Rwanda - Mutara Agricultural And Livestock Development : Credit 0937 - Credit Agreement - Conformed

니 CREDIT NUMBER 937 RW DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated July 13, 1979, between REPUBLIC OF RWANDA (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) the Borrower has requested the Association to assist in the financing of the Project described in Schedu'Le 2 to this Agreement by extending the Credit as hereinafter provided; (B) the Office pour la Valorisation Pastorale et Agricole- du Mutara (hereinafter calied OVAPAM), a legal entity (organisme d1int6r9t public dote" de la pe,rsonnalite' civile) existing under the laws of the Borrower, will carry out Parts A, B and C of the Project with the Borrower's assistance and, as part of such assistance, the Borrower will make available to OVAPAM a portion of the proceeds of the Credit as hereinafter provided; (C) by letter dated May 22, 1979, from the Association to the Minister of Agriculture and Livestock of the Borrower, the Association has granted an advance to the Borrower totalling $500,000 for the preparation of the Project (hereinafter called the Project Preparation Advance); (D) pursuant to the terms of the aforesaid advance the aggregate amount thereof is to be refunded to the Association out of the proceeds of the Credit provided for in this Agreement; (E) the Borrower bas agreed to contract with International Development Association as Administrator of the Special Action Account established with funds contributed by the Member States of the European Economic Community 'hereinafter called the Adminis- trator) for a credit (hereinafter called the Special Action Credit) in an amount equivalent to about $1,650,000, to assist in financing Parts A, B and C of the Project on the terms and conditions set forth in an agreement (hereinafter called the Special Action Credit Agreement) between the Borrower and the Administrator; 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 and in the Project Agreement of even date herewith between the Association and OVAPAM; NOW THEREFORE the parties hereto hereby agree as follows: -2 - 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 Agreements of the Association being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise require, 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 Agreement" means the agreement between the Association, the Administrator and OVAPAM of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supplemental to the Project Agreement; (b) "Subsidiary Agreement" means the agreement to be entered into between the Borrower and OVAPAM pursuant to Sections 3.01 (b) of this Agreement and the Special Action Credit Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Agreement; (c) "RwF" means the currency of the Borrower; (d) "1973 Credit Agreement" means the Development Credit Agreement (Agricultural Development Project) (Credit Number 439 RW) (the so-called Mutara Agricultural Development Project - Phase 1) between the Borrower and the Association dated Novem- ber 29, 1973; (e) "1977 Credit Agreement" means the Development Credit Agreement (Bugesera and Gisaka/Migongo Project) (Credit Number 668 RW) between the B.orrower and the Association dated March 31, 1977; (f) "Project Area" means a territory of about 60,000 ha in the northwest portion of the Borrower's Prefecture of Byumba, -3- consisting of approximately 51,000 ha partially developed pursuant to the terms of the 1973 Credit Agreement plus the Ngarama and Kigasha administrative sectors in Ngarama Commune and the Karuma administrative sector in Muvumba Commune; (g) "Statuts" means the Borrower's Arrete Presidentiel No. 50/12 of March 4, 1974 establishing OVAPAM, as amended from time to time; (h) "MINAGRI" means the Borrower's Ministry of Agriculture and Livestock, or any successor thereto; (i) "Beneficiaries Committee" means the Committee estab- lished pursuant to Section 3.10 of this Agreement and Section 3.09 of the Special Action Credit Agreement; (j) "Marshland Development Project" means the Borrower's 1977 to 1980 project, developed with the assistance of the Cana- dian International Development Agency, potentially covering about 9,000 ha in the valleys of the Kagitumba and Muvumba rivers in the Borrower's Prefecture of Byumba; (k) "Revolving Fund Account" means the account to be estab- lished pursuant to Section 3.06 of this Agreement and Section 3.05 of the Special Action Credit Agreement; (1) "work plan" means a plan for carrying out a portion of Parts A, B or C of the Project, formulated pursuant to the provisions of Section 2.08 of the Project Agreement; (m) "SPD" means the Studies and Project Division of MINAGRI, or any successor thereto; (n) "Paysannat" means approximately 23,000 ha within the Project Area for settlement and crop and livestock development on parcels of about two ha each; (o) "Group Ranch" means an area of not less than 100 ha and not more than 1,500 ha within the Project Area for settlement and crop and livestock development by approximately 15 families; (p) "Beneficiary" means the head of a family who has entered into a contract with OVAPAM under Part A or Part B of the Project either on his own behalf or on behalf of himself and his immediate family; -4- (q) "local authorities" means the Pr'fet and Sous-pr fets of the Prefecture of Byumba and the Bourgmestres of the Communes of Ngarama and Muvumba; (r) "Project Director" means the expert appointed pursuant to Section 3.07 (a) (ii) of this Agreement and Section 3.06 (a) (ii) of the Special Action Credit Agreement; and (s) "Director for Finance and Administration" means the expert appointed pursuant to Section 3.07 (a) (iv) of this Agree- ment and Section 3.06 (a) (iv) of the Special Action Credit 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 eight million, seven hundred and fifty thousand dollars ($8,750,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Associa- tion, 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) As of the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and pay to itself the amount required to repay the principal amount of the Project Preparation Advance withdrawn and outstanding as of such date and to pay all unpaid charges thereon. Any unw. :hdrawn balance of the authorized amount of the Project Preparation Advance shall automatically be cancelled on the same date. Section 2.03. Except as the Association may 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. -5- Section 2.04. The Closing Date shall be December 31, 1983 or such later date as the Association may 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 semiannually on June 15 and December 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each June 15 and December 15 commencing December 15, 1989, and ending June 15, 2029, each installment to and including the installment payable on June 15, 1999, 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 United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.09. For the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions, the Project Director and the Director for Finance and Administration jointly, and any other persons authorized in writing by the Borrower, are designated as representatives of the Borrower. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall cause OVAPAM to carry out Parts A, B and C of the Project, with due diligence and efficiency and in conformity with appropriate agricultural, livestock, educational, health, financial and administrative practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Under a subsidiary agreement (the Subsidiary Agreement) to be entered into between the Borrower and OVAPAM under terms and conditions which shall have been agreed to by the Association and -6- the Administrator, the Borrower shall make available to OVAPAM on a grant basis: (i) the portion of the proceeds of the Credit allocated to expenditures required for the carrying out of Parts A, B and C of the Project, including the amounts allocated from time to time to Categories (1) through (6) (a) of the table set forth in paragraph 1 of Schedule 1 to the Development Credit Agreement; and (ii) the proceeds of the Special Action Credit. (c) Without any limitation or restriction upon any of its other obligations under the Development Credit Agreement and the Special Action Credit Agreement, the Borrower shall cause OVAPAM to perform in accordance with the provisions of the Project Agreement and the Subsidiary Agreement all the obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, staff, services and other resources, necessary or appropriate to enable OVAPAM to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (d) The Borrower shall exercise its rights under the Sub- sidiary Agreement in such manner as to protect the interests of the Borrower, the Association and the Administrator and to accomplish the purposes of the Credit, and except as the Associ- ation and the Administrator may otherwise agree, the Borrower shall not assign, amend, abrogate or waive the Subsidiary Agree- ment or any provision thereof. Section 3.02. The Borrower shall carry out Parts D (1) and D (2) of the Project with due diligence and efficiency and in conformity with appropriate agricultural, financial and administrative practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.03. (a) The Borrower shall furnish to the Associ- ation, promptly upon their preparation, the plans, specifications, reports, contract documents and procurement schedules for Part D of the Project, and any material modifications thereof or addi- tions thereto, in such detail as the Association shall reasonably request. (b) The Borrower shall: (i) maintain records and procedures adequate to record and monitor the progress of Part D of the Project (including its cost and the benefits to be derived from it), to identify the goods and services financed out of the -7- proceeds of the Credit with respect to Part D of the Project, and to disclose their use in the Project; (ii) enable the Associ- ation'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) furnish to the Association at regular intervals all such information as the Association shall reasonably request concerning the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditures of such proceeds and the goods, works and services financed out of such proceeds. (c) Promptly after completion of the Project, but in any event not later than six months after the Closing Date or such later date as may be agreed for this purpose between the Borrower and the Association, the Borrower shall cause SPD to prepare and furnish to the Association a report, of such scope and in such detail as the Association shall reasonably request, on the execution and initial operation of the Project, its cost and the benefits derived and to be derived from it, the performance by the Borrower and the Association of their respective obligations under the Development Credit Agreement and of the Association, the Administrator and OVAPAM of their respective obligations under the Project Agreement and the accomplishment of the purposes of the Credit. Section 3.04. By June 30, 1980 or such later date as may be acceptable to the Association, the Borrower shall cause SPD to prepare and furnish to the Association for its approval a Project monitoring and evaluation program. Section 3.05. By August 31, 1981 or such later date as may be acceptable to the Borrower, the Association and the Admini- strator, the Borrower, the Association and the Administrator shall, in accordance with terms of reference acceptable to each, jointly complete a mid-Project implementation review of all aspects of the Project. Section 3.06. For the purpose of assisting in carrying out Parts A, B and C of the Project, the Borrower shall: (a) cause OVAPAM to establish, maintain and manage an account (the Revolving Fund Account) in the Banque Nationale du Rwanda, under arrangements satisfactory to the Association and the Administrator; -8- (b) without any limitation on its obligations under Section 3.01 of this Agreement, deposit in the Revolving Fund Account, no later than each February 28, an amount equivalent to such portion of the payments reasonably estimated by OVAPAM to be made out of the Revolving Fund Account during the forthcoming fiscal year for expenditures under Parts A, B and C of the Project as shall not be reimbursable from the Credit Account or the Special Action Credit Account; (c) use the amounts on deposit in the Revolving Fund Account only to make payments for expenditures under Parts A, B and C of the Project which are eligible to be financed out of the proceeds of the Credit or the Special Action Credit; and (d) maintain the Revolving Fund Account at all times with not less than thirty million RwF (30,000,000 RwF). Section 3.07. (a) The Borrower shall appoint to the manage- ment and staff of OVAPAM the following experts each of whom shall meet such qualifications, experience and terms and condi- tions of employment (including terms of reference) as may be acceptable to the Association and the Administrator: (i) a Director of OVAPAM; (ii) a Project Director who shall be an agronomist/ extension specialist; (iii) two Sub-projects Directors to head the Paysannat and Group Ranch Sub-projects, manage the implemen- tation of Parts A and B of the Project, respec- tively, and coordinate with the local authorities such implementation; (iv) a Director for Finance and Administration; (v) a specialist in marketing; and (vi) a mechanic. (b) The Borrower shall consult with the Association and the Administrator prior to making any changes in the appointments of the experts mentioned in paragraph (a) of this Section. Section 3.08. Not later than 90 days after the date of effectiveness of this Agreement or such later date as may be 1 -9- acceptable to the Association and the Administrator, the Borrower, the Association and the Administrator shall review the performance of OVAPAM's financial, administrative and mechanical services and if, as a result, the Borrower, the Association or the Adminis- trator is of the view that any of such services require assis- tance, the Borrower shall appoint such internationally recruited expert or experts to assist OVAPAM as shall meet such qualifi- cations, experience and terms and conditions of employment as may be acceptable to the Association and the Administrator. Section 3.09. (a) For the purpose of coordinating and super- vising the general planning, implementation and evaluation of the Project, the Borrower shall appoint the following individuals as members of OVAPAM's Board of Directors: a senior official of MINAGRI, who shall act as Chairman of such Board; a senior official from each of the Borrower's Ministries of Finance, Planning, and Social Affairs and Cooperatives; a representative of the Banque Nationale du Rwanda; the Pr&fet of the Prefecture of Byumba; a representative of the Beneficiaries under Part A of the Project; and a representative of the Beneficiaries under Part B of the Project. (b) The Borrower shall ensure that the Director of OVAPAM, the Project Director, the Paysannat Sub-project Director, the Group Ranch Sub-project Director, and the Director of the Marsh- land Development Project have the right to receive notice of, attend, be consulted and be heard at all meetings of OVAPAM's Board of Directors. (c) The Borrower shall ensure: (i) that the composition of OVAPAM's Board of Directors is altered only after prior consul- tation with the Association and the Administrator; and (ii) that the name and occupation of each member of OVAPAM's Board of Directors and any changes thereof shall be promptly communicated to the Association and the Administrator. Section 3.10. (a) The Borrower shall establish and maintain a Beneficiaries Committee composed of the following individuals: the PrefeL of the Prefecture of Byumba who shall act as the Committee's Chairman; the Bourgmestres of Ngarama and Muvumba Communes; the Director of OVAPAM; the Project Director; the Paysannat Sub-project Director; the Group Ranch Sub-project Director; the Director of the Marshland Development Project or his deputy; a representative chosen by the Beneficiaries under Part A of the Project; and a representative chosen by the Beneficiaries under Part B of the Project. - 10 - (b) The Borrower shall ensure that: (i) the composition of the Beneficiaries Committee is not altered without prior consultation with the Association and the Administrator; (ii) the Beneficiaries Committee has exclusive jurisdiction to review and rule on all applications to OVAPAM by actual or potential Benefi- ciaries for plot allocation, Group Ranch allocation, and compen- sation and meets, at the request of its Chairman, at least once per month for this purpose; (iii) the Beneficiaries Committee reviews the compliance by each Beneficiary with his obligations set forth in his contract with OVAPAM under Part A or Part B of the Project and meets, at the request of its Chairman, at least once per quarter for this purpose; and (iv) the Beneficiaries Committee makes a full report of its activities to the Board of Directors of OVAPAM at least once per quarter. Section 3.11. The Borrower shall, on a monthly basis, submit to OVAPAM such accounts with respect to the expenditures under Part D of the Project as OVAPAM may reasonably request in order to permit prompt applications for disbursement by OVAPAM with respect to the above. Section 3.12. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the goods imported under Part D of the Project and to be financed out of the proceeds of the Credit against hazards incident to the acquisition, trans- portation and delivery thereof to the place of use or installa- tion, 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 may otherwise agree, the Borrower shall cause all goods and services under Part D of the Project and financed out of the proceeds of the Credit to be used exclusively for the Project. Section 3.13. 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 and rights in respect of land as shall be required for carrying out the Project. Section 3.14.. (a) In accordance with guidelines satisfactory to the Borrower, the Association and the Administrator, the Borrower shall finance and shall cause the local authorities and Beneficiaries to finance progressively the operating costs of the Project. - 11 - (b) By July 1, 1983 or such later date as may be acceptable to the Association and the Administrator, and thereafter, the Borrower shall ensure that all of the operating costs of the Project are fully financed. ARTICLE IV Financial Covenants Section 4.01. The Borrower shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition with respect to Part D of the Project. Section 4.02. The Borrower shall: (i) have its accounts and financial statements related to Part D of the Project for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors accep- table 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 year, (A) certified copies of the aforesaid financial statements for such year as so audited and (B) the report of such audit by said auditors, of such spope 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 with respect to Part D of the Project and the audit thereof as the Association shall from time to time reason- ably request. ARTICLE V Other Covenants Section 5.01. The Borrower shall cause the works and facili- ties included in the Project to be adequately maintained and shall cause all necessary repairs of such works and facilities to be made promptly, all in accordance with sound agricultural, engineeriug and administrative practices, and shall provide, or cause to be provided, 'romptly as needed, the funds, services, facilities and other resoirces required for such purpose. Section 5.02. (a) Before starting any work or assuming any commitment or entering into any arrangement with respect to the Marshland Development Project or any other project which would affect the Project Area, the Borrower shall exchange views with AY -12- the Association and the Administrator concerning the consequences that such works or development could have on the carrying out of the Project and the benefits to be derived therefrom. (b) The Borrower shall ensure that the Marshland Development Project and any other projects which may affect the Project Area have a staff separate from that of OVAPAM's staff for purposes of the Project and that the Directors of the Marshland Development Project and such other projects report not less than once per quarter to OVAPAM's Board of Directors on the implementation of their projects. Section 5.03. The Borrower shall prepare and furnish to the Association for its review a national agricultural credit study. Section 5.04. The Borrower shall take and cause to be taken all necessary measures as shall be required to enable OVAPAM to comply with all of its obligations pursuant to the Project Agreement and shall not take or permit to be taken any action which would prevent or interfere with such performance. ARTICLE VI Remedies of the Association Section 6.01. For the purposes of Section 6.02 of the General Conditions the following additional events are specified pursuant to paragraph (h) thereof: (a) OVAPAM shall have failed to perform any covenant, agreement or obligation of OVAPAM set forth in the Project Agree- ment; (b) an extraordinary situation shall have arisen which shall make it improbable that OVAPAM will be able to perform its obligations set forth in the Project Agreement; (c) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or liquidation of OVAPAM or for the suspension of its operations; (d) the Statuts shall have been amended, suspended, abro- gated, repealed, waived, or shall cease to be enforced, so as to affect materially and adversely the carrying out by OVAPAM of its covenants, agreements and obligations set forth in the Project Agreement or in the Subsidiary Agreement; - 13 - (e) OVAPAM shall have failed to perform any covenant, agreement or obligation of OVAPAM set forth in the Subsidiary Agreement; (f) the Borrower shall have failed to perform any of its covenants, agreements or obligations set forth in the Special Action Credit Agreement; and (g) (i) Subject to subparagraph (ii) of this paragraph: The right of the Borrower to withdraw the proceeds of the Special Action Credit shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the Special Action Credit Agreement. (ii) Subparagraph (i) of this paragraph shall not apply if: (A) such suspension, cancellation or termination is not caused by the failure of the Borrower to perform any of its obligations set forth in the Special Action Credit 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 6.02-. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (d) thereof: (a) any event specified in paragraphs (a), (c) or (e) of Section 6.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Association to the Borrower and OVAPAM; (b) any event specified in paragraphs (f) and (g) (i) of Section 6.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Association to the Borrower; and (c) any event specified in paragraph (d) of Section 6.01 of this Agreement shall occur. ARTICLE VII Effective Date; Termination Section 7.01. The following events are specified as addi- tional conditions to the effectiveness of the Development Credit j .~-A -14- Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the accounts and financial statements with respect to the project described in Schedule 2 to the 1973 Credit Agree- ment have been audited by an auditor acceptable to the Association and certified copies of such accounts and financial statements as so audited and the report of such audit by said auditors have been furnished to the Association; (b) the Beneficiaries Committee and its terms of reference have been duly established; (c) the Special Action Credit Agreement has been duly signed on behalf of the parties thereto and all conditions prece- dent to the effectiveness of the Special Action Credit Agreement, except for the effectiveness of the Development Credit Agreement, have been fulfilled; (d) the Project Director, the Director for Finance and Administration and the specialist in marketing have been recruited by the Borrower pursuant to Section 3.07 (a) of this Agreement and Section 3.06 (a) of the Special Action Credit Agreement; (e) the Statute are amended so as to permit OVAPAM not to be self-financing until completion of the Project and to require that OVAPAM's head office be at Nyagatare; (f) the first work plan has been furnished to the Associa- tion and is acceptable to it; (g) the Revolving Fund Account has been established in accordance with Section 3.06 of this Agreement and Section 3.05 of the Special Action Credit Agreement and the Borrower has deposited therein an amount in RwF equivalent to $250,000; and (h) the execution of the Subsidiary Agreement on behalf of the Borrower and OVAPAM, respectively, has occurred. Section 7.02. The following are specified as additional matters, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association: - 15 - (a) that the execution of the Project Agreement has been duly authorized or ratified by OVAPAM, and the Project Agreement is legally binding upon OVAPAM in accordance with its terms; and (b) that the execution of the Subsidiary Agreement has been duly authorized or ratified by the Borrower and OVAPAM, and the Subsidiary Agreement is legally binding upon the Borrower and OVAPAM in accordance with its terms. Section 7.03. The date October 15, 1979, is hereby specified for the purposes of Section 12.04 of the General Conditions Section 7.04. The obligations of the Borrower under Article IV and Sections 5.02 and 5.03 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date twenty-five years after the date of this Agreement, whichever shall be the earlier. ARTICLE VIII Representative of the Borrower; Addresses Section 8.01. Subject to the provisions of Section 2.09 of this Agreement, the Minister of the Borrower at the time respon- sible for finance is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 8.02. The following addresses are specified for the purpose of Section 11.01 of the General Conditions: For the Borrower: Ministere des Finances Botte Postale 158 Kigali Republique Rwandaise Cable address: Telex: MINIFIN CABPUB 04 Kigali ~---~-64 - 16 - 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 RWANDA By /s/ Bonaventure Ubalijoro Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Andre R. Gue Acting Regional Vice President Eastern Africa A - 17 - 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) Equipment, mate- 770,000 100% of foreign rials, vehicles, expenditures and veterinary chemi- 95% of local ex- cals and medicines penditures and seeds under Parts A, B, C and D (2) of the Project (2) Civil works and 370,000 100% of foreign infrastructure expenditures and development (and 85% of local ex- related materials) penditures under Parts A, B, C (3) and C (4) (a) of the Project (3) Staff salaries 1,785,000 85% and other operat- ing costs under Parts A, B and C of the Project (4) Agricaltural 100,000 70% of local ex- credit fund penditures (5) Water supply devel- opment and con- struction under Part C (2) of the Project: - 18 - Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (a) well deve- 1,450,000 100% of foreign lopment expenditures and 95% of local expenditures (b) gravity systems 520,000 100% of foreign expenditures and 95% of local expenditures (6) Technical services: (a) under Part C (3) 1,025,000 100% of foreign of the Project expenditures and 95% of local expenditures (b) under Part D (1) 780,000 100% of foreign of the Project expenditures and 95% of local ex- penditures (c) under Part D (2) 270,000 100% of foreign of the Project expenditures and 95% of local expenditures (7) Refunding of 500,000 100% of amount Project outstanding at Preparation Effective Date Advance (8) Unallocated 1,180,000 TOTAL 8,750,000 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 - 19 - goods or services supplied from the territory of any country other than the Borrower; 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 com- pliance 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 1 above, no withdrawals shall be made in respect of payments made for expendi- tures: (a) prior to the date of this Agreement; (b) in respect of Category (4) until the national agricultural credit study referred to in Section 5.03 of this Agreement has been furnished to the Association and the agricultural credit program's lending terms and processing procedures have been approved by the Associa- tion; and (c) in respect of Category (5) (b) until evidence satisfactory to the Association shall have been furnished to the Association that the gravity systems in question are technically and financially justifiable. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in para- graph 1 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 expen- ditures, 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. ..................................... -20- 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 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 Associ- ation's reasonable opinion, represents the amount of such expen- ditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 21 - SCHEDULE 2 Description of the Project The Project comprises the second phase (1979-1983) of the Borrower's 1974 to 1984 development program for the Mutara region. Its major objettives are to develop techniques, procedures and an institutional environment which will help ensure that: (i) the production potential of the Project Area is preserved; (ii) the use of available resources is intensified; (iii) its orientation and that of other related projects is improved as experience is gained; and (iv) it is integrated into the local administra- tion. The Project consists of two distinct Sub-projects as well as of components common to both, plus other components of a more general nature, as follows: Part A: Paysannat Sub-project The development of improved extension services for crops and livestock in the Paysannat covering about 23,000 ha and in the adjacent administrative sectors of Karama, Ngarama and Kigasha in the Muvumba and Ngarama Communes, including crop development, the introduction of a livestock stall-feeding program, and staff and farmer training. Part B: Group Ranch Sub-project (1) The development of improved extension and veteri- nary services for livestock and crops on about 63 Group Ranches covering a total of about 28,000 ha, including a pasture improvement program, an improved veterinary and animal husbandry program, technical support for cultivation plots, and staff and pastoralist training. (2) The development of a technical support center for fodder multiplication and trials, for reproduction of improved cattle breeds and for improved mar- keting. Part C: Common Components (1) The development of marketing services, including a preliminary marketing study with respect to crops and livestock. pr--I - 22 - (2) The construction of a water supply system adequate for both human and livestock requirements within the Project Area. (3) The provision of technical services to assist in: (a) managing the Project; (b) maintaining the main access roads within the Project Area; (c) establishing an agricultural credit program; (d) OVAPAM staff training; and (e) advising op. technical aspects of Parts A, B, C (1) and C (2) of the Project. (4) Construction, equipping and staffing within the Project Area of: (a) about seven primary schools; and (b) two health centers. Part D: (1) Provision to OVAPAM by the Borrower of the ser- vices of two technicians, namely, an agronomist/ extension specialist who shall be the Project Director and a marketing specialist. (2) The carrying out by SPD of: (a) Project monitoring and evaluation; and (b) ad hoc studies as may be required for Project implementation and the preparation of further related agricultural and livestock projects. The Project is expected to be completed by June 30, 1983. - 23 - SCHEDULE 3 Procurement A. International Competitive Bidding 1. Except as provided in Part D hereof, goods and civil works to be financed out of the proceeds of the Credit shall be procured under contracts awarded in accordance with procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the International Bank for Reconstruction and Development in March 1977 (hereinafter called the Guidelines), on the basis of international competitive bidding as described in Part A of the Guidelines. 2. For goods and works to be procured on the basis of inter- national competitive bidding, in addition to the requirements of paragraph 1.2 of the Guidelines, OVAPAM shall prepare and forward to the Association as soon as possible, and in any event not later than 60 days prior to the date of availability to the public of the first tender or prequalification documents relating thereto, as the case may be, a general procurement notice, in such form and detail and containing such information as the Association shall reasonably request; the Association will arrange for the publica- tion of such notice in order to provide timely notification to prospective bidders of the opportunity to bid for the goods and works in question. OVAPAM shall provide the necessary information to update such notice annually so long as any goods or works remain to be procured on the basis of international competitive bidding. 3. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of international competitive bidding: (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 OVAPAM of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be included. B. Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A of this Schedule, goods manufactured in A # -24- the territory of the Borrower may be granted a margin of prefe- rence in accordance with, and subject to, the following provi- sions: 1. 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. 2. After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in the territory of the Borrower if the bidder shall have established to the satisfaction of the Bor- rower and the Association that the manufacturing cost of such goods includes a value added in the territory of the Borrower equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in the territory of the Borrower. (3) Group C: bids offering any other goods. 3. 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 evaluated 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. 4. If, as a result of the comparison under paragraph 3 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 - 25 - 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 3 is the lowest evaluated bid shall be selected. C. Preference for Domestic Contractors With respect to the evaluation of bids for any contract for civil works included under Category (2) of the table set forth in Schedule 1 to the Development Credit Agreement and to be pro- cured in accordance with the procedures described in Part A of this Schedule, OVAPAM may grant a margin of preference of 7-1/2% to domestic contractors, in accordance with, and subject to, the following provisions: 1. Contractors applying for such preference shall be asked to provide, as part of the data for qualification, such informa- tion, including details of ownership, as shall be required to determine whether, according to the classification established by OVAPAM and accepted by the Association, a particular firm or group of firms qualifies for a domestic preference. The bidding docu- ments shall clearly indicate the preference and the method that will be followed in the evaluation and comparison of bids to give effect to such preference. 2. After bids have been received and reviewed by OVAPAM, responsive bids will be classified into the following groups: (i) bids offered by domestic contractors eligible for preference; and (ii) bids offered by other contractors. For the purpose of evaluation and comparison of bids an amount equal to 7-1/2% of the bid amount shall be added to bids received under group (ii) above. D. Other Procurement Procedures 1. Contracts for the purchase of vehicles, equipment and sup- plies estimated to cost less than the equivalent of $50,000 each may be awarded on the basis of price quotations from all suppliers represented in the territory of the Borrower who offer adequate guarantees of service and supply of parts and in accor- dance with the Borrower's applicable procurement procedures; -V - 26 - provided, however, that the aggregate amount of all contracts so awarded shall not exceed the equivalent of $350,000. 2. Contracts for the purchase of veterinary products, breeding material and seeds may be procured on the basis of international shopping or international advertisement and in accordance with procedures acceptable to the Association. 3. Civil works for housing, offices, and schools may be carried out (a) by force account; (b) pursuant to contracts awarded on the basis of competitive bidding advertised locally in accordance with procedures satisfactory to the Association; or (c) on the basis of physical and manpower resources supplied by Beneficiaries. E. Review of Procurement 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 and all contracts for any part of the water supply system under Part C (2) of the Project: (a) Before bids are invited, OVAPAM 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 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, OVAPAM 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 Association, in sufficient time for its review, a detailed report on the evalua- tion and comparison of the bids received, and such other informa- tion as the Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsis- tent with the Guidelines or this Schedule, promptly inform OVAPAM and state the reasons for such determination. - 27 - (c) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked or prequalification invited. (d) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the delivery to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract. 2. With respect to each contract not governed by the preceding paragraph, OVAPAM shall furnish to the Association, promptly after its execution and prior to the 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 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 OVAPAM and state the reasons for such determination.