Republic Of Burundi - Local Construction Industry Project : Credit 1230 - Credit Agreement - Conformed

OFIIGAL CREDIT NUMBER 1230 BU %)CiJ1T-9T Development Credit Agreement (Local Construction Industry Project) between REPUBLIC OF BURUNDI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated ,1982 CREDIT NUMBER 1230 BU DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated \ , 1982, between REPUBLIC OF BURUNDI (hereinaf er called the Borrower) and INTERNA- TIONAL 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) Part A of the Project will be carried out by the Banque Nationale pour le Developpement Economique S.A.R.L. (hereinafter called BNDE), a company established and operating under the laws of the Borrower, with the Borrower's assistance and, as part of such assistance, the Borrower shall make available to BNDE a part of the proceeds of the Credit as hereinafter provided; 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 June 30, 1980, with the same force and effect as if they were fully set forth herein, subject, however, to the following modifications thereof (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions). (a) The words "Investment Projects and the other Parts of" are inserted immediately preceding the words "the Project" at the end of Section 5.03. (b) Section 6.03 is deleted and replaced by the following new Section: -2- "Section 6.03. Cancellation by the Association. If (a) the right of the Borrower to make withdrawals from the Credit Account shall have been suspended with respect to any amount of the Credit for a continuous period of thirty days, or (b) by the date specified in Section 2.02 (d) of the Project Agreement no applications for approval permitted under paragraph (b) of such Section shall have been received by the Association in respect of any portion of the Credit, or having been so received, shall have been denied or (c) after the Closing Date an amount of the Credit shall remain unwithdrawn from the Credit Account, the Association may, by notice to the Borrower, terminate the right to request such applications or to make withdrawals from the Credit Account, as the case may be, with respect to such amount or portion of the Credit. Upon the giving of such notice such amount or portion of the Credit shall be can- celled." (c) The words "and the Project Agi,eement" are added after the words "the Development Credit Agreement" in Section 6.06; and (d) The words "or the Project Agreement" are added after the words "the Development Credit Agreement" in Section 10.02. 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: (a) "Project Unit" means the unit within the Ministry of the Borrower responsible for public works, energy, and mining created by presidential Decree No. 100/221, dated October 31, 1981. (b) "DETN" means the Direction des Etudes et Travaux Neufs within the Ministry of the Borrower responsible for public works; (c) "Project Agreement" means the agreemeit between the Association and BNDE of even date herewith, as tte same may be amended from time to time, and such term includes all agreements supplemental to the Project Agreement; (d) "Subsidiary Agreement" means the agreement to be entered into between the Borrower and BNDE pursuant to Section 3.01 (b) of -3- this Agreement, as the same may be amended from time to time, and such term includes any schedule to the Subsidiary Agreement; (e) "SOMIBUROM Agreement" means the agreement to be entered into between the Borrower and SOMIBUROM pursuant to Section 4.03 of this Agreement, as the same may be amended from time to time; (f) "Sub-loan" means a loan or credit made or proposed to be made by BNDE to an Investment Enterprise for an Investment Project out of (i) the proceeds of the Credit relent to BNDE and (ii) the line of credit made available to BNDE by the Borrower; (g) "Investment Enterprise" means a construction enterprise, a limekiln promoter or a brick manufacturer to which BNDE proposes to make or has made a Sub-loan, having net fixed assets below Burundi Francs one hundred million (BuF 100,000,000) in 1980 prices, and being unable to obtain financing for the items to be financed under the proposed Sub-loan through commercial bank channels or from parent companies. In the case of construction enterprises such enterprises shall have been established and operated in Burundi for at least three years; (h) "Investment Project" means a specific development project to be carried out by an Investment Enterprise utilizing the proceeds of a Sub-loan; (i) "Burundi Francs" and the letters "BuF" means the currency of the Borrower; (j) "foreign currency" means any currency other than the currency of the Borrower; (k) "Statutes" means the Acte Constitutif of BNDE published in the Official Bulletin of Burundi No. 4/67 of April 1, 1967, as modified to date; (1) "Statement of Policy" means the statement as approved by the Board of Directors of BNDE on June 17, 1977 and as amended by the Board of Directors of BNDE on July 22, 1980, as the same may be amended from time to time in compliance with the provisions of Section 2.08 of the Project Agreement; (m) "Subsidiary" means any company of which a majority of the outstanding voting stock or other proprietary interest is owned or effectively controlled by BNDE or by any one or more -4- subsidiaries of BNDE or by BNDE and one or more of its subsi- diaries; (n) "Project Account" means the account referred to in Section 3.08 (a) of this Agreement which shall be credited with the Borrower's contribution for Parts B, C and D of the Project pursuant to the provisions of Section 3.08 (b) of this Agreement; (o) "BNDE Account" means the account referred to in Section 3.08 (a) of this Agreement which shall be credited with the Borrower's contribution required for Part A of the Project pursuant to the provisions of Section 3.01 (b) (ii) of this Agree- ment; and (p) "Project Preparation Advance" means the project prepara- tion advance granted by the Association to the Borrower pursuant to an exchange of letters dated May 15, 1981 and July 27, 1981 between the Borrower and the Association. 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 four million six hundred thousand Special Drawing Rights (SDR 4,600,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Association as follows: (a) for amounts paid (or, if the Association shall so agree, amounts to be paid) by BNDE to finance the reasonable cost of goods and services required for the Investment Project in respect of which the withdrawal from the Credit Account is re- quested; provided, however, that no withdrawal shall be made in respect of an Investment Project unless the Sub-loan for such Investment Project shall have been approved by the Associa- tion; -5- (b) for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of services required for Parts B, C and D of the Project and to be financed out of the proceeds of the Credit. (c) 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 Project Preparation Advance withdrawn and outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advance shall thereon be cancelled. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods required for the Project shall be governed by the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be June 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 February 15 and August 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each Febru- ary 15 and August 15 commencing August 15, 1992, and ending February 15, 2032, each installment to and including the install- ment payable on February 15, 2002, to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment there- after to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conetions. Section 2.09. The Borrower designates BNDE as its repre- sentative for the purpose of taking any action re, .iired or per- mitted to be taken under Section 2.02 (a) of this Agreement and -6- Article V of the General Conditions regarding the carrying out of Part A of the Project. ARTICLE III Execution of the Project Section 3.01. (a) Without any limitation or restriction upon any of its other obligations under the Agreement, the Borrower shall cause BNDE to perform in accordance with the provisions of the Project Agreement all the obligations therein set forth, shall take or cause to be taken all action necessary or appropriate to enable BNDE to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall under a subsidiary agreement (the Subsidiary Agreement) to be entered into between the Borrower and BNDE on terms and conditions which shall have been approved by the Association: (i) lend the proceeds of the Credit allocated to Part A of the Project and the Borrower's contribu- tion to said Part of the Project on the terms and conditions set forth in Part A of Schedule 4 to this Agreement; and (ii) pay into the BNDE Account the Borrower's contribu- tion referred to in sub-paragraph (i) of this paragraph: (A) an initial deposit of $110,000; (B) by July 31, 1982 an amount equivalent to $110,000; and (C) by January 31, 1983 an amount equivalent to $210,000. (c) Within thirty days of receipt of a notification from BNDE pursuant to Section 2.10 (a) of the Project Agreement, the Borrower shall grant BNDE seventy-five per cent (75%) of the amount of the principal, interest and other charges, if any, with respect to the Sub-loan due to BNDE by the Investment Enterprise in question. (d) The Borrower shall exercise its rights under the Sub- sidiary Agreement in such manner as to protect the interests of the Borrower and the Association and to accomplish the Durposes of the Credit, and except as the Asociation shall otherwise agree, -7- the Borrower shall not assign, amend, abrogate or waive the Subsidiary Agreement or any provision thereof. Section 3.02. (a) The Borrower shall carry out Part B of the Project through the Water and Forest Administration within its Ministry responsible for agriculture and rural development and Parts C and D through its Ministry responsible for public works, energy and mines with due diligence and efficiency and in accor- dance with appropriate financial, administrative and engineering practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) The Project Unit within the Borrower's Ministry respon- sible for public works shall be entrusted with the carrying out of Parts C and D of the Project. The Borrower shall: (i) maintain the Project Unit until at least six months after the Closing Date; and (ii) empower the Project Unit to carry out its responsibilities under paragraph (a) of this Section and under the provisions of Section 3.05 of this Agreement. Section 3.03. (a) In order to assist the Borrower in carrying out Parts B, C and D of the Project, the Borrower shall employ consultants, including a project manager, a lime specialist, a brick specialist, a management specialist, a training specialist, a construction engineer and two construction technicians, whose selection, qualifications, experience and terms and conditions of employment shall be in accordance with principles and procedures satisfactory to the Association on the basis of the "Guidelines fo the Use of Consultants by World Bank Borrowers and the World B,.A as Executing Agency" published by the Bank in August 1981. (b) Without limitation or restriction on the obligation set forth in paragraph (a) of this Section, the Borrower shall: (i) at all times during execution of the Project employ a project manager; (ii) take all measures necessary to ensure that the project manager will at all times be in the position to exercise adequate authority to carry out his responsibilities under his contract of employment; and (iii) consult with the Association prior to any replacement for the position of the project manager. Section 3.04. 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. -8- Section 3.05. (a) The Borrower shall: (i) through the Project Unit maintain records and procedures adequate to record and monitor the progress of Parts B, C and D of the Project (including its cost and the benefits to be derived from it), to identify the goods 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 plantations included in Part B of the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) furnish to the Association through the Project Unit at the end of each quarter during execution of the Project all such information as the Association shall reasonably request concerning Parts B, C and D of the Project, its cost and the expenditure of the proceeds of the Credit and the goods financed out of such proceeds. (b) Upon the award by the Borrower of any contract for goods or services to be financed out of the proceeds of the Credit, the Association may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (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 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. The Borrower shall take all such action as shall be necessary to acquire as and when needed all such land and rights in respect of land as shall be required for carrying out Part B of the Project. Section 3.07. The Borrower shall: (a) ensure that at all times during execution of the Project DETN and the Project Unit are staffed with adequately qualified personnel in appropriate numbers; (b) annually during execution of the Project consult with the Association so as to ensure that the personnel of DETN and the Project Unit will draw maximum benefits from their coopeT ation with the consultants and specialists who assist the Borrower in carrying out Parts C and D of the Project. -9- Section 3.08. (a) The Borrower shall open and maintain during execution of the Project, the Project Account and the BNDE Account in its Central Bank. (b) Without limitation upon the generality of the pro- visions of Section 3.02 of this Agreement, the Borrower shall deposit into the Project Account the amounts required for the carrying of Parts B, C and D of the Project over and above the proceeds of the Credit allocated thereto; such amounts shall be paid into the Project Account by the dates hereinafter specified and shall in any event be not less than: (i) an initial deposit in an amount equivalent to $110,000; (ii) by July 31, 1982 an amount equivalent to $33,000; and (iii) commencing January 31, 1983 four semiannual installments each amounting to not less than the equivalent of $167,000. Section 3.09. The Borrower sha without limitation upon the generality of the provisions of Section 3.03 (a) of this Section: (a) not later than December 31, 1982, or such other date as the Borrower and the Association shall agree, furnish to the Association for its review and approval proposals for feasi- bility studies (together with detailed terms of reference) to be carried out under Part C (i) of the Project; and (b) promptly after such approval implement said studies in accordance with terms of reference as approved by the Association. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records and accounts adequate to reflect in accor- dance with consistently maintained appropriate accounting prac- tices the operations, resources and expenditures, in respect of Parts B, C and D of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall: (i) have the accounts referred to in paragraph (a) of this Section and the Project Account 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, the report of such audit by said auditors, e 10 of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning the accounts and the audit thereof as the Association shall from time to time reasonably request. Section 4.02. The Borrower shall take out and maintain with responsible insurers, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 4.03. (a) The Borrower shall enter into an agreement with SOMIBUROM (the SOMIBUROM Agreement) on terms and conditions acceptable to the Association including, inter alia, the require- ment that: (i) SOMIBUROM shall supply to each limekiln financed out of the proceeds of the Credit at least 4,500 tons of limestone per annum from the date of start of operations of any such lime- kiln; and (ii) the price to be charged for the limestone supplied to each such limekiln shall be sufficient: (A) to cover at least SOMIBUROM's direct costs of production and an appropriate share of its management, general and administrative costs; and (B) to generate a 12% return before taxes of the value of the assets used for such production including provisions for necessary working capital. (b) For the purposes of paragraph (a) of this Section: (i) "direct costs of production" means all direct operating and maintenance expenses including but not limited to expenses for labor, fuel, materials, spares and depreciation on the fixed assets used to produce the limestone to be supplied to the lime- kilns to be financed under this Project; (ii) the share of manage- ment, general and administrative costs to be covered by the price charged for limestone shall be determined in accordance with financing practices generally acceptable in the mining sector and in accordance with generally acceptable accounting principles; (iii) the value of the assets used for the production of limestone shall be determined in accordance with generally acceptable accounting principles and shall take into account provisions for previous revaluations of the assets to reflect changes in current prices for such assets. (c) The Borrower and the Association shall, annually, review and exchange views on the prices charged by SOMIBUROM for lime- stone supplied to limekilns. Section 4.,4. (a) The Borrower shall, within six months from the Effective Date of this Agreement, enter into agreements with brickmakers by which: - 11 - (i) brickmakers shall be entitled to exploit under terms and conditions satisfactory to the Asso- ciation, the quarry of Kamenge for a period of up to two years from the date of such agreement; and (ii) such brickmakers shall be required: (A) to produce bricks of single standardized format; and (B) to exploit the quarry in accordance with a method which will be determined by the Project Unit. (b) The Borrower shall, not later than June 30, 1984, exchange views with the Association on the exploitation of the quarry of Kamenge or other quarry acceptable to the Association for purposes of determining the terms and conditions on which the brickmakers will continue the exploitation of said quarry. Section 4.05. The Borrower shall: (i) maintain, harvest and replant the plantations of eucalyptus trees established under Part B-of the Project in accordance with appropriate forestry practices and as required for a continuing supply of fuel wood to the limekilns financed out of the proceeds of the Credit; and (ii) make the wood produced by such plantations exclusively available to said limekilns at prices which shall cover the full investment, operation and maintenance costs of the plantations. Such prices shall be reviewed, annually by the Borrower and the Association. Section 4.06. During the last quarter of 1983 and annually thereafter the Borrower shall review and consult with the Asso- ciation whether it is advisable for the Borrower to levy taxes, royalty fees or any other impositions on the owners of limekilns financed under the Project for the use of limestone or on SOMIBUROM for the exploitation of such limestone and, if applic- able, at which rate such taxes, royalty fees or any other imposi- tions should be levied. 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: - 12 - (a) BNDE shall have failed to perform any covenant, agree- ment or obligation of BNDE under the Project Agreement; (b) an extraordinary situation shall have arisen which shall make it improbable that BNDE will be able to perform its obliga- tions under the Project Agreement; (c) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of BNDE or for the suspension of its operations; (d) BNDE shall be unable to pay its debts as they mature or any action or proceeding shall have been undertaken whereby any of the property of BNDE shall or may be distributed among its creditors; (e) any part of the principal amount of any loan to BNDE having an original maturity of one year or more shall, in accor- dance with its terms, have become due and payable in advance of maturity, as provided in the relative contractual instruments, or any security for any such loan shall have become enforceable; (f) a Subsidiary or any other entity shall have been created or acquired or taken over by BNDE, if such creation, acquisition or taking over would adversely affect the conduct of its manage- ment and personnel or the carrying out of Part A of the Project; and (g) a representation made by BNDE in or pursuant to the Project Agreement, or any statement furnished in connection therewith, and intended to be relied upon by the Association in making the Loan, shall have been incorrect in any material respect. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (d) thereof: (a) any event specified in paragraph (a) or (f) of Section 5.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Association to the Borrower; and (b) any event specified in paragraph (c), (d) or (e) of Section 5.01 of this Agreement shall occur. - 13 - 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) that the Subsidiary Agreement has been executed by the Borrower and BNDE in compliance with the provisions of Section 3.01 (b) of this Agreement; (b) that the SOMIBUROM Agreement has been executed by the Borrower and SOMIBUROM in compliance with the provisions of Section 4.03 (a) of this Agreement; (c) that SOMIBUROM shall have furnished to the Association a program satisfactory to the Association for the development and exploitation of the lime deposits which shall be used to supply limestone to the limekilns financed under the Project; (d) the initial deposit in an amount equivalent to $110,000 has been paid by the Borrower into the Project Account pursuant to the provisions of Section 3.08 (b) of this Agreement; and (e) the initial deposit in an amount equivalent to $110,000 has been paid into the BNDE Account pursuant to the provisions of Section 3.01 (b) (ii) (A) of this Agreement. Section 6.02. The following are specified as additional matters, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association: (a) the Project Agreement has been duly authorized or ratified by BNDE and is legally binding upon BNDE in accordance with its terms; (b) the Subsidiary Agreement has been duly authorized by the Borrower and BNDE in compliance with the provisions of Section 3.01 (b) of this Agreement, and is legally binding upon the Borrower and BNDE in accordance with its terms; and - 14 - (c) the SOMIBURUM Agreement has been duly authorized by the Borrower and SOMIBURUM in compliance with the provisions of Section 4.03 of this Agreement, and is legally binding upon the Borrower and SOMIBUROM in accordance with its terms. Section 6.03. The date is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.04. The obligations of the Borrower under Sec- tion 5.02 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date 20 years after the date of this Agreement, whichever shall be the earlier. ARTICLE VII Representatives of the Borrower; Addresses Section 7.01. The Ministry responsible for public works, energy and mines of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministere des Travaux Publics de l'Energie et des Mines B.P. 745 Bujumbura Burundi Telex: BDI 48 For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America - 15 - 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 BURUNDI By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regio+nalVice President Eastern Africa - 16 - 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 SDR Equivalent) to be Financed (1) Sub-loans for limekiln 280,000 onstruction under Part A (i) of the Project: (i) directly 100% of foreign imported expenditures equipment (ii) previously 75% of local imported and expenditures locally pro- cured equip- ment (iii) civil works 65% (2) Sub-loans to brick- 110,000 makers under Part A (ii) of the Project (i) directly 100% of foreign imported expenditures equipment (ii) previously 75% of local imported expenditures equipment (iii) civil works 65% - 17 - Amount of the Credit Ailocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (3) Sub-loans to construc- 1,700,000 tion companies under Part A (iii) of the Project: (i) directly 100% of foreign imported expenditures equipment (ii) previously 75% of local imported expenditures equipment (4) Consultant services 1,360,000 100% of foreign under Part D of the and 50% of lo- Project including the cal expendi- auditing required under tures Section 4.01 (b) of this Agreement (5) Studies under Part C 480,000 100% of foreign of the Project expenditures and 80% of local expendi- tures (6) Equipment for the 200,000 100% of foreign Project Unit and expenditures operating costs of and 80% of the Project Unit local expendi- tures (7) Refunding of the Project 270,000 Amount due at Preparation Advance Effective Date (8) Unallocated 200,000 TOTAL 4,600,000 - 18 - 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower; 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. 3. The disbursement percentages have been calculated in com- pliance with the policy of the Association that no proceeds of the Credit shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Credit decreases or increases, the Association may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Association. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expendi- tures prior to April 13, 1982. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in para- graph 1 above, if the Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Association may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to another Category and which in the opinion of the Association are not needed to meet other expendi- tures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with - 19 - 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 Associa- tion's reasonable opinion, represents the amount of such expendi- tures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 20 - SCHEDULE 2 Description of the Project Part A: Credit Program (i) Sub-loans to finance the construction of two limekilns, each with a production capacity of 2,500 tons of lime per annum, one of which will be located in the area of Bujumbura and the other in the Mosso area; (ii) A Sub-loan program to finance the purchase of equipment needed by brickmakers such as mixers and molds and to finance the construction of shelters for bricks; and (iii) A Sub-loan program to finance the purchase of equipment needed by construction companies. Part B: Afforestation Plantation of eucalyptus trees on about 37.5 ha per annum for a period of 7 years commencing in April 1982 in the area of Bujumbura and Mosso to supply the aforementioned kilns with fuel wood. Part C: Studies (i) A program of feasibility studies on expanding the production of construction materials and tools, improving the availability and price of imported construction materials and strengthening the Borrower's construction industry; and (ii) Additional studies to prepare a subsequent project to develop the construction industry of the Borrower. Part D: Technical Assistance (i) Provision of technical assistance to promoters of limekilns, brickmakers and contractors in the preparation of requests for Sub-loans; - 21 - (ii) Provision of technical assistance to promoters of limekilns to be financed under Part A (i) above to ensure the proper construction and satisfactory op2ration of such limekilns and to promote the use of limekilns in the building industry; (iii) Provision of technical assistance to brickmakers to improve production methods and the management of brick producing enterprises; (iv) Provision of technical assistance to contractors regarding the use of materials, construction techniques, including assistance in the carrying out of a limited number of contracts; (v) Training of Burundian plumbers, carpenters and masons; (vi) On-the-job training for DETN staff on the procure- ment of civil work contracts and supervision of the carrying out of such contracts; and (vii) Provision of technical assistance to DETN for the preparation of a document specifying norms and procedures for the use of construction materials and specifying construction methods to be used in the sector. The Project is expected to be completed by December 31, 1984. - 22 - SCHEDULE 3 Procurement A. Goods to be purchased for the Project Unit shall be procured under contracts awarded in accordance with procedures acceptable to the Association on the basis of competitive bidding advertised locally. Foreign firms, even if not locally represented, shall be entitled to participate in the bidding. B. 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 $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, to- gether with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, the Bor- rower shall, before a final decision on the award is made, inform the Association of the name of the bidder to which it intends to award the contract and shall furnish to the Association, in sufficient time fo: 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 the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract. - 23 - 2. With respect to each contract not governed by the preceding paragraph, the Borrower shall furnish to the Association, promptly after its execution and prior to the submission to the Associa- tion of the first application for withdrawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids, recommendations for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. 3. Before agreeing to any material modification or waiver of the terms and conditions of a contract, or granting an 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 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. - 24 - SCHEDULE 4 Lending Arrangements under the Subsidiary Agreement and Financial Terms and Conditions of Sub-loans A. Lending Arrangements under the Subsidiary Agreement 1. Term: maximum 15 years including a grace period not exceeding five years. 2. Foreign exchange risk: borne by the Borrower. 3. Interest: 4 percentage points below the interest rate applicable for Sub-loans. B. Financial Terms and Conditions of Sub-loans 1. Sub-Loan limit: equivalent to $400,000 in Burundi Francs for a single Investment Project but not more than 75% of the total investment costs of any Investment Project carried out under the Project. A single Investment Enterprise shall not receive Sub-loans exceeding the equivalent of $400,000 in the aggregate. 2. Maturities: as provided in Section 2.02 (c) of the Project Agreement. 3. Interest: 12% per annum on the outstanding principal amount or such other interest rate as shall be agreed upon by the Borrower, the Association and BNDE pursuant to Section 2.12 (b) of the Project Agreement. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of-the original in the archives of the Interna- tional Develop&ent Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the I Lday of 198. FOR SECRETARY