Upper Volta - Hauts-Bassins Agricultural Dev Project : Credit 1285 - Credit Agreement - Conformed

OWICI wOCUMENTS CREDIT NUMBER 1285 UV Development Credit Agreement (HaULt-Bassins Agricultural Development Project) between REPUBLIC OF UPPER VOLTA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1982 CREDIT NUMBER 1285 UV DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated ,2-, 1982, between the REPUBLIC OF UPPER VOLTA (hereinafter called the Borrower) and the 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 provided; (B) the Borrower intends to contract from the French Caisse Centrale de Cooperation Economique (hereinafter called CCCE) loans (hereinafter called the CCCE Loans) in an aggregate amount of forty five million French Francs to assist in financing part of the Project; (C) the Borrower intends to receive from the French Republic, acting through its Fonds d'aide et de Cooperation (hereinafter called the FAC) grants (hereinafter called the FAC Grants) in an aggregate amount of seventeen million five hundred thousand French Francs to assist in financing part of the Project; (D) the Borrower intends to receive from the International Fund for Agricultural Development (hereinafter called the Fund) a loan (hereinafter called the Fund Loan) in an amount equivalent to two million eight hundred thousand Special Drawing Rights to assist in financing the Project on the terms and conditions set forth in an agreement (hereinafter called the Fund Loan Agree- ment) between the Borrower and the Fund; (E) the Fund intends to appoint the Association as Cooperating Institution to administer the Fund Loan and the Association is prepared to accept such appointment; and WHEREAS the Association has agreed, on the basis, inter alia, of the 'qregoing, to extend the Credit to the Borrower upon the terms and -onditions 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 June 30, 1980, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agree- ments of the Association being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following addi- tional terms have the following meanings: (a) "Fund Loan Account" means the loan account established under the Fund Loan Agreement; (b) "Ministry" means the Ministry of the Borrower responsi- ble for Rural Development; (c) "ORD" means the Organisme R6gional de D&veloppement for Hauts-Bassins of the Borrower, established under Decree No. 76/125-PRES-DR-MF-EN-5, dated April 21, 1976; (d) "Project Area" means the area covered by the ORD; and (e) "Special Account" means the account to be established in accordance with Section 3.02 (b) of this Agreement. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Bor- rower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various cirren- cies equivalent to four million two hundred thousand Special Drawing Rights (SDR 4,200,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Article III of this Agreement. -3- Section 2.03. The Closing Date shall be June 30, 1988 or such later date as the Association shall establish. The Associa- tion shall promptly notify the Borrower of such later date. Section 2.04. (a) The Borrower shall pay to the Association a commitment charge at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of the Credit not with- drawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Development Credit Agree- ment to the respective dates on which amounts shall be withdrawn by the Borrooer from the Credit Account or shall be cancelled. (b) The commitment charge shall be paid: (i) at such places as the Association she"1 reasonably request; (ii) without re- strictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. 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. Commitment charges and service charges shall be payable semiannually on March I and September 1 in each year. Section 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, 1992, and ending March 1, 2032, each installment to and including the installment payable on March 1, 2002, 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 ?.epublic is hereby specified for the purposes of Section 4.02 of the General Condi- tions. ARTICLE III Allocation and Withdrawal of Proceeds of Credit and Fund Loan Section 3.01. (a) Subject to the rights of suspension and cancellation set forth in the Development Credit Agreement and -4- the Fund Loan Agreement, the amount of the Credit and the amount of the Fund Loan may be withdrawn from the Credit Account and the Fund Loan Account, respectively, in accordance with the provi- sions of this Agreement and with the allocation of the proceeds of the Credit and the Fund Loan set forth in Schedule 1 to this Agreement, as such allocation may be modified from time to time pursuant to the provisions of such Schedule or by further agree- ment between the Borrower, the Association and the Fund. (b) Withdrawals under Category 3 of the table set forth in paragraph 1 of Schedule 1 to this Agreement shall be limited to the items set forth in paragraph 3 (b) of such Schedule. Section 3.02. (a) The amount of the Credit and of the Fund Loan may be withdrawn from the Credit Account and from the Fund Loan Account 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 and of the Fund Loan. (b) The Borrower shall, for the purposes of the Project, cause the ORD to open a Special Account in a commercial bank on terms and conditions satisfaccory to the Association. Payments out of the Special Account shall be made exclusively to pay the reasonable cost of goods and services required to carry out the Project and to be financed under this Agreement in accordance with the provisions of the table set forth in paragraph 1 of Schedule I hereto. (c) The Association shall, promptly after the Effective Date, withdraw on behalf of the Borrowerzfrom the Credit Account and deposit in the Special Acount an initial amount in the cur- rency of the Borrower equivalent to SDR 120,000, as provided in Category (6) of the table set forth in paragraph 1 of Schedule I of this Agreement. Thereafter, at the request of the Borrower made pursuant to Section 3.03 below, the Association on behalf of the Borrower shall further withdraw from the Credit Account and deposit in the Special Account such amounts as shall be required to replenish the Special Account with amounts equal to payments made out of the Special Account from proceeds of the Credit for expenditures for the Project eligible for financing out of such proceeds under this Agreement, but only to the extent that the amount of any such deposit, together with any amount from such proceeds remaining on deposit in the Special Account as of the -5- date of such request, shall not exceed in the aggregate the equivalent of SDR 120,000. (d) Upon each deposit by the Association pursuant to this paragraph, the Association shall proceed as set forth in Sections 3.05 and 3.06 below. Except as the Association and the Fund shall otherwise determine, each such deposit after the initial deposit shall be withdrawn from the Credit Account and from the Fund Loan Account under the same Categories set forth in the table in paragraph 1 of Schedule 1 to this Agreement, and in the same respective amounts, as have been justified by the evidence supporting the request for such deposits furnished pursuant to paragraph (e) of this Section. (e) Prior to or at the time of each request by the Borrower for a deposit into the Special Account, the Borrower shall furnish to the Association in respect of each payment out of the Special Accovnt such documents and other evidence as the Associa- tion shall reasonably request, showing that such payment was made to pay the reasonable cost of goods or services required for the Project and to be financed out of the proceeds of the Credit and the Fund Loan in accordance with Schedule 1 to this Agreement. (f) If the Association shall have determined that any pay- ment out of the Special Account: (i) was made for any expenditure or in any amount not eligible for financing by withdrawal from the Credit Account or the Fund Loan Account; or (ii) was not justified by the evidence furnished purWant to paragraph (e) of this Section, the Borrower shall, promptly upon notice from the Association and, unless otherwise agreed by the Association or the Fund, prior to any further deposit by the Association or the Fund in the Special Account, deposit in the Special Account or refund to the Association and the Fund an amount equal to the amount of such payment or of the portion thereof not so eligible or justified. (g) Notwithstanding the provisions of paragraph (c) of this Section, no further deposit in the Special Account shall be .aade by the Association when (i) the Association shall have determined that all further withdrawals can be made directly by the Borrower from the Credit Account under Sections 3.01 (a) and 3.02 (a) of this Agreement, or (ii) when the total amount withdrawn from the Credit Account, plus the amount of any qualified agreement to reimburse made by the Association and of any special commitment -6- entered into by the Association pursuant to Section 5.02 of the General Lnditions, shall have reached the equivalent of SDR 3,960,000 whichever shall be sooner. Withdrawal from the Credit Account and the Fund Loan Account of the remaining amounts of the Credit and the Fund Loan shall follow such procedures as shall be agreed between the Borrower and the Association and shall be made only to the extent that the Association shall be satisfied by the evidence submitted in support of the applica- tions for such withdrawals that all payments by the Borrower out of the Special Account and out of the proceeds of the Credit and the Fund Loan were 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 and the Fund Loan. Section 3.03. (a) When the Borrower shall desire to withdraw any amount of the Credit or the Fnd Loan, the Borrower shall deliver to the Association d aritLen application in such form and containing such statements and agreements as the Association or the Fund shall reasonably request. Applications for withdrawal, with the necessary documentation as hereinafter provided shall, except as the Borrower, the Association and the Fund shall other- wise agree, be made promptly in relation to expenditures for the Project. (b) The Borrower shall furnish to the Association such documenta and other evidence in support of the application as the Association or the Fund shall reasonably request, whether before or after the Association shall have approved any withdrawal requested in the application. (c) Each application and the accompanying documents and other evidence must be sufficient in form and substance to satisfy the Association or he Fund that the Borrower is entitled to withdraw from the Credit Account or the Fund Loan Account the amount applied for and that such amount is to be used only for the purposes of the Project. Section 3.04. Except as otherwise provided in this Section, each such application by the Borrower for withdrawal shall be deemed to be a request to withdraw funds from the Credit Account and from the Fund Loan Account, and the funds to be withdrawn pursuant to such application shall be apportioned by the Associa- tion, as nearly as practicable in the circumstances, between the Credit and the Fund Loan in the ratio of 40:60, or such other ratio as shall be agreed between the Association and the Fund; -7- provided, however, that, in respects of Categories 3 (b) and 4 (b) set forth in the table in paragraph 1 of Schedule 1 to this Agreement or in any other case where an application shall be made in respect of expenditures to be financed out of the proceeds of the Credit only or the Fund Loan only, such application shall be deemed to be a request to withdraw funds from the Credit Account or the Fund Loan Account only, as the case may be. Section 3.05. When the Association shall have approved an application by the Borrower for withdrawal, the Association shall: (i) pay the amount, if any, which the Borrower is entitled to withdraw from the Credit Account to or on the order of the Borrower in accordance with the provisions of the Development Credit Agree- ment; and/or, if called for in the application, (ii) promptly notify the Fund that it has received an application for withdrawal from the Fund Loan Account in the aggregate amount specified in such notice, that it has approved payment of the por- tion, if any, to be withdrawn from the Credit Account in the amount set forth in such notice, and that the portion to be withdrawn from the Fund Loan Account in the amount set forth in such notice is eligible for payment by the Fund. Section 3.06. If at any time the amount of the Credit or the Fund Loan shall have been fully withdrawn or cancelled, applica- tions by the Borrower for further withdrawals shall be deemed to be requested for withdrawal of the full amount applied for from the Credit Account or the Fund Loan Account only, and the provi- sions of this Article III shall continue to apply mutatis mutan- dis until the full amount credited to such Account shall have been withdrawn or cancelled. Section 3.07. Upon the Borrower's request and upon such terms as shall be agreed between the Borrower and the Associa- tion, the Association may, on behalf and for the account of the Fund, enter into special commitments to pay amounts, out of the proceeds of the Fund Loan, to the Borrower or others in respect of the cost of goods required by the Project, subject to the pro- visions of this Agreement concerning the allocation and appor- tionment of the proceeds of the Fund Loan. The Fund has advised -8- the Association that any such special commitment shall, once it has been notified to the Fund, constitute an obligation on the part of the Fund to pay, notwithstanding any subsequent suspen- sion or cancellation of the Fund Loan, the amount to be disbursed out of the proceeds of the Fund Loan in fulfillment of such spe- cial commitment. Section 3.08. Except as the Association and the Fund shall otherwise agree, procurement of the goods and civil works re- quired for the Project and to be financed out of the proceeds of the Credit or the Fund Loan shall be governed by the provisions of Schedule 3 to this Agreement. ARTICLE IV Execution of the Project Section 4.01. The Borrower shall carry out the Project through its Ministry with due diligence and efficiency and in conformity with appropriate administrative, agricultural, engi- neer .ng and financial practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 4.02. In order to assist the Borrower in carrying out the Project, the Borrower shall employ: (i) consultants whose selection, qualifications, experience and terms and conditions of employment shall be satis- factory to the Association in accordance with the principles and procedures described in the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981; and (ii) a Financial Coordinator, an Extension Training Coordi- nator and a Pastoralists Extension Coordinator, each of whom shall meel: such qualifications, experience and terms and conditions of employment, including terms of reference, as shall be satisfactory to the Association, as well as a Technical Coordinator, a Monitoring Coord- inator and a Livestock Integration Coordinator, all qualified aad experienced, and whose terms of reference shall be satisfactory to the Association. - 9 - Section 4.03. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Cr'edit or the Fund Loan 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) The Borrower shall cause all goods and services financed out of the proceeds of the Credit or the Fund Loan to be used exclusively for the purposes of the Project. Section 4.04. (a) The Borrower shall furnish to the Asso- ciation and the Fund, promptly upon their preparation, the plans, specifications, reports, contract documents and work and procuremeat schedules for the Project, and any material modifica- tions thereof or additions thereto, in such detail as the Asso- ciation shall reasonably request. (b) The Borrower: (i) shall 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 the Fund Loan, and to disclose their use in the Project; (ii) shall enable the Association's and the Fund's 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 or the Fund Loan 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 ex- penditure of the proceeds of the Credit and the Fund Loan and the goods and services financed out of such proceeds. (c) Upon the award by the Borrower of any contract for goods, works or services to be financed out of the proceeds of the Credit, the Association may vublish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (d) 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 - 10 - the Association and the Fund, a report, of such scope and in such detail as the Association shall reasonably request, on the execu- tion and initial operation of the Project, its cost and the bene- fits 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 and the Fund Loan. Section 4.05. 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 or rights in respect of land Ps shall be required for carrying out the Project and shall furnish to the Association, promptly after such acquisition, evidence satisfac- tory to the Association that such lani and rights in r3spect of land are available for purposes related to the Project. Section 4.06. The Borrower shall, by June 30, 1984, exchange views with the Association on the Borrower's forecasts of future domestic cotton production and on any measures necessary to en- sure the adequacy of ginning capacity in relation thereto. Section 4.07. (a) The Borrower shall include in the sale prices of agricultural inputs in the Project Area, including veterinary drug supplies but not necessarily other livestock inputs, a margin of at least 7% of the unsubsidized costs there- of. (b) Such costs shall include the amounts attributed to the acquisition and delivery of the inputs as well as to operating costs, including salaries, related to distribution, vaccinations and depreciation of mobile and refrigerating equipment, but ex- cluding any such amounts borne by the Borrower; such costs shall be calculated annually in consultation with the auditors employed under Section 5.01 (c) of this Agreement, beginning in the first year of carrying out the Project. (c) Beginning in the fourth year of carrying out the Proj- ect, the Borrower shall inclu,de, in the sales prices of such in- puts a margin sufficient to ensure the recovery of the entire amounts described in paragraph (b) of this Section. (d) The Borower shall prepare and furnish to the Associa- tion a statement of its policy regarding cost recovery principles to be implemented for seeds and for livestock inputs other than - 11 - veterinary drugs, shall exchange views with the Association con- cerning such policy not later than June 30, 1984 and shall apply such policy from the start of the fourth year of carrying out the Project. Section 4.08. The Borrower shall, at least once each year, until the Project has been completed, exchange views with the Association on the price of agricultural products and on the in- centives to be granted to farmers in the Project Area. Section 4.09. The Borrower shall cause the Livestock Service of the Ministry to assign a qualified Livestock Assistant and five veterinary nurses, in order to assist the ORD in the carry- ing out of the Project. Section 4.10. The Borrower shall furnish to the Association and the Fund as soon as available but not later than March 30 of each year until the year of completion of the Project, proposed annual budgets and work programs for the carrying out of the Project; final budgets and programs shall be furnished to the Association as soon as they are approved by the Board of Direc- tors of the ORD and by the Ministry. Section 4.11. The Borrower shall ensure that the supply service of the ORD supervise in the Project Area the financial management of the distribution and sale of veterinary supplies as well as that of the production and sale of seeds, and that such service ensure the recovery in whole or in part of the costs thereof. Section 4.12. The Borrower shall ensure that the seasonal and medium-term credits granted under Part D of the Project be granted at a rate of interest of at least 11% per annum. ARTICLE V Other Covenants Section 5.01. (a) The Borrower shall maintain and cause to be maintained by the ORD records adequate to reflect in accord- aace with consistently maintained appropriate accounting prac- tices the operations, resources and expenditures, in respect of the Project, of the ORD and of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. - 12 - (b) Without limitation to the foregoing, the Borrower shall: (i) ensure that all operations and accounts with respect to the Project be kept separate from the other operations and accounts of the ORD; (ii) maintain or cause to be maintained by the ORD separate accounts reflecting all expenditures on account of which withdrawals are requested from the Credit Account or the Fund Loan Account on the basis of statements of expenditure; (iii) retain, until one year after the Closing Date, all records (contracts, orders, invoices, bills, receipts and other docu- ments) evidencing the expenditures on account of which with- drawals are requested from the Credit Account or the Fund Loan Account on the basis of statements of expenditure; and (iv) en- able the Association's and the Fund's representatives to examine such accounts and records. (c) The Borrower shall: (i) have the accounts for the Project, including the Special Account and the accounts referred to in paragraph (b) of this Section and shall cause the ORD to have its accounts, including the separate accounts for the supply service and credit service, audited for each fiscal year in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association and the Fund, as soon as avail- able, but in any case not later than six months after the end of each such year, certified copies of the reports of such audits by such auditors, of such scope and in such detail as the Associa- tion shall have reasonably requested, including without limita- tion to the foregoing, a separate opinion by said auditors in respect of the expenditures and records referred to in paragraph (b) (ii) and (iii) of this Section as to whether the proceeds of the Credit withdrawn from the Cre&it Account and the Fund Loan Account on the basis of statements of expenditure were used to make payments for goods received, or works or services performed, and that such goods, works and services were eligible for financ- ing under this Agreement and were used in carrying out the Proj- ect; and (iii) furnish to the Association and the Fund such other information concerning said separate accounts, records and ex- penditures and the audits thereof as the Association shall from time to time reasonably request. Section 5.02. The Borrower shall cause the ORD to reorganize its accounting practices and procedures so that not later than in respect of its fiscal year commencing in 1984 separate accounts will be kept for the supply service and for agricultural credits. - 13 - ARTICLE VI Remedies of the Association Section 6.01. (a) For the purposes of Section 6.02 of the General Conditions, the following additional event is specified pursuant to paragraph (h) thereof, namely, that subject to para- graph (b) of this Section: (i) The right of the Borrower to withdraw the proceeds of any grant or loan, including the Fund Loan, made to the Borrower for the financing of the Project shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing therefor; or (ii) any such loan shall have become due and payable prior to the agreed maturity thereof. (b) Paragraph (a) of this Section shall not apply if the Borrower establishes to the satisfaction of the Association that: (i) such suspension, cancellation, termination or prematuring is not caused by the failure of the Borrower to perform any of its obligations under such agreement; and (ii) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consistent with the obligations of the Borrower under this Agreement. Section 6.02. For the purposes of Section 7.01 of the Gen- eral Conditions, the following additional event is specified pur- suant to paragraph (d) thereof namely, that the event specified in paragraph (a) (ii) of Section 6.01 of this Agreement shall occur, subject to the proviso of paragraph (b) of that Section. ARTICLE VII Effective Date; Termination Section 7.01. 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 Special Account has been opened; - 14 - (b) the Association has been notified by the CCCE, the FAC and the Fund that all conditions for the first disbursement of the CCCE Loans, the FAC Grants and the Fund Loan, except the effectiveness of this Agreement, have been fulfilled; and (c) the Fund has appointed the Association as Cooperating Institution to administer the Fund Loan on terms and conditions acceptable to the Association. Section 7.02. 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 fur- nished to the Association, namely, that the execution and deliv- ery on behalf of the Borrower of the Fund Loan Agreement has been duly authorized or ratified by all necessary governmental action and constitutes a valid and binding obligation of the Borrower in accordance with its terms. Section 7.03. The date c2,is hereby specified for the purposes of Section 12.04 of the General Condi- tions. Section 7.04. The obligations of the Borrower under Article V of this Agreement and the provisions of Section 6.02 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 earlier. Section 7.05. If (i) the Fund Loan Agreement shall have come into force and effect and the DevelopmLnt Credit Agreement shall have failed to come into force and effect by the date specified in Section 7.03 of this Agreement or a later date established by the Association for the purposes of Section 12.04 of the General Conditions, or (ii) the entire principal amount of the Credit withdrawn from the Credit Account and all charges which shall have accrued on the Credit shall have been paid before the Fund Loan Agreement shall have terminated, then, notwithstanding the provisions of Sections 12.04 and 12.05 of the General Conditions, the Development Credit Agreement shall be deemed to be, or to remain, in force and effect, but only to the extent required for the purpose of implementing the Fund Loan Agreement and of orderly settlement of matters of mutual interest to the parties thereunder, subject to such modifications of the Development Credit Agreement as shall be agreed between the Borrower, the Association and the Fund for such purpose. - 15 - Section 7.06. If (i) the Fund Loan Agreement shall terminate in accordance with its terms before the Development Credit Agree- ment shall have terminated, or (ii) the Association shall notify the Borrower that its appointment as Cooperating Institution under the Fund Loan Agreement has terminated, the provisions of this Agreement shall, to the extent that they relate to the Fund Loan, forthwith terminate; provided, however, that in the case described in the foregoing clause (ii), such termination shall apply only to the responsibilities of the Association as such Cooperating Institution. ARTICLE VIII Representatives of the Borrower; Addresses Section 8.01. 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 8.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: 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) - 16 - 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 UPPER VOLTA By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION B yA Regional Vice President Western Africa - 17 - SCHEDULE 1 Withdrawal of the Proceeds of the Credit and of the Fund Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit and of the Fund Loan, the allocation of the amounts of the Credit and the Fund Loan to each Category and the percentage of expenditures for items so to be financed in each t#ategory: Amount )f the Amount of the Fund Loan % of Credit Allocated Allocated Expendi- (Expressed in (Expressed in tures to be Category SOR Equivalent) SDR Equivalent) Financed (1) Construction: (a) Under force 135,000 200,000 60% account for adaptive research, Part A of the Pro- ject and vil- lage groups, - Part C of the Project (b) Undez contract 40,000 55,000 100% (2) Vehicles and equip- ment: (a) For adaptive 15,000 25,000 60% research, Part A of the Pro- ject, village groups, Part C of the Project and monitoring, Part I of the Project - 18 - Amount of the Amount of the Fund Loan % of Credit Allocated Allocated Expendi- (Expressed in (Expressed in tures to be Category SDR Equivalent) SDR Equivalent) Financed (b) Other 115,000 170,000 100% (3) Salaries and opera- ting expenses listed in paragraph 3 (b) of this Schedule: (a) For adaptive 160,000 245,000 60% research, Part A of the Pro- ject, village groups, Part C of the Project and monitoring, Part I of the Project (b) For settled 40,000 nil 100% pastoralists, Part J of the Project (c) Other 945,000 1,330,000 100% (4) Consultants' services, studies, audits, fellowships (a) Aerial surveys 55,000 80,000 60% monitoring, Part I of the Project (b) Other 1,920,000 nil 100% (5) Goods and services 150,000 230,000 60% for projects approved under Part K of the Project - 19 - Amount of the Amount of the Fund Loan % of Credit Allocated Allocated Expendi- (Expressed in (Expressed in tures to be Category SDR Equivalent) SDR Equivalent) Financed (6) Initial deposit 120,000 180,000 in Special Account (7) Unallocated 505,000 285,000 TOTAL 4,200,000 2,800,000 2. The disbursement percentages have been calculated in compli- ance with the policy of the Association and the Fund that no proceeds of the Credit or the Fund Loan 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, manu- facture, 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 Creit or the Fund Loan decreases or increases, the Association way, 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 and the Fund. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawal shall be made in respect of: (a) payments made for expenditures prior to the later of the date of this Agreement or the date of the Fund Loan Agree- ment, except that withdrawals, in an aggregate amount not exceed- ing the equivalent of SDR 300,000 may be made on account of pay- ments made for such expenditures before such later date but after June 30, 1982; or (b) expenditures under Category 3 of the above table, ex- cept for the following salaries and allowances of national con- tractual staff at levels approved by the Borrower under its national policies, and for the following operating expenses, or except as otherwise agreed by the Association: - 20 - (i) Salaries and Allowances A. Extension Service: 119 general extension agents in the first year of the Project, decreasing to 100 by the fifth year; 25 subsector chiefs, decreasing to 10 by the fifth year; 6 typists, 2 drivers; 5 extension coordinators; B. Applied Research: 2 chiefs, 2 shepherds, I watch- man, I enumerator, 3 workmen and 15 man-months per year of casual labor; C. Village Groups: 5 agents, 1 driver and 1 typist; D. Monitoring: 1 controller, 10 enumerators, 2 clerks, 1 typist, 1 driver, 10 man-months per year of temporary staff; E., Regional Training Center: 2 typists, 2 laborers, 1 cook, I messenger, 1 filing clerk, 1 supply clerk, two watchmen; (ii) Operating Expenses, excluding costs of operating vehi- cles and of travel of civil servants: A. Extension Service: training course allowances; B. Applied Research: expenses and costs of research institute; C. Village Groups: expenses of the functional liter- acy program; and D. Regional Training Center: operating costs. 4. Notwithstanding the allocation of an amount of the Credit or the Fund Loan, or the disbursement percentages set forth in the table in paragraph I above, and without limitation upon the pro- visions of Section 3.04 of this Agreement, if the Association has reasonably estimated that the amount of the Credit or the Fund Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Cate- gory, the Association may, by notice to the Borrower: (i) reallo- cate to such Category, to the extent required to meet the esti- mated shortfall, proceeds of the Credit or the Fund Loan which - 21 - are then allocated to another Category and which in the opinion of the Association are not needed to meet other expenditures, provided, however, that no such reallocation of the proceeds of the Fund Loan shall be made to Category 3 (b) or 4 (b); and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such ex- penditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 5. If the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expend- itures for such item shall be financed out of the proceeds of the Credit or the Fund Loan, ani the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement or of the Fund under the Fund Loan Agreement, by notice to the Borrower, cancel such amount of the Credit and/or the Fund Loan as, in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financ- ing out of the proceeds of the Credit and/or the Fund Loan. - 22 - SCHEDULE 2 Description of the Project The Project is intended to continue the improvement of agri- culture ar welfare of farmers, and pastoralists in the Hauts- Bassins . -n by the growth of crop production, the fostering of village groups, and by improving livestock productivity. Entailed in this effort are the continued improvement of extension ser- vices in the Project Area under the training and visit system, provision of infrastructure, credits and other services related to village groups, functional literacy, animal traction, seeds production, adaptive research, the integration of livestock and agriculture, monitoring and studies. The Project consists of the following parts: Part A: Improvement of the agricultural extension service in the Project Area through the continuation of the training and visit system, together with support of services dealing with livestock integration, seeds production, field trials, demonstration plots, and adaptive research, through construction of housing and other buildings, and the acquisition of vehicles and equipment. Part B: Strengthening of services for staff training and extension techniques, covering the needs of agricultural, livestock and livestock extension and of management. Part C: Strengthening of the input supply and credit services to operate through the existing warehouse network through 150 vil- lage warehouses to be constructed by village groups; procurement and distribution of materials to be used in such construction. Part D: Supply of agricultural and livestock inputs and equipment, oxen, animal traction equipment and milling equipment to farmers and livestock owners and provision of seasonal and medium-term credits for their purchase. - 23 - Part E: Sup;ort for animal health services, and encouragement of improved animal production practices and their integration with crop production practices. Part F: Establishment, staffing and equipping of about 200 new vl- lage groups in the Project Area. Part G: Carrying out of a literacy program with the support of the village groups. Part H: Strengthening of ORD headquarters operations through the employment of appi:opriate staff and technical assistance, con- struction of further office accommodation and staff housing, pro- curement of vehicles and training of staff through fellowships and other courses approved by the Association. Part I: Establishment and operation of a monitoring unit for the monitoring and evaluation of the Project, comprising a monitoring coordinator assisted by about ten enumerators and five support staff. Part J: Strengthening of the Livestock Center located at Samoro- . gouan. Part K: The carrying out of such rural development projects, includ- ing a pilot program for migrants, as shall be approved by the Association on the basis of the criteria set forth in Schedule 4 hereto, and of such studies as shall be approved by the Associa- tion. . The Project is expected to be completed by December 31, 1987. 24 SCHEDULE 3 Procurement A. International Competitive Bidding 1. Except as provided in Parts B and D hereof, goods shall be procured under contracts awarded in accordance with procedures consistent with those set forth in the current edition of the "Guidelines for Procurement under World Bank Loans and IDA Cred- its" published by the Bank in March 1977 (hereinafter called the Guidelines), on the basis of international competitive bidding as described in Part A of the Guidelines. 2. For goods to be procured on the basis of international com- petitive 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 niot 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 publication of such notice in order to provide timely notifica- tion 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 remain to be procured on the basis of international competitive bidding. 3. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of international com- petitive 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; (ii) customs duties and other import taxes levied in connection with the importation, or the sales and simi- lar taxes levied in connection with the sale or delivery, pur- suant to the bid, of the goods shall not be taken into account in the evaluation of the bids; and (iii) the cost of inland freight and other expenditures incidental to the delivery of the goods to the place of their use or installation shall be included. - 25 - B. Other Procurement Procedures 1. Civil works contracts estimated at over CFAF 5 million for new sector offices and housing and contracts for the purchase of vehicles and equipment and building materials which, after grouping, are estimated to cost less than CFAF 25 million equiva- lent but more than CFAF 5 million equivalent, may be procured through local competitive bidding under procedures calling for public opening of bids during which the names of each bidder and the amounts of the bids will be announced, such opening to be held at the time and place specified for the delivery of bids in the invitations to bidders. 2. Contracts for civil works and for the purchase of vehicles, equipment and building materials which, after grouping, are estimated to cost less than CFAF 5 million equivalent, may be procured on the basis of competitive quotations solicited domestically. 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 estimated to cost the equivalent of CFAF 25 million 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 furt-er modification to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform the Association of the name of the bidder to which it intends to award the contract and shall furnish to the Associa- tion, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, and such other information as the Association shall reasonably request. The Association shall, if it determines that the intended award would - 26 - be inconsistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. (c) The terms and conditias of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked or prequalification was invited. (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 with- drawal of funds from the Credit Account or the Fund Loan 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 the submission to the Association of the first application for withdrawal of funds from the Credit Account or the Fund Loan 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 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 pro- visions of this Agreement, shall promptly inform the Borrower and state the reasons for its determination. D. Procurement without Contracting The construction of sector training buildings, applied research buildings, village warehouses and maize cribs may be carried out under force account. - 27 - ZCHEDULE 4 Criteria for Selection of projects under Part K of the Project Except as otherwise agreed by the Association, projects to be approved under Part K of the Project shall fall into one of the following two categories. A. Small-scale actions demanded by farmers selected in accord- ance with the following criteria: (a) need as evidenced by a request from potential benefi- ciaries; (b) effective demand as evidenced by a willingness on the part of such beneficiaries to contribute in kind or in cash to the investment; (c) technical feasibility which implies a design simple enough to be realized by local farmers under the technical super- vision of staff of executing agencies; (d) economic efficiency, which is deemed to be atisfied by a minimum economic rate of return of 12% on productive projects and, for infrastructure investments by a design judged to produce the lowest cost per beneficiary; and (e) social acceptability, which means that the ORD must examine proposed projects taking account of the larger social context to ensure their acceptance by target populations. B. Actions complementing the principal Project objectives. These actions would essentially seek to remove possible con- straints to Project execution that may arise, or to improve the efficiency of execution. Examples are (i) a pilot program for migrants; (ii) strengthening the functional literacy program; (iii) improvements in rural radio coverage; and (iv) assistance to remove possible marketing constraints. 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 (5Z day of 198 - FOR SECRETARY