Benin - Forestry Project : Credit 1505 - Credit Agreement - Conformed

OFFICIAL CREDIT NUMBER 1505 BEN DOCUMENTS Development Credit Agreement (Forestry Project) between PEOPLE'S REPUBLIC OF BENIN and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated 1984 CREDIT NUMBER 1505 BEN DEVELOPMENT CREDIT AGREEMENT AGREEMENT. dated , 1984, between PEOPLE'S REPUBLIC OF BENIN her inafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) the Borrower has requested the Association to assist in the financing of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) the Borrower intends to contract: (i) from Kreditan- stalt fUr Wiederaufbau (hereinafter called KfW) a loan (herein- after called the KfW Loan) in an amount equivalent to three million eight hundred thousand dollars ($3,800,000) to assist in financing part of the Project on the terms and conditions set forth in an agreement (hereinafter called the KfW Loan Agreement) to be entered into between the Borrower and KfW; and (ii) from Deutsche Gesellschaft fHr Technische Zusammenarbeit GmbH (herein- after called GTZ) technical assistance services to assist in the execution of part of the Project, to be provided on the terms and conditions set forth in an agreement (hereinafter called the GTZ Agreement) to be entered into between the Borrower and GTZ; (C) the Borrower has also requested the Association in its capacity as Administrator of the Special Fund established by its Executive Directors by Resolution No. IDA 82-6 of October 26, 1982, to assist in the financing of the same Project by granting a special fund credit (hereinafter called the Special Fund Credit) to the Borrower equivalent to two million six hundred thousand Special Drawing Rights (SDR 2,600,000); and the Associa- tion as such Administrator is willing to grant the Special Fund Credit pursuant to the Special Fund Credit Agreement of even, date herewith between the Borrower and the Association as such Administrator (hereinafter called the Special Fund Credit Agreement); (D) pursuant to an exchange of letters dated April 25, 1983 and July 26, 1983, between the Borrower and the Association, the Association has granted to the Borrower an advance in various currencies equivalent to one hundred fifty thousand dollars ($150,000) (hereinafter called the Project Preparation Advance) for the purpose of assisting the Borrower in the preparation of the Project; and - 2 - 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 (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: (a) "DEFu" means the Direction des Eaux, For8ts et Chasse in the Borrower's MinistAre des Fermes d'Etat, de 'Elevage et de la P&che, or any successor thereto; (b) "DRA" means the Direction de la Recherche Agronomique of the Borrower's Minist4re de 1'Enseignement Supfrieur et la Recherche Scientifiiue, or any successor thereto; (c) "ONAB" means the Office National du Bois, a state society operating under the laws of the Borrower; (d) "CAA" means the Caisse Autonome d'Amortissement, which forms a part of the Borrower's ministry responsible for finance, or any successor thereto; (e) "Special Account A" means the account to be opened and thereafter maintained pursuant to Section 2.02 (c) of this Agreement; (f) "Project Advance Account" means the account to be opened and thereafter maintained pursuant to Section 3.01 (b) of this Agreement; -3- (g) "Project Year" means the twelve-months' period starting July 1 in each year; and (h) "CFA Francs" and "CFAF" mean the Franc de la Communaut6 Financigre Africaine, the common currency of the Borrower and the other members of the West African Monetary Union. 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 equivalent to two million five hundred thousand Special Drawing Rights (SDR 2,500,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Association, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit. (b) 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 thereupon be cancelled. (c) The Borrower shall, for the purposes of Parts A, B, C and E of the Project, open and thereafter maintain in CFAF a Special Account A in CAA on terms and conditions satisfactory to the Association. Deposits into, and payments out of, the Special Account A shall be made in accordance with the provisions of Schedule 4 to this Agreement. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to this Agree- ment. Section 2.04. The Closing Date shall be June 30, 1990 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.05. (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 Borrower from the Credit Account or shall be cancelled. (b) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without restrictions 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 2.06. 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 2.07. Commitment charges and service charges shall be payable semiannually on April 1 and October 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each April 1 and October 1 commencing October 1, 1994, and ending April I- 2034, each installment to and including the installment pay, 1'I on April 1, 2004, to be one-half of one per cent (1/2 of 1%) such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.09. The currency of the Republic of France is hereby specified for the purposes of Section 4.02 of the General Conditions. -5- ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out the Project through DEFC with due diligence and efficiency and in conformity with appropriate administrative, financial, forestry and engi- neering practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Without any limitation or restriction upon any of its obligations under paragraph (a) above, the Borrower shall: (i) for the purposes of the Project, open and thereafter maintain, a Project Advance Account in CAA on terms and conditions satisfac- tory to the Association; and (ii) in addition to the initial deposit of CFAF 32,000,000 referred to in Section 6.01 (b) of this Agreement, deposit every four months in the Project Advance Account an amount equal to the aggregate payments made from the Project Advance Account during the immediately preceding four months; provided, however, that at all times the funds available in the Project Advance Account shall be sufficient to permit a diligent and efficient execution of the Project. Section 3.02. For the purposes of carrying out Part A of the Project, the Borrower shall: (a) establish, not later than six months after the date of this Agreement, and thereafter maintain, an Advisory/Policy Unit within DEFC with functions and responsi- bilities satisfactory to the Association; (b) employ a forest administration specialist as head of such unit and an accountant as DEFC's financial controller in accordance with the provisions of Section 3.03 of this Agreement; and (c) provide the Advisory/ Policy Unit with such funds, facilities, services and other resources as required for the carrying out of its functions. Section 3.03. In order to assist the Borrower in carrying out Parts A and E of the Project, the Borrower shall employ forestry consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association, such consultants to be selected in accordance with principles and procedures satisfactory to the Association on the basis of 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. -6- Section 3.04. For the purposes of carrying out Part B of the Project, the Borrower shall, through DEFC, enter into an agreement with ONAB for the execution of said Part of the Project, on terms and conditions satisfactory to the Association, including, inter alia, that ONAB shall: (a) prepare and submit to DEFC for its approval annual work plans and budgets within five months after the date of this Agreement for the Project Year starting July 1, 1984 and there- after not later than November 30 of each year for the following Project Years; (b) carry out forest clearing, planting and maintenance of the Lama Plantation in accordance with such work plans as approved by DEFC; (c) follow, with respect to the procurement of goods and services required for carrying out its obligations under said agreement, the provisions set forth in Schedule 3 to this Agreement; (d) modify, not later than December 31, 1984, its account- ing system in accounting a manner satisfactory to DEFC; (e) prepare and submit to DEFC quarterly evaluation reports on the progress of the work carried out by ONAB -in accordance with said agreement; and (f) be remunerated by DEFC, taking into account the dispo- sition of revenues accruing from salvage logging. Section 3.05. For the purposes of coordinating the pilot plantations works to be carried out under Part C of the Project, the Borrower shall cause DEFC and DRA to sign a protocol on terms and conditions satisfactory to the Association; such terms and conditions shall specify, inter alia, the planting programs, technical specifications of the plantations and the respective administrative responsibilities of DRA and DEFC. Section 3.06. (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. - 7 - (b) The Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the purposes of the Project. Section 3.07. The Borrower shall, through DEFC, furnish to the Association for its approval: (a) a detailed plan for monitoring the physical opera- tions included in the Project to be prepared by the head of the Advisory/Policy Unit within six months after his or her assump- tion of duties; (b) a detailed plan for monitoring DEFC's financial opera- tions to be prepared by the financial controller of the Advisory/ Policy Unit within three months after his or her assumption of duties; and (c) annual work programs and budgets for the plantations included in the Project, to be submitted within six months after the date of this Agreement for the Project Year starting July 1, 1984, and thereafter not later than December 31 of each year, for the following Project Years. Section 3.08. (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 addi- tions thereto, in such detail as the Association shall reasonably request. (b) The Borrower shall: (i) maintain records and proce- dures 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) enable the Association'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 and any relevant records and documents; and (iii) 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. -8- (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 publish 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 the Association a report, of such scope and in such detail as the Association shall reasonably request, on the execution and ini- tial 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 Devel- opment Credit Agreement and the accomplishment of the purposes of the Credit. Section 3.09. The Borrower shall take or cause to be taken all such action as shall be necessary to acquire as and when needed all such land and rights in respect of land as shall be required for carrying out the Project and shall furnish to the Association, promptly after such acquisition, evidence satis- factory to the Association that such land and rights in respect of land are available for purposes related to the Project. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall, through DEFC, maintain or cause to be maintained records adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) Without limitation to the foregoing, the Borrower shall, through DEFC: (i) maintain or cause to be maintained separate accounts reflecting all expenditures on account of which withdrawals are requested from the Credit Account on the basis of statements of expenditure; (ii) retain, until one year after the Closing Date, alil records (contracts, orders, invoices, bills, receipts and other documents) evidencing the expenditures on account of which withdrawals are requested from the Credit -9- Account on the basis of statements of expenditure; and (iii) enable the Association's representatives to examine such records. (c) The Borrower shall, through DEFC: (i) have the accounts referred to in paragraph (a) of this Section, the Special Account A and the Project Advance Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable 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 report of such audit by such auditors, of such scope and in such detail as the Association shall have reasonably requested, including without limitation to the fore- going, a separate opinion by said auditors in respect of the expenditures and records referred to in paragraph (b) of this Section as to whether the proceeds of the Credit withdrawn from the Credit Account on the basis of statements of expenditure have been used for the purpose for which they were provided; and (iii) furnish to the Association such other information concerning said accounts, records and expenditures and the audit thereof as the Association shall from time to time reasonably request. ARTICLE V Remedies of the Association Section 5.01. (a) For the purposes of Section 6.02 of the General Conditions, the following additional events are 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 pro- ceeds of any grant, loan or credit made to the Borrower (including the Special Fund Credit) 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 or credit 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 - 10 - 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 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified pursuant to paragraph (d) thereof, namely, that the event speci- fied in paragraph (a) (ii) of Section 5.01 of this Agreement shall occur, subject to the proviso of paragraph (b) of that Section. ARTICLE VI Effective Date; Termination Section 6.01, The following events are specified as addi- tional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the Special Account A has been opened in accordance with the provisions of Section 2.02 (c) of this Agreement; (b) the Project Advance Account has been opened in accor- dance with the provisions of Section 3.01 (b) of this Agreement and the Borrower has furnished evidence satisfactory to the Asso- ciation that the initial deposit of CFAF 32,000,000 into the Project Advance Account has been made; (c) KfW and GTZ have notified the Association that all conditions precedent to the effectiveness of the KfW Loan Agree- ment and of the GTZ Agreement have been fulfilled, subject only to the effectiveness of this Agreement if such be the case; and (d) the agreement between DEFC and ONAB referred to in Section 3.04 of this Agreement has been signed. Section 6.02. The date /VOc&M7 r) ' ({?tt , is hereby specified for the purposes of Section 12.04 of the General Conditions. - 11 - ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister of the Borrower at the time responsible for finance 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: Ministry of Finance P.O. Box 302 Cotonou People's Republic of Benin Cable address: Telex: MINIFINANCES MIFIN 5009 or Cotonou 5289 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) - 12 - 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, ULited States of America, as of the day and year first above written. PEOPLE'S REPUBLIC OF BENIN t rized Repiesentative INTERNATIONAL DEVELOPMENT ASSOCIATION By / 4 Regiohal Vice President Western Africa - 13 - SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Vehicles and 190,000 100% equipment under Parts A and C of the Project (2) Operating costs of 10,000 78% DEFC under Part A of the Project (3) Forestry works under 1,330,000 78% Part B of the Project (4) Forestry works under 70,000 78% Part C of the Project (5) Consultants' services 430,000 100% under Parts A and E of the Project (6) Initial deposit in 162,000 Amount due under Special Account A to Section 2.02 (c) prefinance items of this Agreement under Categories (1), (2), (3), (4) and (5) above (7) Refunding of 147,000 Amount due under Project Prepara- Section 2.02 (b) tion Advance of this Agreement (8) Unallocated 161,000 TOTAL 2,500,000 - 14 - 2. For the purposes of this Schedule, the term "forestry works" means the works to be carried out: (a) by ONAB with respect to Part B of the Project in accordance with the agreement between DEFC and ONAB referred to in Section 3.04 of this Agreement; and (b) by the forestry researchers of DRA with respect to Part C of the Project in accordance with the protocol between DEFC and DRA referred to in Section 3.05 of this Agreement. 3. The disbursement percentages have been calculated in com- pliance with the policy of the Association that the proceeds of the Credit shall not 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; on this basis, if the amount of any such taxes levied on or in respect of items in any Category decreases or increases, the Association may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such Category as required to be consistent with the aforemen- tioned policy of the Association. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) expenditures made prior to the date of this Agreement; and (b) payments made for expenditures under Category (4) unless the Association shall have received satisfactory evidence that the protocol between DEFC and DRA referred to in Section 3.05 of this Agreement has been signed. 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 expenditures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expen- ditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. - 15 - 6. 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 expenditure for such item shall be financed out of the proceeds of the Credit, and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as, in the 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. - 16 - SCHEDULE 2 Description of the Project The Project, the main objectives of which are to increase domestic wood supplies and to improve the overall financial and technical management of the Borrower's forestry sub-sector, consists of the following Parts: Part A: Strengthening of DEFC Establishment and operation of an Advisory/Policy Unit within DEFC. Part B: Lama Plantation Establishment and maintenance of a 3,800 ha teak sawlog plantation in the Lama forest reserve. Part C: Pilot Plantations Establishment and maintenance of pilot plantations in about 410 ha of the Toui and Lama forest reserves. Part D: Training Award of training fellowships to forestry officers. Part E: Studies The execution of: (a) studies preparing a strategy for the development of the forestry sector; (b) a study evaluating on-going forestry activities; and (c) feasibility studies for the preparation of future forestry development projects. The Project is expected to be completed by June 30, 1989. - 17 - SCHEDULE 3 Procurement A. Contracts for goods shall be grouped in form and substance satisfactory to the Association so as to encourage competition and to permit bulk procurement consistent with appropriate tech- nical and procurement practices. B. International Competitive Bidding 1. Except as provided in Parts D and F 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 (July 1980 edition) (hereinafter called the Guidelines), on the basis of internation- al 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 not later than 60 days prior to the date of availability to the public of the first tender or prequalification documents relating thereto, as the case may be, a general procurement notice, in such form and detail and containing such information as the Association shall reasonably request; the Association will arrange for the publication of such notice in order to provide timely notifica- tion to prospective bidders of the opportunity to bid for the goods in question. The Borrower shall provide the necessary information to update such notice annually so long as any goods remain to be procured on the basis of international competitive bidding. 3. 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 - 18 - and other expenditures incidental to the delivery of the goods to the place of their use or installation shall be included. C. Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedure described in Part B of this Schedule, goods manufactured in Benin 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 Benin if the bidder shall have established to the satisfaction of the Borrower and the Association that the manufacturing cost of such goods includes a value added in Benin 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 evalu- ated bids shall then be compared with each other, and if, as a result of this comparison, a bid from group A or group B is the lowest, it shall be selected for the award. 4. If, as a result of the comparison under paragraph 3 above, the lowest bid is a bid from group C, all group C bids shall be further compared with the lowest evaluated bid from group A after adding to the evaluated bid price of the imported goods offered in each group C bid, for the purpose of this - 19 - 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 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. D. Other Procurement Procedures 1. Contracts for goods estimated to cost less than $100,000 equivalent but more than $50,000 equivalent each may be awarded on the basis of competitive bidding advertised locally, in accordance with procedures acceptable to the Association. 2. Contracts for goods estimated to cost $50,000 equivalent or less may be awarded after solicitation of quotations from at least three suppliers; provided, however, that the aggregate price of the contracts so awarded shall not exceed $300,000 equivalent. E. 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 documente, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, the Bor- rower shall, before a final decision on the award is made, inform the Association of the name of the bidder to which it intends to award the contract and shall furnish to the Association, in - 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 incon- sistent 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 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 in respect of such con- tract. 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 Association of the first application for withdrawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids, recommendations for award and such other infor- mation as the Association shall reasonably request. The Associa- tion 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. F. Procurement Without Contracting All forestry works under Parts B and C of the Project may be carried out under force account by ONAB and DRA, respectively. - 21 - SCHEDULE 4 Special Account A 1. For the purposes of this Schedule: (a) the term "Category" means a category of items to be financed out of the proceeds of the Credit as set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (b) the term "eligible expenditures" means expenditures in respect of the reasonable cost of goods and services required for Parts A, B, C and E of the Project and to be financed out of the proceeds of the Credit allocated from time to time to Categories (1), (2), (3), (4) and (5) in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "initial deposit" means an amount in CFAF equivalent to SDR 162,000 allocated to Category (6) and to be withdrawn from the Credit Account and deposited in the Special Account A pursuant to the first sentence of paragraph 3 to this Schedule. 2. Payments out of the Special Account A shall be made exclu- sively for eligible expenditures in accordance with the provi- sions of this Schedule. 3. The Association shall, at the request of the Borrower, with- draw on behalf of the Borrower from the Credit Account and depos- it into the Special Account A the initial deposit. Thereafter, and on the basis of requests by the Borrower furnished to the Association at such intervals as the Association shall specify, the Association shall further so withdraw from the Credit Account and deposit into the Special Account A such amounts as shall be required to replenish the Special Account A with amounts equal to payments made out of the Special Account A for eligible expendi- tures, but only to the extent that the amount of any such deposit, together with any amount remaining on deposit in the Special Account A as of the date of such request, shall not exceed in the aggregate the equivalent of the initial deposit. Except as the Association may otherwise agree, each such deposit after the initial deposit shall be withdrawn by the Association from the Credit Account under the respective Categories (1), (2), (3), (4) and (5), and in the respective equivalent amounts, as shall have been justified by the evidence supporting the request - 22 - for such deposit furnished pursuant to paragraph 4 of this Schedule. 4. Prior to or at the time of each request by the Borrower for a deposit by the Association into the Special Account A after the initial deposit, the Borrower shall furnish to the Association in respect of each payment made by the Borrower out of the Special Account A such documents and other evidence as the Association shall reasonably request, showing that such payment was made for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Sched- ule, no further deposit into the Special Account A shall be made by the Association: (a) when the Association shall have deter- mined at any time that all further withdrawals can be made directly by the Borrower from the Credit Account in accordance with the provisions of paragraph (a) of Section 2.02 of this Agreement; or (b) when the total unwithdrawn amount of the Credit allocated to Categories (1), (2), (3), (4) and (5) for Parts A, B, C and E of the Project, minus the amount of any qualified agreement to reimburse made by the Association and of any special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions with respect to Parts A, B, C and E of the Project, shall be equal to the equivalent of twice the amount of the initial deposit, whichever shall be sooner. With- drawal from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to Categories (1), (2), (3), (4) and (5) for Parts A, B, C and E of the Project shall follow such procedures as the Association shall specify by notice to the Borrower and shall, except as the Association shall otherwise agree, be made only after and to the extent the Association shall have been satisfied that all such amounts remaining on deposit in the Special Account A as of the date of such notice have been or will be utilized in making payments for eligible expenditures. 6. If the Association shall have determined at any time that: (a) any payment out of the Special Account A (i) was made for any expenditure or in any amount not eligible pursuant to paragraph 2 of this Schedule, or (ii) was not justified by the evidence furnished pursuant to paragraph 4 of this Schedule, the Borrower shall, promptly upon notice from the Association and, unless otherwise agreed by the Association, prior to any further deposit into the Special Account A by the Association, deposit into the Special Account A or, if the Association shall so - 23 - request, refund to the Association an amount equal to the amount of such payment or the portion thereof not so eligible or justified; or (b) any amount outstanding in the Special Account A will not be required to cover further payments for eligible expendi- tures, the Borrower shall, promptly upon notice from the Associa- tion, and unless otherwise agreed by the Association, refund to the Association such amount then outstanding in the Special Ac- count A. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the day of 198 FOR SECRETARY