of expenditure. Such contracts shall be retained in accordance with Section 4.01 (c) (ii) of this Agreement. 2. The figure of 20% is hereby specified for purposes of paragraph 4 of Appendix 1 to the Guidelines. Section II: Employment of Consultants In order to assist SAED in carrying out the Project, SAED shall employ agricultural, management, agro- economical, engineering, electricity, mechanical, auditing, accounting and computer programming consultants 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. SCHEDULE 2 Lending Term and Conditions CNCAS shall provide agricultural credit under the Project through its local network and in accordance with lending terms and conditions set forth in this Schedule. A. Purpose CNCAS shall make short-term credits (only to the extent that such operations are eligible for financing at the standard discount rate) to: (i) GIEs and to village sections for purchase of agricultural inputs services, and as advances before harvest; and (ii) suppliers of goods and services related to agricultural production. B. Eligibility In order to be eligible to receive a credit, credit applicants shall meet lending policies established by CNCAS in agreement with the Association and SAED. Such policies to include denial of future credits to all delinquent beneficiaries. C. Terms and Conditions 1. CNCAS shall charge an annual interest rate on each credit and shall request repayment as provided below: (a) interest at an annual fixed rate equal to at least the maximum interest rate authorized under the applicable general conditions issued by the Banque Centrale des Etats de l'Afrique de l'Quest (currently, the discount rate plus 5%); (b) repayment in equal installments over a period of up to 12 months. 2. Credit beneficiaries shall be required to provide at least five percent (5%) in cash of the total cost of goods or services to be financed under the credits. 3. CNCAS shall have the right: Page 9 (i) to suspend or terminate access by the borrowers to the use of the proceeds of the credits if the borrowers fail to perform any of their obligations under the respective agreements without any limitation to any legal proceedings that CNCAS may initiate to recover any non- performing credit; (ii) to require that the goods to be financed out of the proceeds of the credit be used exclusively to carry out the purposes of the Project; and (iii) to require free access by the representatives of CNCAS and of the Association to the facilities of credit beneficiaries to inspect the goods purchased with the proceeds of the credit and the farms on which they are used.