Conformed Copy - C2459 - Rural Finance Technical Assistance Project - Project Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2459 MAG Project Agreement (Rural Finance Technical Assistance Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and ASSOCIATION DE DEVELOPPEMENT DU MOUVEMENT MUTUALISTE D'EPARGNE ET DE CREDIT Dated May 14, 1993 CREDIT NUMBER 2459 MAG PROJECT AGREEMENT AGREEMENT, dated May 14, 1993, between INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and ASSOCIATION DE DEVELOPPEMENT DU MOUVEMENT MUTUALISTE D'EPARGNE ET DE CREDIT (ADMMEC). WHEREAS (A) by the Development Credit Agreement of even date herewith between Republic of Madagascar (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to two million seven hundred thousand Special Drawing Rights (SDR 2,700,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that ADMMEC agree to undertake such obligations toward the Association as are set forth in this Agreement; (B) by a subsidiary credit agreement to be entered into between the Borrower and ADMMEC, the proceeds of the Credit provided for under the Development Credit Agreement will be made available to ADMMEC on the terms and conditions set forth in said Subsidiary Credit Agreement; and Page 2 WHEREAS ADMMEC, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has 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 and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. ADMMEC declares its commitment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement and, to this end, in accordance with the Borrower's Rural Finance Development Strategy, shall carry out the Project with due diligence and efficiency and in conformity with appropriate administrative, financial and rural finance practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the Project. Section 2.02. (a) For the purposes of the execution of the Project, following review and approval by the Steering Committee, ADMMEC shall, beginning June 30, 1993 and thereafter not later than September 30 of each year, furnish to the Association, for its review and approval, in respect of the forthcoming year, detailed work programs and budgets. (b) ADMMEC shall select the areas where savings and loan promotion schemes are to be carried out under Part A (a) of the Project, subject to the approval of the Borrower and the Association and in accordance with criteria acceptable to the Association, including: (i) economic potential, notably liquidity, investment profitability and access to markets; (ii) social potential, in terms of cooperative tradition; and (iii) institutional base, particularly the existence of farmers' associations and support organizations. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods 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 the Schedule to this Agreement. Section 2.04. ADMMEC 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 2.05. ADMMEC shall duly perform all its obligations under the Subsidiary Credit Agreement. Except as the Association shall otherwise agree, ADMMEC shall not take or concur in any action which would have the effect of amending, abrogating, assigning or waiving the Subsidiary Credit Agreement or any provision thereof. Section 2.06. (a) ADMMEC shall, at the request of the Association, exchange views with the Association with regard to the progress of the Project, the performance of its obligations under this Agreement and under the Subsidiary Credit Agreement, and other matters relating to the purposes of the Credit. (b) ADMMEC 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 ADMMEC of its obligations under this Page 3 Agreement and under the Subsidiary Credit Agreement. Section 2.07. Without limitation upon the provisions of Section 2.06 of this Agreement, ADMMEC shall: (a) prepare and furnish the report referred to in Section 3.04 of the Development Credit Agreement in accordance with the provisions of said Section; and (b) participate in the midterm review of the Project provided for under said Section and soon thereafter implement the recommendations of such a review within its competence. ARTICLE III Management and Operations of ADMMEC Section 3.01. ADMMEC shall carry on its operations and conduct its affairs in accordance with sound administrative, financial and rural finance practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers, including an accountant, a senior executive with monitoring and evaluation experience, a senior executive with project management experience, with terms of employment satisfactory to the Association, and a rural finance specialist employed in accordance with the provisions of Section II of the Schedule to this Agreement. Section 3.02. ADMMEC shall at all times operate and maintain its vehicles, 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 and financial practices. Section 3.03. ADMMEC 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) ADMMEC shall maintain records and accounts adequate to reflect, in accordance with sound accounting practices, its operations and financial condition. (b) ADMMEC shall: (i) have its 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 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; 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. ARTICLE V Page 4 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 ADMMEC 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 fifteen 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 ADMMEC 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 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 248423 (RCA) Washington, D.C. 82987 (FTCC) 64145 (WUI) or 197688 (TRT) For ADMMEC: ADMMEC c/o MINAGRI Antananarivo Madagascar Cable address: Telex: ADMMEC 22508 Antananarivo Section 6.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of ADMMEC, or by ADMMEC on behalf of the Borrower under the Development Credit Agreement, may be taken or executed by the Director of ADMMEC or such other person or persons Page 5 as the Director of ADMMEC shall designate in writing, and ADMMEC shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 6.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. 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/ Francisco Aguirre-Sacasa Acting Regional Vice President Africa ASSOCIATION DE DEVELOPPEMENT DU MOUVEMENT MUTUALISTE D'EPARGNE ET DE CREDIT By /s/ Pierrot Rajaonarivelo Authorized Representative SCHEDULE Procurement and Consultants' Services Section I: Procurement of Goods Part A: International Competitive Bidding 1. Except as provided in Part C hereof, goods 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 1992 (the Guidelines). For fixed-price contracts, the invitation to bid referred to in paragraph 2.13 of the Guidelines shall provide that, when contract award is delayed beyond the original bid validity period, the successful bidder's bid price will be increased for each week of delay by two predisclosed correction factors acceptable to the Association, one to be applied to all foreign currency components and the other to the local currency component of the bid price. Such an increase shall not be taken into account in the bid evaluation. 2. To the extent practicable, contracts for goods shall be grouped into bid packages estimated to cost the equivalent of $100,000 or more. Part B: Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A.1 hereof, goods manufactured in Madagascar may be granted a margin of preference in accordance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraphs 1 through 4 of Appendix 2 thereto. Part C: Other Procurement Procedures 1. Items or groups of items for goods estimated to cost the equivalent of $20,000 per contract or more, up to an aggregate Page 6 amount equivalent to $100,000, may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association, provided that the technical and financial bids are simultaneously opened in public. 2. Items or groups of items for goods estimated to cost less than the equivalent of $20,000 per contract, up to an aggregate amount equivalent to $160,000, may be procured under contracts awarded on the basis of comparison of price quotations obtained from at least three suppliers eligible under the Guidelines, in accordance with procedures acceptable to the Association. 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 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. (b) With respect to each contract not governed by the pre- ceding 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 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 the Development Credit Agreement. (c) The provisions of the preceding subparagraph (b) shall not apply to contracts on account of which withdrawals from the Credit Account are to be made on the basis of statements of expenditure. 2. The figure of 15% is hereby specified for purposes of paragraph 4 of Appendix 1 to the Guidelines. Section II: Employment of Consultants 1. In order to assist ADMMEC in carrying out the Project, ADMMEC shall employ 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 (the Consultant Guidelines). 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Association review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts shall not apply to contracts estimated to cost less than $50,000 equivalent each. However, this exception to prior Association review shall not apply to the terms of reference for such contracts nor to the employment of individuals, to single source selection of firms, to assignments of a critical nature as reasonably determined by the Association and to amendments of contracts raising the contract value to $50,000 equivalent or above. Page 7