Mali - Second Mopti Rice Project : Credit 0753 - Development Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 753 MLI Development Credit Agreement (Second Mopti Rice Project) between REPUBLIC OF MALI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated December 8, 1977 CREDIT NUMBER 753 MLI DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated December 8, 1977, between the REPUBLIC OF MALI (hereinafter called the Borrower) and INTERNATIONAL DEVEL- OPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) the Borrower has requested the Association to assist in the financing of the foreign exchange cost of the Project, described in Schedule 2 to this Agreement, by extending the Credit as hereinafter provided; (B) the Borrower intends to receive from the French Republic acting through its Fonds d'Aide et de Coopfration (hereinafter called FAC) a grant in an amount equivalent to $2,000,000 to assist in financing part 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 hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. 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 Agree- ments 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 and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Project Area" means the following polders: Dia, Bougoula, Diambakourou, Ibetemi, Karbaye, North Mopti, Sarantomo- Syn, Sofara, Soufouroulaye, South Mopti, Tenenkou, Saremala, Torokoro, Ouro-Nema and Tiroguel; - 2 - (b) "ORM" means Op&ation Riz Mopti, established within the Borrower's Ministry of Rural Development pursuant to Decree No. 34/PG-RM dated March 25, 1972; (c) "SCAER" means the Soci&t6 de Crdit Agricole et d'Equipement Rural established by Executive Decree of the Borrower dated April 14, 1971; and (d) "Special Account" means the account referred to in Section 2.02 of this Agreement. ARTICLE II The Credit Section 2.01. 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 equiva- lent to fifteen million dollars ($15,000,000). 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 and to be financed out of the proceeds of the Credit. (b) The Borrower shall, for the purposes of the Project, open the Special Account in the Banque de D6veloppement du Mali on terms and conditions satisfactory to the Association. Disburse- ments from the Special Account shall be made exclusively to finance the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit. (c) The Association shall, promptly after the Effective Date, withdraw on behalf of the Borrower from the Credit Account and deposit in the Special Account an initial amount in the cur- rency of the Borrower not exceeding $600,000 equivalent and shall thereafter, at the request of the Borrower, further withdraw from the Credit Account and deposit in the Special Account such amounts as shall be required to reimburse the Borrower for payments made out of the Special Account for expenditures for the Project eligi- ble for financing under the Development Credit Agreement, but only - 3 - to the extent that the amount of any such deposit, together with any amount on deposit in the Special Account as of the date of such request, shall not exceed in the aggregate the equivalent of $600,000. (d) The Borrower shall furnish to the Association in respect of each payment out of the Special Account such documents and other evidence as the Association shall reasonably request, show- ing that the payment was made as provided in paragraph (b) of this Section. (e) If the Association shall have determined that any pay- ment out of the Special Account (i) was made for any expenditure not eligible for financing out of the proceeds of the Credit or (ii) was not justified by the evidence furnished pursuant to paragraph (d) of this Section, the Borrower shall, promptly upon notice from the Association and prior to any further deposit in the Special Account by the Association, deposit in the Special Account an amount equal to the amount of such payment. (f) Notwithstanding the provisions of paragraph (c) of this Section, no further deposit in the Special Account shall be made when the Association shall have determined that all further with- drawals can be made under Section 5.03 of the General Conditions or when the total amount withdrawn from the Credit Account shall have reached the equivalent of $14,400,000, whichever shall be sooner. Withdrawal of the remaining amount of the Credit shall follow procedures agreed between the Borrower and the Association. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Credit, shall be governed by the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be November 30, 1983 or such later date as the Association shall establish. The Associa- tion 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 1%) 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 April 1 and October 1 in each year. -4- Section 2.07. The Borrower shall repay the prircipal amount of the Credit in semi-annual installments payable on each April 1 and October 1 commencing April 1, 1988, and ending October 1, 2027, each installment to and including the installment payable on October 1, 1997, to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.08. The currency of the French Republic is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. The Borrower shall carry out Part G of the Project and cause the ORM to carry out the other Parts thereof, with due diligence and efficiency and in conformity with appro- priate agricultural, engineering, economic and administrative practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. In order to assist the Borrower in carrying out the Project, the Borrower shall employ consultants and other experts whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. 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 in 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 Associa- tion, promptly upon their preparation, the plans, specifications, contract documents and work and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request, - 5 - (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 pro- ceeds of the Credit, and to disclose the use thereof in the Project; (ii) shall enable the Association's accredited represen- tatives 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. In the allocation of land in the Project Area, the Borrower shall ensure that (a) priority be given to farmers and that (b) no more than 2 ha of the new polders developed under the Project be allocated per active male family member. Section 3.06. The Borrower shall ensure that no new farm machinery be procured under the Project until the Association shall have been satisfied that existing machinery is being adequately utilized. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consis- tently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Project, of the ORM, SCAER and the other departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The accounts of the rice mill at S6vard shall be kept separate from those of the ORM and no resources of the ORM shall be used to cover any deficit of the mill. (c) The Borrower shall cause the ORM 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 six months after the end of each such year, -6- (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 the accounts and financial statements of the ORM and the audit thereof as the Association shall from time to time reasonably request. Section 4.02. The Borrower shall cause ORM 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 take such steps as shall be necessary to raise the capacity of the rice mills in the Project Area to accommodate the increased production. Section 4.04. The Borrower shall ensure that the producer price of paddy be adjusted from time to time as necessary to maintain farmers' incentives. Section 4.05. The Borrower shall maintain the scheduled prices (baremes) for the collection, bagging and transport of paddy, and the allowance for losses, at a level which will cover the costs to the ORM of such services. Section 4.06. The Borrower shall continue its current policy of progressively raising the development levy on paddy until a levy of 240 kg per ha is reached by the campaign of 1982-1983. Section 4.07. The cost of any subsidy granted to farmers for the purchase of agricultural equipment, fertilizers and insecti- cides under Part H of the Project shall be borne by the Borrower. 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, that, subject to subparagraph (iii) of this Section: -7- (i) The right of the Borrower to withdraw the proceeds of any grant or loan made to the Borrower for the financing of the Project shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing therefor, or (ii) Any such loan shall have become due and payable prior to the maturity provided in the agreement therefor. (iii) The foregoing shall not apply if the Borrower establishes to the satisfaction of the Association that: (A) such suspension, cancellation, termina- tion or prematuring is not caused by the failure of the Borrower to perform any of its obligations under such agreement and (B) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consistent with the obligations of the Borrower 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 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 Association has been notified by FAC that any condition precedent to the first utilization by the Borrower of funds from the participation of the French Republic in the Project has been fulfilled. (b) the Special Account has been opened. Section 6.02. The date March 15, 1978, is hereby specified for the purposes of Section.12.04 of the General Conditions. -8- Section 6.03. The obligations of the Borrower under Article IV of this Agreement and the provisions of Section 5.02 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date twenty years after the date of this Agreement, whichever shall be the earlier. ARTICLE VII Representatives of the Borrower; Addresses Section 7.01. 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. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Minist8re de Finances et du Commerce Koulouba Republic of Mali Cable address: Telex: MINIFINANCES 972559 Koulouba 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 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 MALI By /s/ Alpha Diaw Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Roger Chaufournier Regional Vice President Western Africa - 10 - 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: 90% (a) Polders, except 4,950,000 Ouro-N6ma and Tiroguel (b) Deep ploughing, 1,350,000 except polders of Ouro-N6ma, Tiroguel, Bou- goula and Saran- tomo-Syn II (c) Stores, work- 1,260,000 shops, offices, housing and training centers (2) Vehicles, ferries and 1,980,000 90% equipment for Part E of the Project (3) Management consultants' 1,260,000 90% services for ORM (4) Rural works department 900,000 90% for Part G of the Project (5) Engineering and 500,000 100% supervision - 11 - Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (6) Operating costs of ORM 700,000 15% including salaries (7) Agricultural credit 450,000 100% for Part H of the Project (8) Initial deposit in 600,000 Special Account (9) Unallocated 1,050,000 TOTAL 15,000,000 2. The disbursement percentages have been calculated in compli- ance with the policy of the Bank 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 Credit 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 Credit. 3. Notwithstanding the provisions of paragraph 1 above, no with- drawals shall be made in respect of payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an _ggregate amount not exceeding the equivalent of $70,000 may be made in respect of Category (4) on account of payments made for such expenditures before that date but after October 15, 1977. 4. 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 - 12 - 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 allo- cated to another Category and which in the opinion of the Asso- ciation 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 expen- ditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 5. 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 to in this Agreement, no expenditures for such item shall be financed out of the pro- ceeds 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 Asso- ciation's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financ- ing out of the proceeds of the Credit. .......... - 13 - SCHEDULE 2 Description of the Project The Project is the development of rice cultivation in the Project Area and strengthening of the ORM to benefit some 90,000 inhabitants. The Project includes the following Parts: Part A: construction of four new polders with a total area of about 8,800 ha, namely, Saremala, Torokoro, Ouro-N6ma and Tiroguel; Part B: improvements to the following polders: Mopti Nord, Mopti Sud, Soufouroulaye, Ib6t6mi, Sarantomo-Syn I, Dia-Tenenkou and Sofara; Part C: deep ploughing of the new polders included in Part A above and of the polders of Bougoula and Sarantomo-Syn II, as well as 10,200 ha of the polders included in the Project financed by the credit granted to the Borrower by the Association by agreement dated January 6, 1972; Part D: construction of storage facilities for paddy and for farm inputs and equipment; construction of workshops, offices, staff houses, and two training centers; Part E: procurement of farm machinery, maintenance equipment, vehicles, two ferries and workshop and office equipment; Part F: establishment and operation of an adult literacy program for villages, of a. training program for extension services and of a program of applied research; - 14 - Part G: expansion of the Offices of the Research Bureau of the Rural Works Department of the Ministry of Rural Development of the Borrower, including the procurement of equipment therefor, training of staff abroad through travel grants; carrying out studies for the preparation of future irrigation projects; and Part H: purchase of agricultural equipment, fertilizers and insec- ticides to be made available to farmers in the Project Area under a program of agricultural credits. The Project is expected to be completed by May 31, 1983. - 15 - SCHEDULE 3 Procurement A. International Competitive Bidding 1. Except as provided in Part B hereof, contracts for the pur- chase of goods or for civil works shall be procured in accordance with procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in March 1977 (hereinafter called the Guidelines), on the basis of international competitive bidding as described in Part A of the Guidelines. 2. Contracts shall be grouped so as to permit bulk procurement consistent with appropriate technical standards and procurement practices. B. Other Procurement Procedures 1. Contracts for the construction of houses, offices, work- shops and storage facilities, as well as for the purchase of items of equipment and furniture up to a contract value equiv- alent to $50,000, may be awarded following competitive bidding advertised locally. 2. Contracts of a value less than the equivalent of $20,000 may be awarded on the basis of quotations from local suppliers. C. Evaluation and Comparison of Bids for Goods; Preference for Domestic Manufacturers 1. For the purpose of evaluation and comparison of bids for the supply of goods except those to be procured in accordance with local procedures: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for imported goods, or the ex-factory price for domestically-manufactured goods; (ii) customs duties and other import taxes on imported goods, and sales and similar taxes on domestically-supplied goods, shall be excluded; and (iii) the cost to the Borrower of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be included. 2. Goods manufactured in Mali may be granted a margin of preference in accordance with, and subject to, the following provisions: - 16 - (a) All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the information required to establish the eligibility of a bid for such preference and the following methods and stages that will be followed in the evaluation and comparison of bids. (b) After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in Mali if the bidder shall have established to the satisfaction of the Borrower and the Association that the manufacturing cost of such goods includes a value added in Mali equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in Mali. (3) Group C: bids offering any other goods. (c) All evaluated bids in each group shall be first compared among themselves, excluding any customs duties and other import taxes on goods to be imported and any sales or similar taxes on goods to be supplied domestically, to determine the lowest evalu- ated bid of each group. Such lowest evaluated bids shall then be compared with each other, and if, as a result of this comparison, a bid from group A or group B is the lowest, it shall be selected for the award. (d) If, as a result of the comparison under paragraph (c) above, the lowest bid is a bid from group C, all group C bids shall be further compared with the lowest evaluated bid from group A after adding to the c.i.f. bid price of the imported goods offered in each group C bid, for the purpose of this further comparison only, an amount equal to (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in such group C bid; or (ii) 15% of the c.i.f. bid price of such goods if said customs duties and taxes exceed 15% of such price. If the group A bid in such further comparison is the lowest, it shall be selected for the award; if not, the bid from group C which as a result of the comparison under paragraph (c) is the lowest evaluated bid shall be selected. - 17 - D. Review of Frocurement Decisions by the Association 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts estimated to cost the equiva- lent of $50,000 or more: (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 said documents or procedures as the Assocition 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 shall furnish to the Associa- tion, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, and such other information as the Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsistent with the Guidelines or 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. (d) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to delivery to the Association of the first application for with- drawal of funds from the Credit Account in respect of such contract. 2. With respect to each contract to be financed out of the proceeds of the Credit and not governed by the preceding para- graph, the Borrower shall furnish to the Association, promptly after its execution and prior to delivery to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract, two conformed copies of such - 18 - contract, together with the analysis of the respective bids, recommendations for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination.