Rwanda - Integrated Forestry And Livestock Development Project : Credit 1039 - Credit Agreement - Conformed

CREDIT NUMBER 1039 RW Development Credit Agreement (Integrated Forestry and Livestock Development Project) between REPUBLIC OF RWANDA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated 7, 1980 CREDIT NUMBER 1039 RW DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated 7 1980, between REPUBLIC OF RWANDA (hereinafter called the Borrower) and INTER- NATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Associa- tion). 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 provided; (B) by letter addressed by the Association to The Ministry of Finance of the Borrower dated May 16, 1980, the Association granted an advance to the Borrower of $1,000,000 to assist in the financing of the preparation of the Project; (C) pursuant to the terms of such advance the amount thereof is to be refunded to the Association out of the proceeds of the Credit provided for in this Agreement; 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 Agreements of the Association being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Project Account" means the Account referred to in Section 2.02 of this Agreement; -2- (b) "Kigali and Butare Sub-project" means the Sub-project referred to in Part B of Schedule 2 to this Agreement; and (c) "Gishwati Sub-project" means the Sub-project referred to in Part C of Schedule 2 to 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 twenty-one million dollars ($21,000,000). 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, establish, maintain and manage an account (the Project Account) in the Banque Nationale du Rwanda, under terms and conditions satis- factory to the Association. (c) The Borrower shall use the amounts on deposit in the Project Account only to make payments for expenditures under the Project which are eligible to be financed out of the proceeds of the Credit. (d) The Borrower shall maintain in the Project Account, at all times, funds equivalent to $400,000, provided, however, that, if such level of funds is adjusted by agreement between the Borrower and the Association, the ratio of the funds further deposited by the Association, in accordance to this Section, and by the Borrower, in accordance to Section 3.01 of this Agreement, shall be 3 to 1. (e) The Association shall: (i) promptly after the Effective Date, withdraw on behalf of the Borrower from the Credit Account and deposit in the Project Account an initial amount in the - 3 - currency of the Borrower not exceeding $300,000 equivalent; and (ii) at the request of the Project Coordinator and the Adminis- trative and Financial Director, further withdraw from the Credit Account and deposit in the Project Account such amounts as shall be required to reimburse the Borrower for payments made out of the Project Account for expenditures for the Project eligible for financing under the Development Credit Agreement. (f) The Borrower shall furnish to the Association in respect of each payment out of the Project Account such documents and other evidence as the Association shall reasonably request, showing that the payment was made on account of the reasonable cost of goods or services required for the Project and to be financed out of the proceeds of the Credit. (g) If the Association shall have determined that any pay- ment out of the Project Account: (i) was made for any expenditure not eligible for financing by withdrawal from the Credit Account; or (ii) was not justified by the evidence furnished pursuant to paragraph (f) of this Section, the Borrower shall, promptly upon notice from the Association and prior to any further deposit in the Project Account by the Association, deposit in the Project Account an amount equal to the amount of such payment. (h) Notwithstanding the provisions of paragraph (e) of this Section, no further deposit in the Project Account shall be made when the Association shall have determined that all further withdrawals can be made under paragraph (a) of this Section or when the total amount withdrawn from the Credit Account shall have reached the equivalent of $20,700,000, whichever shall be sooner. Withdrawal of the remaining amount of the Credit shall follow procedures agreed between the Borrower and the Association. (i) Promptly after 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 advance referred to in the preamble to this Agree- ment withdrawn and outstanding as of such date and to pay any unpaid charges thereon. Any unwithdrawn balance of the authorized amount of such advance shall automatically be cancelled on the same date. Section 2.03. Except as the Association shall otherwise agree, procarement 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. -4- Section 2.04. The Closing Date siall be September 30, 1986 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 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 March 15 and September 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each March 15 and September 15 commencing September 15, 1990, and ending March 15, 2030, each installment to and including the installment payable on March 15, 2000, 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. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out the Project through its Ministry of Agriculture and Livestock with due dili- gence and efficiency and in conformity with appropriate adminis- trative, financial, forestry, agricultural, animal husbandry and engineering practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Without any limitation on its obligations under para- graph (a) of this Section, the Borrower shall: (i) deposit in the Project Account an initial amount of $100,000 equivalent; (ii) not later than March 31 of each year, until and including the year in which the Project is completed, deposit an amount equivalent to such portion of the expenditures to be made under - 5 - Categories 2, 3, 4 and 5 of Table 1 of Schedule 1 of this Agree- ment, during the forthcoming fiscal year, as shall not be reim- bursable from the Credit Account, in accordance with the dis- bursement percentages set forth in such Categories; and (iii) each three month period, deposit an amount equivalent to such portion of the expenditures to be made under Category 1 of Table 1 of Schedule 1 of this Agreement, during the forthcoming fiscal year, as shall not be reimbursable from the Credit Account, in accor- dance with the disbursement percentage set forth in such Category. Section 3.02. The Borrower shall establish and thereafter maintain within its Ministry of Agriculture and Livestock a Project Management Committee, which shall supervise the execution of the Project and which will include the Minister of Agriculture and Livestock or his delegate, the Project Coordinator, the Administrative and Financial Director and the Directors for Parts B and C of the Project and their Deputies. Such Committee shall delegate (a) its responsibility for the overall execution of the Project to the Project Coordinator; and (b) its responsibility for the day-to-day execution of the Project to the Directors for Parts B and C of the Project, concerning the Kigali and Butare Sub- project and the Gishwati Sub-project, respectively. Section 3.03. For the purpose of carrying out the Project, the Borrower shall employ: (a) inter alia, (i) a Project Coordinator; (ii) an Administrative and Financial Director and his Deputy; (iii) a Construction Superintendent; (iv) a Director for Part B of the Project and his Deputies; and (v) a Director for Part C of the Project and his Deputies; each of whom shall meet such qualifications, experience and terms and conditions of employment (including terms of reference) as shall be satisfactory to the Association; and (b) Consultants, whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. -6- Section 3.04. The terms of reference and conditions for exe- cution for each of the studie3 and trials to be carried out under Part E of the Project shall require the concurrence of the Asso- ciation before the start of each such study or trial. Section 3.05. (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 3.06. (a) The Borrower shall furnish to the Associa- tion, promptly upon their preparation, the plans, specifications, reports, 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 reason- ably request. (b) The Borrower shall: (i) maintain records and procedures adequate to record and monitor the progress of the Project (in- cluding 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) enable the Association's accredited representatives to visit the facili- ties 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; (iii) provide the Associati"n during the Project implementation period: (A) with semiannual reports on the progress in the carrying out of the Project; and (B) not later than three months after the end of each fiscal year, with an annual report on the progress in the carrying out of the Project, all such reports to be of such scope and in such detail as the Association shall reasonably request; and (iv) 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. - 7 - (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 3.07. The Borrower shall: (a) take or cause to be taken all such action as shall be necessary to acquire as and when needed all rights in respect of land as shall be required for carrying out the Project and shall furnish to the Association, promptly after such acquisition, evidence satisfactory to the Association that such rights in respect of land are available for purposes related to the Project; and (b) pay to farmers an appro- priate compensation for the acquisition of the rights in respect of cultivated land for purposes of establishing plantations under Parts B and C of the Project. Section 3.08. The Borrower shall (a) as soon as possible, but no later than December 31, 1985, or such later date as the Associ- ation shall otherwise agree, implement the reorganization of its Waters and Forests Department, including its Forestry Division; and (b) not later than December 31, 1985, exchange views with the Association on the future management arrangements for the Gishwati Forest under Part C of the Project. Section 3.09. Prior to October 1 of each year commencing in 1980, the Borrower shall prepare and furnish to the Association for its approval a detailed work plan for the Project for the ensuing fiscal year. Section 3.10. The Borrower shall: (a) charge and collect from the farmers participating in Part C of the Project an appropriate fee for any veterinary service or product provided under the Project to any livestock of such farmer or his family; and -8- (b) ensure that the supply of veterinary materials, drugs and medicines required for purposes of paragraph (a) of this Section is sufficient at all times and, for this purpose, shall maintain a revolving fund for their purchase, into which revenue from the sales of such items and any additional advances of funds required to cover any deficit, including foreign exchange, shall be deposited as necessary. ARTICLE IV Other Covenants Section 4.01. The Borrower shall: (a) maintain 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, including, without limitation to the foregoing, separate accounts reflecting all expenditures described in Categories 1 and 2 (b) of the table in paragraph 1 of Schedule 1 to this Agreement on account of which withdrawals are requested from the Credit Account on the basis of certificates of expenditure; and (b) retain, until one year after the Closing Date, all records (orders, invoices, bills, receipts and other documents) evidencing the expenditures on account of which withdrawals are requested from the Credit Account on the basis of certificates of expenditure and shall enable the Association's accredited repre- sentatives to examine such records. Section 4.02. The Borrower shall: (a) have the separate accounts referred to in Section 4.01 (a) of this Agreement for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (b) furnish to the Association, as soon as available, but in any event not later than six months after the end of each such year, a certified copy of the report on such audit by such audi- tors, of such scope and in such detail as the Association shall have reasonably requested, including, without limitation to the foregoing, a separate opinion by said auditors in respect of the 9 expenditures and records referred to in Section 4.01 (b) of this Agreement as to whether the proceeds of the Credit withdrawn from the Credit Account on the basis of certificates of expenditure have been used for the purpose for which they were provided; and (c) furnish to the Association such other information concerning such separate account, records and expenditures and the audit thereof as the Association shall from time to time reason- ably request. Section 4.03. The Borrower shall cause the infrastructures under Parts A and C and the plantations and rural woodlots under Parts B and C of the Project to be operated under the supervision of qualified and experienced management assisted by competent staff in ddequate numbers, and shall cause their respective build- ings, equipment, plantations, roads and other facilities to be adequately maintained, and the necessary repairs and renewals thereof to be made, all in accordance with appropriate administra- tive, financial, forestry, agricultural, animal husbandry and engineering practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 4.04. Unless otherwise agreed with the Association, the Borrower shall: (i) sell, against payment in cash or in kind, the seedlings produced by the nurseries established under Parts B and C of the Project at prices adequate to recover the full production cost of such seedlings (excluding expatriate management costs), subject to ensuring adequate incentives to farmers for tree planting; and (ii) consult periodically with the Association on the levels of such prices and on the adequacy of such incentives. Section 4.05. The Borrower shall: (a) (i) before December 31, 1982, exchange views with the Association and establish a policy for its forestry sub-sector, such policy to include a system of exploitation of existing state plantations and a system of marketing and pricing of wood pro- ducts; and (ii) exchange views with the Association on the carry- ing out and the results of such policy at least once every year; and (b) before December 31, 1985, (i) exchange views with the Association on the exploitation, marketing and pricing arrange- ments that shall apply for the fuelwood, poles and saw timber plantations under Parts B and C of the Project; and (ii) ensure - 10 - that the stumpage fees charged for wood produced by such planta- tions be sufficient to recover the full investment, operating and maintenance costs of the plantations. ARTICLE V Remedies of the Association Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) the actions taken in accordance to Section 6.01 (a) of this Agreement shall have been amended, suspended, abrogated, repealed, waived, or shall cease to be enforced, so as to affect materially and adversely the carrying out by the Borrower of its covenants, agreements and obligations set forth in this Agreement; and (b) the Ministerial Arrete referred to in Section 6.01 (c) of this Agreement 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 the Borrower of its covenants, agreements and obligations set forth in 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, that any 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 Borrower has taken all necessary actions to, inter alia, designate appropriate areas for afforestation in Kigali and Butare Prefectures as national plantations, outline the procedure for the development and management of such planLations and define the objectives and procedures of the Borrower's program - 11 - for development of the Gishwati Forest, and that such actions are in full force and effect and in substance satisfactory to the Association; (b) the Project Account has been opened in accordance with terms and conditions satisfactory to the Association and the Borrower has deposited the equivalent of $100,000 therein; (c) a Ministerial Arrete of the Borrower, which estab- lishes the Project Management Committee referred to in Section 3.02 of this Agreement is in full force and effect and in sub- stance satisfactory to the Bank; and (d) the Project Coordinator and the Administrative and Financial Director (referred to in Section 3.03 (a) of this Agreement) have been appointed by the Borrower in accordance with such Section. Section 6.02. The following is specified as an additional matter, 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, namely that the Borrower has taken all actions mentioned fn Section 6.01 (a) of this Agreement in accordance with the legislation of Rwanda and that these actions are valid and appropriate for the purposes for which they have been taken. Section 6.03. The date November 10, 1980 is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.04. The obligations of the Borrower under Sections 4.01, 4.02 and 4.05 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 in charge of the Finances of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. - 12 - Section 7.02. The following addresses are specified for the purposes 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 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 Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President Eastern Africa - 13 - 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) Project administration 1,000,000 30% and extension services, including staff salaries and office and vehicle operating costs (2) Civil works, including 95% road works and devel- opment of plantations and livestock (a) under contract 2,300,000 (b) by force account 9,200,000 (3) Vehicles, equipment 500,000 100% of foreign and materials expenditures and 95% of local expenditures (4) Consultants' services 3,000,000 100% (5) Training; and trials, 900,000 100% of foreign studies and surveys expenditures and 90% of local expenditures - 14 - Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (6) Refunding of 1,000,000 100% of amount advance for Project outstanding at preparation Effective Date (7) Initial deposit in 300,000 Project Account (8) Unallocated 2,800,000 TOTAL 21,000,000 2. Any unpaid charges on the advance for the preparation of the Project withdrawn pursuant to Section 2.02 (i) of this Agree- ment will be taken from Category (8) above. 3. 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; 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. 4. 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. - 15 - 5. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expenditures: (i) prior to the date of this Agreement; (ii) under Categories (1), (2) and (3) with respect to Part B of the Pro- ject until the Borrower has appointed the Director and two Deputy Directors for the Kigali and Butare Sub-project; and (iii) under Categories (1), (2) and (3) with respect to Part C of the Pro- ject until the Borrower has appointed the Director of the Gish- wati Sub-project and the heads of such Sub-project's afforestation and livestock offices and their deputies. 6. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph 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 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. 7. 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 Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 16 - SCHEDULE 2 Description of the Project The Project is: (a) to develop the institutional capacity for policy formulation regarding the forestry sector of Rwanda and the implementation thereof; (b) to initiate a plantation program for providing fuelwood, poles and saw timber for domestic consumption; and (c) to intensify the food crops and the livestock industry in the Gishwati area. The Project consists of the following Parts: Part A: Strengthening of forestry services within the Ministry of Agriculture and Livestock, including, inter alia: (i) reorganiza- tion of the Waters and Forests Department, including its Forestry Division; (ii) construction of appropriate offices; and (iii) provision of staff and logistical support; Part B: Kigali and Butare Sub-project Development in Kigali and Butare Prefectures of: (i) about 5,000 ha and 3,000 ha respectively, as fuelwood and pole (short- rotation) plantations to supply the urban populations of Kigali and Butare; and (ii) rural woodlots to supply fuelwood and poles for the rural population mostly from these Prefectures; Part C: Gishwati Sub-project Development in Gisenyi Prefecture of: (i) about 4,000 ha as the initial part of a long term integrated forestry and live- stock development program within the Gishwati Forest, including about 2,000 ha of softwood plantations for the production of saw timber, about 2,000 ha of pastures for high productivity dual- purpose cattle production, of which about 200 ha for a technical support center; and (ii) integrated crop and livestock services (extension and experimental credit and marketing) in the farming zones of the seven communes surrounding the Gishwati Forest; Part D: On-the-job training for Rwandese staff; - 17 - Part E: Studies and trials, including, inter alia: (i) a study of Rwanda's energy use and needs; (ii) trials of more efficient charcoal production techniques; (iii) development of new cooking techniques for the rural population; and (iv) improvement of pasture and animal production; Part F: Further project preparation, and provision of scholarships in forestry, agricultural, livestock, and financial disciplines. The Project is expected to be completed by March 31, 1986. - 18 - SCHEDULE 3 Procurement A. International Competitive Bidding 1. Except as provided in Part C 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 Guide- lines. 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 in question. The Borrower shall provide the necessary information to update such notice annually so long as any goods remain to be procured on the basis of international competitive bidding. 3. To the extent possible, goods shall be grouped so as to permit bulk procurement. 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 the imported goods, or the ex-factory price or off-the-shelf price of other goods, offered in such bid; and (ii) customs duties and other import taxes levied in connection with the importation, or the sales and similar taxes levied in connection with the sale or delivery, pursuant to the bid, of the goods shall not be taken into account in the evaluation of the bids. 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 - 19 - the territory of the Borrower may be granted a margin of pre- ference 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 Borrower 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 domestic bids. (3) Group C: bids offering any other goods. 3. In order to determine the lowest evaluated bid of each group, all evaluated bids in each group shall first be compared among themselves, without taking iato account customs duties and other import taxes levied in connection with the importation, and sales and similar taxes levied in connection with the sale or delivery, pursuant to the bids, of the goods. Such lowest evalu- ated 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 evaluated 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 - 20 - 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. Other Procurement Procedures 1. Contracts for the supply of materials and equipment estimated to cost the equivalent of less than $80,000 shall: (a) be awarded in accordance with the Borrower's local competitive bidding procurement procedures; and (b) in the event such estimations are of more than $20,000, be awarded following bids or price quotations invited from inde- pendent suppliers located in not less than three member countries of the Association (and Switzerland). 2. Civil works, including site development, shall be carried out either by the Borrower on force account or in accordance with the Borrower's local competitive bidding procedures. D. 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 materials and equipment estimated to cost the equivalent of $80,000 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 - 21 - sufficient time for its review, a detailed report on the evalua- tion and comparison of the bids received, and such other inform- ation as the Association shall re asonably request. The Association shall, if it determines that the intended award would be incon- sistent with the Guidelines or this Schedule, promptly inform the Borrower and stace the reasons for such dLtermination. (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 for materials and equipment estimated to cost the equivalent of $20,000 or more but less than $80,000, not governed by the preceding paragraph, the Borrower 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 an.lysis 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 15% 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 proposal 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 day of 198k. FOR SECRETARY