Conformed Copy - C1955 - National Research and Extension Project - Amendment 2

Page 1 January 15, 1993 H.E. Soriba Kaba Minister of Planning and Finance Ministry of Planning and Finance Conakry Guinea Re: Credit No. 1955 GUI (National Research and Extension Project) Amendment to the Development Credit Agreement Excellency, Please refer to the Development Credit Agreement (the Agreement), dated November 29, 1988, between the Republic of Guinea (the Borrower) and the International Development Association (the Association), as amended by letter of August 31, 1992. Pursuant to the request of the Minister of Agriculture and Animal Resources, dated September 11, 1992, we are pleased to inform you that the Association hereby agrees to amend as follows Sections 1.02 (a) and 2.02 (b) of the Agreement as well as Schedules 4 and 1 thereto. Section 1.02 (a) is revised to read as follows: Quote "Special Account" means any of the special deposit accounts referred to in Section 2.02 (b) of this Agreement; Unquote Section 2.02 (b) is revised to read as follows: Quote The Borrower shall for the purposes of Parts A, B, and C of the Project open and maintain in dollars special deposit accounts (hereinafter referred to as Special Account A, B, and C, respectively) in a commercial bank acceptable to the Association on terms and conditions satisfactory to the Association, including appropriate protection against set-off, seizure or attachment. Deposits into and payments out of the Special Account shall be make in accordance with the provisions of Schedule 4 to this Agreement. Unquote Schedule 4 is revised to read in its entirety as set out in Attachment 1 hereto. The table set forth in paragraph 1 of Schedule 1 is revised to read in its entirety as set out in Attachment 2 hereto. With the exception of the revision of Schedule 1, implementation of the amendments set out above is conditional on: (1) receipt by the Association of evidence satisfactory to it that either the current Special Account has been fully justified and closed or the balance refunded to the Association; and (2) receipt by the Association of evidence satisfactory to it that the ministerial tutelage over the agricultural cooperatives has been transferred from the Ministry of Interior and Security to the Ministry of Agriculture and Animal Resources. In addition, the Borrower designates the following officials as representatives of the Borrower for the purpose of Section 2.02 of the Agreement and Article V of the General Conditions: Page 2 (a) the Director of the Guinean Institute of Agronomic Research for Part A of the Project; (b) the Director of the National Agricultural Extension Project, of Part B of the Project; and (c) The Secretary General of the Ministry of Agriculture and Animal Resources, for Part C of the Project. This letter supersedes our letter of December 3, 1992, proposing an amendment to the Agreement. Please confirm your agreement with this amendment of the Agreement by signing, dating and returning the form of confirmation on the enclosed copy of this letter. This amendment shall become effective upon receipt by the Association of the duly signed copy. Sincerely yours, Director Occidental and Central Africa Department CONFIRMED: By Minister of Planning and Finance Date: 5 FEV. 1993 SCHEDULE 4 Special Accounts 1. For the purposes of this Schedule: (a) The term "Eligible Categories" means the following categories as set forth in the table in paragraph 1 of Schedule 1 to this Agreement: (i) Categories 1 (a), 2 (a), 3 (a), 4, 5 (a) and 6 for Special Account A; (ii) Categories 1 (b), 2 (b), 3 (b), 4, 5 (b) and 6 for Special Account B; and (iii)Categories 2 (c), 3 (c), 4 and 5 (c) for Special Account C; (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 accordance with the provisions of Schedule 1 to this Agreement; and (c) The term "Authorized Allocation" means: (i) for Special Account A an amount equivalent to US$200,000 to be withdrawn from the Credit Account and deposited into Special Account A; (ii) for Special Account B an amount equivalent to US$350,000 to be withdrawn from the Credit Account and deposited into Special Account B; and (iii) for Special Account C an amount equivalent to US$100,000 to be withdrawn from the Credit Account and deposited into Special Account C. All deposits into any Special Account shall be in accordance with paragraph 3 (a) of this Schedule. 2. Payments out of any Special Account shall be made exclusively for Eligible Expenditures from the Eligible Categories corresponding to such Special Account in accordance with the provisions of this Schedule. Page 3 3. After the Association has received evidence satisfactory to it that any Special Account has been duly opened, withdrawals of the Authorized Allocation corresponding to that Special Account and subsequent withdrawals to replenish such Special Account may be made as follows: (a) For withdrawals of the Authorized Allocation, the Borrower shall furnish to the Association a request or requests for a deposit or deposits which do not exceed the aggregate amount of the Authorized Allocation. On the basis of such request or requests the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the corresponding Special Account such amount or amounts as the Borrower shall have requested; and (b) (i) For replenishment of any Special Account, the Borrower shall furnish to the Association requests for deposits into such Special Account at such intervals as the Association shall specify. (ii) Prior to or at the time of each such request, the Borrower shall furnish to the Association the documents and other evidence required pursuant to paragraph 4 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Association shall withdraw from the Credit Account and deposit into the corresponding Special Account such amount as the Borrower shall have requested and as shall have been shown by said documents and other evidence to have been made out of such Special Account for Eligible Expenditures from Eligible Categories corresponding to that Special Account. All such deposits shall be withdrawn by the Association from the Credit Account under the respective Eligible Categories, and in the respective equivalent amounts, as shall have been justified by said documents and other evidence. 4. For each payment made by the Borrower out of any Special Account the Borrower shall, at such time as the Association shall reasonably request, furnish to the Association such documents and other evidence showing that such payment was made exclusively for Eligible Expenditures from Eligible Categories corresponding to such Special Account. 5. Notwithstanding the provisions of paragraph 3 of this Schedule, the Association shall not be required to make further deposits into any Special Account: (i) If, at any time, the Association shall have determined that all further withdrawals from the Eligible Categories corresponding to such Special Account should be made by the Borrower directly from the Credit Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or (ii) Once the total unwithdrawn amount of the Credit allocated to the Eligible Categories corresponding to such Special Account, less the amount of any outstanding special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions with respect to Eligible Expenditures under Eligible Categories corresponding to such Special Account, shall equal the equivalent of twice the amount of the corresponding Authorized Allocation. Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to the Eligible Categories corresponding to such Special Account shall follow such procedures as the Association shall specify by notice to the Page 4 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 such Special Account as of the date of such notice will be utilized in making payments for Eligible Expenditures from Eligible Categories corresponding to such Special Account. 6. (a) If the Association shall have determined at any time that any payment out of any Special Account: (i) was made for an expenditure or in an amount not eligible pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association: (A) provide such additional evidence as the Association may request; or (B) deposit into such 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. Unless the Association shall otherwise agree, no further deposit by the Association into such Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association shall have determined at any time that any amount outstanding in any Special Account will not be required to cover further payments for Eligible Expenditures from Eligible Categories corresponding to such Special Account, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount; (a) The Borrower may, upon notice to the Association and with the Association's consent, refund to the Association all or any portion of the funds on deposit in any Special Account; and (d) Refunds to the Association made pursuant to paragraph 6 (a) , (b) and (c) of this Schedule shall be credited to the Credit Account for cancellation or subsequent withdrawal as the Association may determine. 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) for Part A 690,000 100% (b) for Part B 770,000 100% 2. Vehicles and equipment: (a) for Parts A and E.1 1,230,000 100% (b) for Part B and E.2 1,770,000 100% Page 5 (c) for Part C 170,000 100% 3. Consultants' Services (a) for Part A 1,080,000 100% (b) for Part B 1,310,000 100% (c) for Part C 310,000 100% 4. Fellowships 770,000 100% 5. Operating Costs: (a) for Parts A and E-1 1,310,000 (b) for Parts B and E.2 2,240,000 90% (c) for Part C 150,000 6. Goods and services for Part D 690,000 100% 7. Refunding of Project Preparation Advance 468,000 Amount due pursuant to Section 2.02 (b) of this Agreement 8. Unallocated 1,242,000 TOTAL 14,200,000 The following are the percentages of expenditures to be financed for Categories 5 (a) and 5 (c): 90% in 1988 and 1989; 85% in 1990; 75% in 1991; 5O% in 1992; and 40% thereafter.