Senegal - Second Terres Neuves Resettlement Project : Credit 0578 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 578 SE Development Credit Agreement (Second Terres Neuves Resettlement Project) * BETWEEN REPUBLIC OF SENEGAL AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED AUGUST 6, 1975 CONFORMED COPY CREDIT NUMBER 578 SE Development Credit Agreement (Second Terres Neuves Resettlement Project) BETWEEN REPUBLIC OF SENEGAL AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED AUGUST 6, 1975 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated August 6, 1975, between the REPUBLIC OF SENEGAL (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). ARTICLE I General Conditions; Definitions Section 1.0 1. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agreements of the Association being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "STN" means the Societe des Terres Neuves, a public establishment of the Borrower created by Law No. 7 1-063 of November 30, 1971 and operating under Decree No. 72-44 of January 25, 1972; (b) "SODIFITEX" means the Societe' pour le Dcveloppement des Fibres Textiles, a corporation (Societe' anonyme d'Economie Mixte) organized and operating under the laws of the Borrower; and (c) "First Resettlement Project" means the project described in Schedule 2 of the Development Credit Agreement between the Borrower and the Association dated June 18, 1971 and "First Credit Agreement" means such Agreement. ARTICLE II The Credit Section 2.0 1. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equivalent to two million dollars ($2,000,000). Section 2.02. (a) Except as providled in paragraph (b) of this Section, the amount of the Credit may be withdrawn from the Credit Account in accordance 4 with the provisions of Schedule I to this Agreement, as such Schedule may be amended from time to time, for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) No withdrawals from the Credit Account shall be made on account of expenditures for consultants' services under Part 13(3) of the Project until the Borrower and the Association shall have agreed on a draft plan for the integrated agricultural development of Eastern Senegal and, in the case of' the health study under Part B(1) of the Project, until the Association shall have agreed on the terms of reference for such study. Section 2.03. Except as the Association shall otherwise agree, the goods, works and services (other than consultants' services) for the Project to be financed out of' the proceeds of the Credit, shall be pirocUired in accordance with the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be June 30, 1980 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of' such later date. 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 I';) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Service charges shall be payable semi-annually on May I and November I in each year. Section 2.07. The Borrower shall repay the principal amount of the Cedit in semi-annual installments payable on each May I and November 1 commencing November 1, 1985, and ending May 1, 2025, each installment to and including the installment payable on May 1, 1905 to be one-half of one per cent (1/2 of 1J) of such principal amount, and each installment thereafter to be one and one-half per cent (0-1/2') of such principal anmount. Section 2.08. The currency 01' the lrench Republic is heIreby specified for the purposes of Section 4.02 of the General Conditions. 5 ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall cause STN to carry out Part A of the Project and shall carry out Part B thereof through its Ministry of the Plan, with due diligence and efficiency and in conformity with appropriate administrative, financial, economic and technical practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Proceeds of the Credit allocated to the financing of Part A of the Project shall be made available by the Borrower to STN in the form of a grant. (c) In the carrying out of Part A(6) of the Project, STN shall utilize the extension services of SODEFITEX for an initial period of one year, under a contract containing terms and conditions satisfactory to the Borrower and the Association. Prior to the end of such period, the Borrower and the Association shall exchange views in order to agree on the arrangements necessary for the c.,rrying out of' such Part of the Project until the completion thereof. Section 3.02. In order to assist the Borrower in carrying out Part B of the Project, the Borrower shall emlploy consultants whose qUalifications, experience and terms and conditions of employment shall be satisfactory to the Association and shall promptly assign to work with such consultants qualified and experienced counterpart staff in adequate numbers. Section 3.03. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit against hazards incident to the acquisition, transportation and delivery thereof to the place of' Use or installation, and for such insurance any indemnity shall be payable iml a currency freely usable by the Borrower to replace or repair such goods. (b) Except as the Association shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the Project. Section 3.04. (a) The Borrower shall furnish to the Association, promptly upon their prepraration, the plans, specifications, contract documents and wodk and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) The Borrower: (i) shall maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Credit, and to disclose the use thereof in the Project; (ii) shall enable the Association's accredited representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish to the Association all such information as the Association shall reasonably request concerning the Project, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. Section 3.05. The Borrower shall take or cause to be taken all such action as shall be necessary to acquire as and when needed all such land or rights in respect of land as shall be required for carrying out the Project and shall furnish to the Association, promptly after such acquisition, evidence satisfactory to the Association that such land and rights in respect of land are available for purposes related to the Project. Section 3.06. The Borrower, in agreement with the Association, shall determine the specifications for the secondary roads to be constructed uinder Part A of the Project. Section 3.07. Within six months of the (late of this Agreenit, the Borrower shall furnish to the Association a detailed plan satisfactory to the Association for the annual surveys of the First Resettlement Project and of the present Project. Section 3.08. In carrying out the settlement program included in the roject, the Borrower shall cause STN to employ in Koumpentoum a project manager with experience and qualifications acceptable to the Association. Section 3.09. For the purposes Of carrying out Part A(5) of the Project, the Borrower shall cause the National Development Bank of Senegal (BNDS) to make available to STN the funds required for seasonal credits to settlers for fertilizers, seeds and insecticides and for medium-term credits for draft oxen and implements, such credits to bear interest at two percentage points above the discount rate of the Central Bank and be for terms of twelve months in the case of seasonal credits, and five years including one year's grace in the case of medium-term credits, which terms and conditions shall not be changed without prior consultation with the Association. Section 3.10. The credits accorded to farmers for mechanical land-clearing under Part A(4) of the Project shall be provided at a rate of interest two percentage points above the discount rate of the Central Bank and for terms from ten to fifteen years including periods of grace of up to three years. 7 ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall maintain and shall cause to be maintained by STN, records adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations, resources and expenditures, in respect of toe Project, of STN and of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall cause STN to: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with sound 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 four months after the end of each such year, (A) certified copies of its financial statements for such year as so audited and (B) the reports of such audits 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 accounts and Inancial statements of STN and the audit thereof as the Association shall from time to time reasonably request. Section 4.02. The Borrower shall cause STN to take out and maintain with responsible insurers, or to make other provision satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 4.03. The Borrower shall cause STN at all times: (a) to manage its affairs, maintain its financial position, plan its future expansion and carry on its operations, all in accordance with sound business, financial, agricultural and banking practices and under the supervision of experienced and competent management, assisted by qualified staff in adequate numbers; and (b) to operate and maintain its installations, equipment and other property, and promptly as required make all necessary repairs and renewals thereof, all in accordance with sound business and engineering practices. Section 4.04. The Borrower shall ensure that the roads and tracks constructed under Part A (2) of the Project be adequately maintained by its Ministry responsible for public works, 8 Section 4.05. During the first year of implementation of the Project, the Borrower and the Association shall exchange views on the details and the timing for the transfer from STN to cooperatives of credit and marketing responsibilities. Section 4.06. The Borrower shall take such steps as shall be necessary to remove from the land settled under the Project settlers who fail to carry out the terms of their contracts of settlement with STN. Section 4.07. The Borrower shall cause the classrooms constructed under Part A (2) of the Project to be adequately staffed and maintained by its Ministry of Education. ARTICLE V Remedies of the Association Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional event is specified pursuant to paragraph (h) thereof, namely, the legislation under which STN has been created, or any provision thereof, shall have been amended, suspended or abrogated in such a way as to prevent the Borrower from carrying out its obligations under this Agreement. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified pursuant to paragraph (d) thereof, namely, the event specified in Section 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01(b) of the General Conditions: (a) the agreement between STN and SODEFITEX referred to in paragraph (c) of Section 3.01 of this Agreement has been entered into; and (b) the Borrower shall have completed arrangements satisfactory to the Association for making available for use promptly when needed in carrying out the Project all funds required for the purpOse, such arrangements to include the establishment of a revolving fund in an adequate amount. 9 Section 6.02. The date October 15, 1975, is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.03. The obligations of the Borrower under Article IV of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date ten years after the date of this Agreement, whichever shall be the earlier. ARTICLE VII Representative of the Borrower; Addresses Section 7.0 1. The Minister of the Borrower at the time responsible for finance 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: Minist re des Finances Rue Charles LafnO Boite Postale 40 17 Dakar, Senegal Cable address: Minifinances Dakar For the Association: International Development Association 1618 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. 10 IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, 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 SENEGAL By /s / Andr6 Coulbary Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s I R. Chaufournier Regional Vice President Western Africa 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 Dollar Equivalent) to be Financed (1) Civil works 544,000 80% of local expenditures (2) Vehicles; land- 48,000 60% of local clearing tools expenditures, or if imported directly for the Project, 100% of foreign expenditures (3) Mechanical land I60,000 80% of local clearing expenditures (4) STN personnel 206,000 80% of local expendituLes (5) Extension 112,000 80! of local services expenditures (6) Consultants' ser- 284,000 100 of foreign vices other than expenditures or annual surveys 80% of local ex- penditures (7) Ministry of the 30,000 80( of local Plan costs, Part expenditures B of the Project, other than for the annual surveys (8) Annual surveys, 48,000 1004 of foreign Part B of the expenditures or Project 80/ of local ex- penditures (9) Unallocated 568,000 TOTAL 2,000,000 0 12 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower; provided, however, that if the currency of the Borrower is also that of another country from the territory of which goods or services are supplied, expenditures in such currency for such goods or services shall be deemed to be "foreign expenditures"; and (b) the term "local expenditures" means expenditures in the currency of the Borrower and for goods or services supplied from the territory of the Borrower. 3. The disbursement percentages have been calculated in compliance with the policy of the Association that no proceeds of the Credit shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof: to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Credit decreases or increases, the Association may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Association. 4. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of (a) expenditures prior to the date of this Agreement or (b) expenditures under Categories (4), (7) or (8) unless the Association shall have approved the salaries and allowances on account of which the withdrawal is requested. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph I above, if the Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Association may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to another Category and which in the opinion of the Association are not needed to meet other expenditures, and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred 13 to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as, in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. 14 SCHEDULE 2 Description of the Project The Project is the continuation of the Borrower's farm-settlement program in the Eastern Region to benefit about 600 additional families, and includes the following Parts: Part A (1) establishing nine villages for 450 settler families, and installing 150 families in existing villages; (2) constructing 8 settlement officer houses, 9 stores, 1 2 classrooms, 76 km of village access tracks, and 25 km of secondary roads; (3) constr :ting 9 wells for new villages and rehabilitating about 15 wells for existing villages accepting settlers; (4) providing settlers with tools and grants for manual land clearing, with credits for mechanical land clearing and with subsistence allowances; (5) providing settlers with seasonal and medium-term credit facilities for agricultural inputs; and (6) providing farm extension services to such settlers. Part B The preparation of a rural-sector master plan and of investment proposals for an integrated agricultural development project in Eastern Senegal. This Part would comprise: 1) preparing a draft master plan based on existing information on the region, annual surveys of the First Resettlement Project and of the present Project, and a health study; (2) establishing terms of reference for surveys and feasibility studies required to prepare investment proposals for an integrated agricultiral development project suitable for financing from exterffal sources; and (3) completing the master plan described in Part B( I ) above and carrying out the surveys and feasibility studies required to prepare the project described in B(2) above. The Project is expected to be completed by December 31, 1979. 15 SCHEDULE 3 Procurement A. General Procedures 1. Contracts for the construction of three wells under Part A(3) of the Project, estimated to cost in total the equivalent of about $100,000, shall be awarded following local advertisement for competitive bidding according to the Borrower's usual procedures, modified if necessary to provide for public opening of bids and for awards to the lowest evaluated bidder. 2. All other construction shall be carried out by the Borrower or by STN. 3. Vehicles and equipment shall be purchased on the basis of competitive quotations. B. Review of Procurement Decisions by Association 0 1. With respect to the contracts for the wells described in paragraph A.1 of this Schedule: (a) Before bids are invited, the Borrower shall furnish to the Association. for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the -aid documents or procedures as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform the Association of the name of the bidder to which it intends to award the contract and the reasons for the intended award and shall furnish to the Association, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, together with the recommendation for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsistent with this Schedule, promptly inform the Borrower and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked. 16 2. With respect to all contracts, two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract.