Upper Volta - Niena Dionkele Rice Development Project : Credit 1013 - Credit Agreement - Conformed

CREDIT NUMBER 1013 UV Development Credit Agreement (Niena Dionkele Rice Development Project) between REPUBLIC OF UPPER VOLTA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1980 CREDIT NUMBER 1013 UV DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated '? , 1980, between REPUBLIC OF UPPER VOLTA (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 (hereinafter called the Project) by extending the Credit as hereinafter provided; (B) by letter addressed by the Association to the Minister of Finance of the Borrower on April 19, 1978, the Association granted an advance to the Borrower in the amount of $120,000 for the preparation of the Project; and (C) pursuant to the terms of said advance, the amount thereof is to be refunded to the Association out of the proceeds of the Credit provided for in this Agreement; 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 and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: -2- (a) "Ministry" means the Ministry of the Borrower respon- sible for rural development; (b) "Project Management Unit" means the unit to be estab- lished under Section 3.02 (a) of this Agreement for the management of the Project; (c) "Management Committee" means the committee to be estab- lished under Section 3.02 (a) of this Agreement; (d) "Executive Committee" means the committee to be estab- lished under Section 3.02 (a) of this Agreement; (e) "Project Area" means an area of about 600 square kilo- meters located in the Niena Dionkele plain; (f) "Special Account" means the account to be opened by the Borrower under Section 2.02 (b) of this Agreement; and (g) "ORD" means the Organisme R6gional de Developpement of Hauts Bassins. 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 equi- valent to six million five hundred thousand dollars ($6,500,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of this Section and of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Association, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit. (b) The Borrower shall, for the purposes of the Project, open a Special Account in a commercial bank on terms and condi- tions satisfactory to the Association. Disbursements from the Special Account shall be made exclusively to finance the costs of goods and services required to carry out the Project. -3- (c) The Association shall, promptly after the Effective Date, withdraw on behalf of the Borrower from the Credit Account and deposit in the Special Account an initial amount in the currency of the Borrower not exceeding $400,000 equivalent. Thereafter, at the request of the Borrower, the Association shall further withdraw from the Credit Account and deposit in the Special Account such amounts as shall be required to reimburse the Borrower for payments made out of the Special Account for expen- ditures for the Project eligible for finanting under the Devel- opment Credit Agreement, but only to the extent that the amount of any such deposit, together with any amount remaining on deposit in the Special Account as of the date of such request, shall not exceed in the aggregate the equivalent of $400,000. (d) The Borrower shall furnish to the Association in respect of each payment out of the Special Account such documents and other evidence as the Association shall reasonably request, 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. (e) If the Association shall have determined that any payment out of the Special Account: (i) was made for any expen- diture not eligible for financing by withdrawal from the Credit Account; or (ii) was not justified by the evidence furnished pursuant to paragraph (d) of this Section, the Borrower shall, promptly upon notice from the Association and prior to any further deposit in the Special Account by the Association, deposit in the Special Account an amount equal to the amount of such payment. (f) Notwithstanding the provisions of paragraph (c) of this Section, no further deposit in the Special Account shall be made when the Association shall have determined that all further 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 $6,100,000, whichever shall be sooner. Withdrawal of the remaining amount of the Credit shall follow procedures agreed between the Borrower and the Association. (g) 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, procurement of the goods and civil works to be financed out of the proceeds of the Credit, shall be governed by the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1984 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 chqrgs shall be payable semiannually on March 1 and September 1 in each year. Secticii 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each March 1 and September 1 commencing September 1, 1990, and ending March 1, 2030, each installment to and including the installment payable on March 1, 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 French Republic is hereby specified for the purposes of Section 4.02 of the General Condi- tions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out the Project through the Ministry with due diligence and efficiency and in con- formity with appropriate economic, administrative, financial and agricultural practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. -5- (b) The Borrower shall include in its budgets for each year the amounts necessary to cover its financing of the Project. Section 3.02. Pursuant to Section 3.01 above, the Borrower shall: (a) establish and operate a Project Manag,ement Unit, a Management Committee and an Executive Committee, all with such authority, responsibilities and staff as are set forth in Schedule 4 to this Agreement, the Management Cc'mittee and the Executive Committee to be established not latec than June 30, 1980; (b) provide the Project Management Unit, the Management Committee and the Excutive Committee promptly with such funds, facilities, services and other resources as are required for their operation; (c) employ qualified and experienced senior staff to fill the positions of Project Manager and Project Accountant and shall employ three junior managers; and (d) employ consultants and other experts, whose qualifica- tions, experience and terms and conditions of employment shall be satisfactory to the Borrower and the Association. Section 3.03. The Borrower shall ensure that: (a) its National Dams and Irrigation Service (ONBI) super- vise the carrying out of the civil works included in the Project; and (b) its Secondary Road Maintenance Service (SERS) carry out the construction of roads included in Part A.1 of the Project. Section 3.04. (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. -6- Section 3.05. (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 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 3.06. Agricultural credits for the purchase by farmers of draft animals and equipment and annual inputs shall be granted under the terms and conditions set forth in Schedule 5 to this Agreement. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with -.7- consistently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Project, of the Ministry and of any other department or agency of the Borrower responsible for carrying out the Project or any part thereof. (b) Pursuant to paragraph (a) of this Section, the Borrower shall cause (i) the Project Management Unit to maintain separate accounting systems, each with a separate bank account, in respect of (A) Part A of the Project, except for farm inputs and agricul- tural credits, (B) farm inputs and (C) agricultural credits; and (ii) the Rice Industry Support Group to maintain a separate accounting system and bank account for Part B of the Project, all under terms and conditions satisfactory to the Association. (c) The Borrower shall retain, until one year after the Closing Date, all records (orders, invoices, bills, receipts and other documents) evidencing expenditures for the Project on account of which withdrawals were requested from the Credit Account on the basis of certificates of expenditures and shall enable the Association's accredited representatives to examine such records. Section 4.02. The Borrower shall: (i) have the separate accounts referred to in Section 4.01 (b) of this Agreement for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors accept- able to the Association; (ii) furnish to the Association, as soon as available, but in any case not later than six months after the end of each such year, a certified copy of the reports of such audits by said auditors, 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 as to whether the proceeds of the Credit withdrawn from the Credit Account have been used to make payments for goods received, or works or services performed, and that such goods, works and services were eligible for financing under this Agreement and were used in the carrying out of the Project; and (iii) furnish to the Association such other information concerning said separate accounts, records and expenditures and the audits thereof as the Association shall from time to time reasonably request. Section 4.03. The Borrower shall cause all facilities in- cluded in the Project to be adequately maintained and all neces- sary renewals and repairs to be made thereto; and shall provide, - 8 - promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 4.04. (a) The Borrower shall establish by Decem- ber 31, 1981, and thereafter collect from farmers benefiting from water control improvements throughout the country, such charges as shall be necessary to recover all recurrent costs of the land development plus such portion of the investment costs as farm budgets indicate is feasible for the improvements in question. (b) The Borrower shall review such charges annually with the objective of maintaining their levels in real terms. (c) Charges established in the Project Area pursuant to paragraph (a) of this Section shall be fixed for the first year at 8,000 CFA francs per ha and shall be increased progressively so as to reach 20,000 CFA francs per ha in respects of the third crop- ping year. 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) land or rights in respect of land required for the construction and operation of the facilities included in the Project have been acquired; (b) the Special Account has been opened; and (c) two of the three junior managers referred to in Section 3.02 (c) of this Agreement have been selected. Section 5.02. The date Z4 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 IV of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date fifteen years after the date of this Agreement, whichever shall be the earlier. -9- ARTICLE VI Representatives of the Borrower; Addresses Section 6.01. The Minister of the Borrower responsible for finance is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrouer: Ministere des Finances Ouagadougou Upper Volta Cable address: Telex: MINIFINANCE MIFICOM Ouagadougou 5256 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 - 10 - District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF UPPER VOLTA By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President Western Africa - 11 - 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 A. PRODUCTION - Part A of the Project (1) (a) Civil works ) 1,530,000 88% (b) Vehicles and ) 100% of for- equipment ) eign expendi- ) tures or, if ) purchased ) locally, ) 88% of local ) expenditures (c) Local staff ) 88% salaries and ) operating costs ) (2) Salaries and allow- 300,000 100% ances of interna- tionally recruited staff (3) (a) Credits for ) 400,000 100% of dis- oxen ) bursements (b) Draft equip- ) 100% of for- ment ) eign expendi- tures or, if purchased locally, 88% of local expenditures - 12 - Amount of the Credit Allocated % of (Expressed in .Expenditures Category Dollar Equivalent) to be Financed (c) Incremental ) The lesser of farm supplies ) (i) 100% of and inputs ) foreign ex- penditures or, if purchased locally, 80% of local ex- penditures; or (ii) 100% of the price charged or to be charged to farmers B. RICE INDUSTRY SUPPORT - Part B of the Project (4) (a) Civil works ) 1,400,000 88% (b) Vehicles and ) 100% of for- equipment ) eign expendi- ) tures or, if ) purchased ) locally, ) 88% of local ) expenditures (c) Local staff ) 88% salaries and ) operating costs ) (5) Consultants' services, 1,700,000 100% studies, audits and salaries and allow- ances of interna- tionally recruited staff C. GENERAL (6) Reimbursement of prin- 120,000 Principal out- cipal of advance for standing at Project preparation Effective Date - 13 - Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (7) Initial deposit in 400,000 Special Account (8) Unallocated 650,000 TOTAL 6,500,000 2. Any unpaid charges on the advance for the preparation of the Project withdrawn pursuant to Section 2.02 (g) 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; provided, however, that if the currency of the Borrower is also that of another country from the territory of which goods or services are supplied, expenditures in such currency for such goods or services shall be deemed to be "foreign expenditures"; and (b) the term "local expenditures" means expenditures in the currency of the Borrower or 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. - 14 - 5. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expen- ditures prior to the date of this Agreement. 6. 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. 7. If the Association shall have reasonably determined that the procurement of any item in ahy 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 restric- ting or limiting any other right, power or remedy of the Associa- tion under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as, in the Asso- ciation's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 15 - SCHEDULE 2 Description of the Project The Project is a four-year pilot undertaking, to convert swamp land to more productive use, and to support government institutions involved in the rice sub-sector. The main Project objectives would be: (a) to test a number of technical, organiza- tional and socio-economic assumptions regarding future swamp development; and (b) to address rice sub-sector issues including pricing, marketing and economic aspects. The Project includes: Part A: Production 1. Developing 400 ha of the North Dougo swamp for single-crop rainfed rice production; 2. providing a trained extension service, and promoting better farming through utilization of improved husbandry, agricultural credits, farm inputs, oxen and equipment; 3. constructing and operating two farm service centers and promoting a Niena Dionkele Cooperative Society; 4. procurement of farm inputs and oxen and equipment for sale on cash or credit; 5. establishing a demonstration unit, with demonstration, seed production and training functions; 6. establishing and operating a research substation to under- take research into Project-related matters; and 7. operating a program of agricultural credits to permit farmers to purchase draft animals, equipment and annual inputs, as set forth in Schedule 5 to this Agreement. Part B: Rice Industry Support 1. Strengthening the Ministry with technical assistance, charged amongst other things with the preparation of a rice industry policy study; 2. establishing a monitoring and evaluation unit; - 16 - 3. strengthening the management of the Kou Valley rice mill and providing for possible physical improvements; and 4. carrying out studies of further developments in the Project Area and of the national rice industry. The Project is expected to be completed by March 31, 1984. - 17 - SCHEDULE 3 Procurement A. International Competitive Bidding 1. Except as provided in Parts C or E of this Schedule, goods and civil works shall be procured under contracts awaided in accordance with procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans aid IDA Credits" published by the Bank in March 1977 (hereinafter called the Guidelines), on the basis of international competitive b,'dding as described in Part A of the Guidelines. 2. For goods and works to be procured on the *-sis of irter- national competitive bidding, in addition to the requirement" of paragraph 1.2 of the Guidelines, the Borrower shall prepare ind forward to the Association as soon as possible, and in any event not later than 60 days prior to the date of availability to txe public of the first tender or prequalification documents relatin7 thereto, as the case may be, a general procurement notice, in suc. form and detaii and containing such information as the Association shall reasonably request; the Association will arrange for the publication 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. 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 - 18 - Upper Volta may be granted a margin of preference in accordance with, and subject to, the following provisions: 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 Upper Volta if the bidder shall have established to the satisfaction of the Borrower and the Associa- tion that the manufacturing cost of such goods includes a value added in Upper Volta 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 into 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 eva- luated 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 the group A bid in such further comparison is the lowest, it - 19 - 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 civil works as well as contracts for farm draft equipment, farm inputs and other goods estimated to cost less than $100,000 but more than $30,000 equivalent, may be procured on the basis of local competitive bidding procedures. 2. Contracts for civil works, farm inputs and goods estimated to cost $30,000 equivalent or less and not included in the pre- ceding paragraph may be procured by negotiated purchase after solicitation of quotations from suppliers in accordance with the Borrower's procurement procedures. 3. Notwithstanding the above, contracts for inputs, regardless of value, may be procured through the Societe Voltalque pour les Fibres Textiles. 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 estimated to cost the equiva- lent of $100,000 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 stiall 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 - 20 - 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 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. (d) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to furnishing to the Association 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 1, the Borrower shall furnish to the Association, promptly after its execution and prior to furnishing to the Association 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 exten- sion 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 proposal would be inconsistent with the provisions of this Agreement, shall promptly inform the Borrower and state the reasons for its determination. E. Procurement without Contracting Civil works may be carried out under force account with the prior approval of the Association. - 21 - SCHEDULE 4 The Project Management Unit, the Management Committee and the Executive Committee The Project Management Unit The Project Management Unit would be established within the Ministry of Rural Development for the purpose of implementing Part A of the Project. The Unit would be based at N'dorola and would consist of a Project Manager, Deputy Project Manager, Accountant and appropriate extension, credit, accounting and other supporting staff. The Project Manager would be administratively responsible to the Director ORD Hauts Bassins. The Unit would be supported by the Rice Industry Support Group established under the project within the Ministry of Rural Development. Management Committee A Management Committee will be formed and chaired by the Sous pr6fet of N'dorola. The Committee would: (i) advise the Project Manager on all matters relating to the social customs, tradition and sensitivities of the local people; (ii) act as a sounding board for the Project Manager to determine attitudes to proposed actions; and (iii) encourage an involvement by the people in project planning and implementation. The Committee will consists of its Chairman, the Sous Prefet of N'dorola and the following members: the chief of the District and representatives of the ORD, the National Dams and Irrigation Service, the Directorate of Agricultural Services and the Office of the Cooperative, two representatives of the traditional chiefs and three representatives of farmers. Executive Committee This Committee will: (i) approve the budget; and (ii) review progress reports and examine Project performance against the budget. The committee will meet not less than twice each year. The Composition of the Committee will be as follows: The Prefet of Hauts Bassins will be the Chairman; members will comprise the Secretary General of Rural Development; the Directors of Rural Works and Water (HER), Agricultural Services, the ORD, - 22 - the National Agricultural Credit Fund (CNCA) and the Irrigated Crops Research Center and the Directors General of the National Cereals Agency, the National Dams and Irrigation Service, Com- merce, Treasury and Planning. - 23 - SCHEDULE 5 Agricultural Credits A. Conditions for Granting Medium Term Credits to Farmers 1. Credits to purchase oxen and equipment will be made available to members of village groups, upon the recommendation of the group, and of the head of the Co-operative. 2. Credit applications will be approved by the Project Manager. Credit applications for each farmer shall if possible include annual farm budgets for the period of the proposed credit, showing that the farmers' cash income from agricultural activities (either from cash crops, sale of livestock or from sale of surplus sub- sistence crops) will be sufficient to cover both his farming cash needs and his repayment obligations, and to provide an adequate surplus for his family cash needs. If an individual budget is not prepared, the application should be classified as conforming to an appropriate standard budget. 3- Credits will not be extended to individuals who are in arrears on previous credits, whether financed under the Develop- ment Credit Agreement or otherwise, or who are in arrears on paying their land use charge. 4. Credits will not be extended to individuals who have in the past not shown a willingness to follow recommended agricul- tural techniques. 5. Credits will not be extended to members of village groups when, as of the end of the next-to-last season, the proportion of actual repayments received from the group as a whole, compared to the repayments then due, was below 90 percent. 6. The interest rate on both short- and medium-term credits will be 8.5 percent per year. 7. In the case of credits for the purchase of oxen, the farmer will be required, at the time of taking out the credit and at the due date of each installment until the credit is repaid, to pay 10% of the price of the oxen in question to a Project Insurance Fund managed by the Financial and Administrative Unit of the Ministry. - 24 - 8. Farmers will be required to contribute a minimum of 25 percent of the cost of draft animals. No minimum down payment need be required for equipment purchased on credit. 9. Minimum repayment terms for oxen will be three equal yearly repayments, starting at the end of the first season for which the animals were purchased. 10. Minimum repayment terms for equipment will be an interest- only payment at the end of the first season for which the equip- ment was purchased, followed by four equal yearly repayments covering both interest and principal. 11. The head of the village group, the Veterinary Assistant and the draft animal expert will have to approve any oxen to be purchased by a farmer on credit. The farmer will agree to follow the advice of ORD staff regarding animal health and other cultural practices. 12. The head of the village group, the village extension worker, the draft animal expert and the Veterinary Assistant will all have to agree that a claim for payment from the Project Insurance Fund is valid. The Project Manager will then decide on meeting the claim, after consulting the head of the Co-operative. Payments for claims would be limited to the amount available in the Project Insurance Fund. B. Conditions for Granting Seasonal Credits to Farmers 1. Conditions A.1, A.3, A.4, A.5, A.6 will apply. 2. Credit applications will be approved by the Project Manager, who will verify that the amount of annual inputs to be purchased on credit is reasonable. C. Accounting and Reporting for Agricultural Credit Operations 1. The Financial and Administrative Unit will be responsible for designing detailed aspects of the accounting and reporting systems, and for supervising that procedures and controls are correctly followed. The procedures will be discussed with the Caisse Nationale de Credit Agricole. 2. With regard to both short- and medium-term agricultural credits financed under the Development Credit Agreement, all - 25 - operations and accounts shall be kept entirely separate, at all levels from other operations of the Project or of the ORD. 3. Particular attention will be paid in designing the accounting and reporting system to the correct treatment of the use of the Credit to purchase equipment to be resold to farmers benefiting from agricultural credits. 4. The system will ensure that all repayment transactions are correctly classified against agricultural credit transactions for the particular season involved. 5. Annual and semi-annual reports on credit transactions will be sent to the Ministry and to the Association by the Project Manager. 6. Repayments received shall be credited to the account for agricultural credits and shall, unless the Association shall otherwise agree, be used to finance further credit operations for farmers in the Project Area. 7. It is contemplated that the operations and responsibilities described above will be transferred to the Caisse Nationale de Credit Agricole when this body commences operations. The details of this transfer will be agreed between the Borrower and the Association. INTERNATIONAIL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true 'copy of the original in the archives ofthe Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the day of FOR SECRETARY