Somali - AGR Extension & Farm Management Training : Credit 0905 - Credit Agreement - Conformed

OFFICIAL DOCUMFYLTS CREDIT NUMER 905 50 Development Credit Agreement (Agricultural Extension and Farm Management Tråining Project) betveen SOMALI DEMOCRATIC REPUBLIC and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated 2 , 1979 -mnmemmý CREDIT NUMBER 905 SO DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated U, 1979, between SOMALI DEMOCRATIC REPUBLIC (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 Schedule 2 to this Agreement by extending the Credit as hereinafter pro- vided; (B) the Borrower intends to contract from,the Agency for International Development of the United States a grant (herein- after called the USAID Grant) in an amount of seven million six hundred thousand dollars ($7,600,000) to assist in financing part of the Project on the terms and conditions set forth in an agree- ment (hereinafter called the USAID Grant Agreement) to be entered into between the Borrower and USAID; (C) the Borriwer intends to contract from the African Development Fund a loan (hereinafter called ADF Loan) in an amount equivalent to eight million nine hundred thousand dollars ($8,900,000) *to assist in financing part of the Project on terms and conditions set forth in an agreement (hereinafter called the ADF Loan Agreement) to be entered into between the Borrower and the African Development Fund; (D) the Borrower intends to contract from the Special Action Account established by the European Economic Community (EEC) a Special Action Credit (hereinafter called the EEC Special Action Credit) in an amount equivalent to one million five hundred thousand dollars ($1,500,000) to assist in financing part of the Project on terms and conditions set forth in an agreement (herein- after called the EEC Special Action Credit Agreement) to be entered into between the Borrower and the International Develop- ment Association as Administrator of the Special Action Account; 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: -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 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 ir, the Preamble to this Agreement have the respective meanings therein set forth. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower,. on the terms and c6nditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equiv- alent to ten million five hundred thousand dollars ($10,500,000). Section 2.02. 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 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. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works required for the Project shall be governed by the provisions of the Schedule 3 to this Agreement. Sectio 2.04. The Closing Date shall be June 30, 1985 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. -3- 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 cn the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Service charges shall be payable semiannually on January 15 and July 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each January 15 and July 15 commencing July 15, 1989, and ending January 15, 2029, each installment to and including the install- ment payable on January 15, 1999, to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment there- after 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. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out the Project through its Ministry of Agriculture with due diligence and effi- ciency and in conformity with appropriate administrative, finan- cial, engineering and agricultural practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) In order to assist the Borrower in the overall imple- mentation of the Project, the Borrower shall establish and there- after maintain a Project Management Unit consisting of a Project Director, a Project Technical Manager and a Financial Controller whose qualifications, experience and terms and conditions of employment shall be acceptable to the Association, as well as support staff to be responsible for the overall Project implemen- tation. Section 3.02. Without any limitation or restriction on the obligation of the Borrower under Section 3.01 (a) above, the Borrower shall establish a Project Account, deposit in said account an initial amount of not less than three million Somali -4- Shillings to be increased to five million Somali Shillings by the end of the first year of Project execution, and thereafter maintain and replenish said account to meet payments required for the Project. Section 3.03. In order to assist the Borrower in the prepara- tion of bidding documents for the Project, the procurement of goods and services financed under the Project, supervision of the execution of civil works and the preparation of a follow-up Project, the Borrower shall employ agricultural, engineering and procurement consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Associa- tion. Section 3.04. In carrying out Part B of the Project, the Borrower shall establish a Technical Coordination Committee within its Ministry of Agriculture headed by the Director General of Agriculture and consisting of the Project Director, Department Directors of the Ministry of Agriculture and representatives of marketing credit and other agrirultural servicing institutions. Section 3.05. In carrying out Part D of the Project, the Borrower shall: (i) consult with the Association on the nature and content of sample surveys undertaken; and (ii) ensure that the results of such surveys and analysis shall be furnished to the Association. Section 3.06. In carrying out Part E of the Project, the Borrower shall take all necessary measures to appoint the teaching staff not later than August 31, 1979. Section 3..07. In carrying out Part F of the Project, the Borrower shall, by not later than March 31, 1980, prepare and furnish to the Association for its approval, a training program for its staff. Section 3.08. In carrying out Part G of the Project, the Borrower shall furnish its terms of reference to the Association for its approval and shall by not later than September 30, 1980, furnish the study report to the Association for its review. Section 3.09. In carrying out Part H of the Project, the Borrower shall employ a team of four statisticians whose quali- fications, experience and terms of reference shall be acceptable to the Association. s1_4 -5- Section 3.10. (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, all goods and services financed out of the proceeds of the Credit shall be used exclusively for the Project until its completion. Section 3.11. (a) The Borrower shall furnish to the Associa- tion, promptly upon their preparation, the plans, specifications, reports, contract documents and construction 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 and procedures adequate to record and monitor the progress of the Project (including its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Credit, and to disclose their use 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 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 expenditure of the proceeds of the Credit and the goods 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 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 the accomplishment of the purposes of the Credit. Section 3.12. 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 and shall furnish to the Association, promptly after such acquisition, evidence satis- factory to the Association that such land and rights in respect of land are available for purposes related to the Project. Section 3.13. The Borrower shall (a) maintain or cause to be maintained records adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof; (b) cause the accounts of said department, or agencies for the Project to be audited, for each fiscal year, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; and . (c) furnish such accounts to the Association as soon as available, but in any case not later than six months after the end of each fiscal year. ARTICLE IV Remedies of the Association Section 4.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (R) Subject to subparagraph (b) of this paragraph: (i) The right of the Borrower to withdraw the proceeds of USAID Grant, ADF Loan and EEC Special Action Credit 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) The USAID Grant, ADF Loan and EEC Special Action Credit shall have become due and payable prior to the agreed maturity the eof. -7- (b) Subperagraph (a) of this paragraph shall not apply if: (i) such suspension, cancellation termination or prematuring is not caused by the failure of the, Borrower to perform any of its obligationg under such agreenpfnt, and (ii) adequate funds for the Project are available to the, Boriower from other sources on terms and cond1itions consistent ith the obligations of the lTorrover under -his Agreement. Section 4.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified pursuant to paragraph (d) thereof, namely, that the event specified in paragraph (a) (i) and (ii) of Section 4.01 of this Agreement shall occur. ARTICLE V Effective Date; Termination Section 5.01. 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 Borrower shall have taken all necessary measures for making the 60 hectare training farm at Afgoi available as part of the Farm Management and Extension Training Center and the 400 hectare Demonstration State Farm at Jannale as part of the Farm Management Advisory Service--, (b) The Borrower shall have made all necessary arrangements to give the Farm Management Advisory Service access to the two other existing State farms at Jannale. (c) The Borrower shall have appointed the Project Director, the Project Technical Manager and the Financial Controller refer- red to in Section 3.01 (b) of this Agreement as well as the Procurement Consultants referred to in Section 3.03 of this Agreement. (d) The Borrower shall have established the Project Manage- ment Unit referred to in Section 3.01 (b),of this Agreement. (e) The Borrower shall have deposited the initial amount of three million Somali shillings in the Project Account pursuant to the provision of Section 3.02 of this Agreement. a.y4 -8 - (f) The EEC Special Action Credit Agreement, USAID Grant Agreement and the ADF Loan Agreement referred to in the Preamble to this Agreement shall have become effective or are declared effective concurrently with this Agreement. Section 5.02. The date Q21 is hereby speci- fied for the purposes of Section 12.04 of the General Conditions. Section 5.03. The obligations of the Borrower under Article III 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 VI Representatives of the Borrower; Addresses Section 6.01. The Minister of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministry of Finance MNogadiacio, Somalia Cable address: MINFINANCE Mogadiscio 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 vritten. SOMALI DEMOCRATIC REPUBLIC- By Authorized Representative INTERNATIONAL DEVELOPMENt ASSOCIATION By Regional Vice President Eastern 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 a r -q of the Credit to each Category and the percentage of expei .ures Ifor items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Vehicles-and 400,000 100% equipment (2) Technical 3,59O,0 100% of foreign assistance expenditures and training (3) Local salaries 2,100,000 41% of local expenditures (4) Operating and 2,100,000 100% maintenance costs (5) Unallocated 2,400,000 TOTAL 10,500,000 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 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 ja~~ . .1 -114- (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: (i) prior to the date of this Agreement; and (ii) under Part H of the Project, until the Borrower shall have identified necessary technical assistance staff for strengthening the Central Department of Statistics. 5. Notwithstanding the allocation- ;of an amount of the Credit or the disbursement percentages se. 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 anothe i 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 "Tall have reasonably determined that the procurement of any itc ,d 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 righat, power or remedy of the - 12 - Association under the Development Credit Agreement, by notice to the Borrover, cancel such amount of the Credit as, in the Associ- ation's reasonable opinion, represents the amount of such expendi- tures which would otherwise have been eligible for financing out of the proceeds of the Credit. 4~. -13- SCHEDULE 2 Description of the Project The Project consists of the following main components: Part A: The establishment, development and operation of a Farm Management and Extension Training Center at Afgoi. Part B: The strengthening of the National Extension Service through the establishment and operation of National Technical Headquarters at Afgoi and the upgrading and operation of two Farmers' Training Centers, to be converted into Extension Training Centers at Bonka and Jannale. Part C: The establishment and operation of a Farm Management Advisory Service supported by a 400 hectare State Farm at jannale to be rehabilitated and converted into a Demonstration State Farm. Part D: The establishment and operation of a Project Management Unit. Part E: The strengthening of the Agricultural Secondary School at Afgoi by provision of an agricultural training specialist and six teaching staff in technical subjects. Part F: Overseas training for: (a) about 38 post-graduate students of the faculty of Agriculture; (b) about 6 senior Ministry of Agriculture personnel; and (c) about 58 extension and farm management field technical staff. ij. 14 Part G: Provision of technical assistance for development of a national strategy for strengthening the National Research System and its links with extension° Part H: Strengthening of the Central Department of Statistics in the State Planning Commission. The Project is expected to be completed by June 30, 1984. 41 -15- SCHEDULE 3 Procurement A. International Competitive Bidding 1. Except as provided in Part B hereof, goods 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 Bank in March 1977 (hereinafter called the Guidelines), on the basis of inter- national competitive bidding as described in Part A of the Guidelines. 2. For goods to be procured on the basis of international competitive bidding, in addition to the requirements of paragraph 1.2 of the Guidelines, the Borrower 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. The Borrower 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 compe- titive bidding. 3. To the extent practicable, identical or similar items shall be grouped for purposes of bidding so as to permit bulk procure- ment as shall be consistent with said technical and procurement practices. 4. 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 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. "Al1 -16- B. Other Procurement Procedures Contracts under Categories 1 and 4 of Schedule 1 for the purchase of vehicles, equipment and supplies estimated to cost less than the equivalent of $50,000 each may be procured on the basis of competitive bidding advertised locally in accordance with procedures acceptable to the Association; provided, however, that the price of the contracts so procured shall, in the aggregate, not exceed $300,000 equivalent net of taxes. C. 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 for goods estimated to cost the equivalent 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 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 Bor- rower 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, by the consul- tants referred to in Section 3.02 of this Agreement, on the evaluation and comparison of the bids received, together with the recommendations for award of the said consultants 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 or prequalification invited. 17- (d) 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* 2. With respect to each contract not governed by the preceding paragraph, the Borrower shall furni! 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, 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 the Borrower and state the reasons for such determination. 3. Before agreeing to any material modification or waiver of the terms and conditions of a contract, or granting an extension of the stipulated time for performance of such contract, or issuing any change order under such contract (except in cases of extreme urgency) which would increase the cost of the contract by more than 10% of the original price, the Borrower shall inform the Association of the proposed modification, waiver, extension or change order and the reasons therefor. The Association, if it determines that the croposal would be inconsistent with the provisions of this Agreement, shall promptly inform the Borrower and state the reasons for its determination. ; INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the 2 day\ of 197-9-. FOR SECRETARY