Mali - Mopti Area Development Project : Credit 1597 - Project Agreement - Conformed

OFFIGiAL DOCUMENTS REDIT NUMBER 1597 MLI Project Agreement (Mopti Area Development Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and OPERATION RIZ MOPTI aid OPERATION DEVELOPPEMENT DE L'ELEVAGE MOPTI and INSTITUT D'ECONOMIE RURALE and BANQUE NATIONALE POUR LE DEVELOPPEMENT AGRICOLE Dated , 1985 CREDIT NUMBER 1597 MLI PROJECT AGREEMENT AGREEMENT, dated , 1985, between INTERNATIONAL DEVELOPMENT SOC TION (hereinafter called the Association) and OPERATION RIZ MOPTI (hereinafter called ORM) and OPERATION DEVELOPPEMENT DE L'ELEVAGE MOPTI (hereinafter called ODEM) and INSTITUT D'ECONOMIE RURALE (hereinafter called IER) and BANQUE NATIONALE POUR LE DEVELOPPEMENT AGRICOLE (hereinafter called BNDA). WHEREAS by the Development Credit Agreement of even date herewith between Republic of Mali (hereinafter called the Bor- rower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equiva- lent to nineteen million seven hundred thousand Special Drawing Rights (SDR 19,700,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that ORM, ODEM, IER and BNDA agree to undertake such obligations toward the Association as are hereinafter set forth; WHEREAS (A) by a subsidiary loan agreement to be entered into between the Borrower and BNDA, part of the proceeds of the credit provided for under the Development Credit Agreement will be made available to BNDA on the terms and conditions therein set forth; (B) by two Grant Agreements to be entered into between the Borrower and ORM, and the Borrower and ODEM, respectively, part of the proceeds of the credit provided for under the Development Credit Agreement will be made available to ORM and IER, and to ODEM, on the terms and conditions set forth in these respective Grant Agreements; and WHEREAS ORM, ODEM, IER and BNDA, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, have agreed to undertake the obligations herein- after set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the -2- Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. ORM, ODEM, IER and BNDA declare their commit- ment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement and, to this end, undertake to carry out the following Parts of the Project described in said Schedule with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering, agricultural, livestock, health care and training practices: (a) ORM shall carry out Parts A, F, H.1 and H.4 of the Project; (b) ODEM shall carry out Part B of the Project; (c) ODEM and ORM shall cooperate in carrying out, through the departments and agencies of the Borrower responsible there- for, Parts E.1, E.2, E.3, E.4, G, H.2 and H.3 of the Project; (d) ORM and IER shall cooperate in carrying out Parts D.2 and D.3 of the Project; (e) IER shall carry out Parts D.1 and D.4 of the Project; and (f) BNDA shall carry out Part C and cooperate in carrying out Part H.3 of the Project. Section 2.02. Except as the Association shall otherwise agree, procurement of the goods and works required for the Project and to be financed out of the proceeds of the Credit, and the employment of consultants to assist ORM and ODEM in carrying out the Project shall be governed by the provisions of Schedule 1 to this Agreement. Section 2.03. (a) ORM shall assign a counterpart to the financial controller to be employed by it pursuant to Section II -3- of Schedule 1 to this Agreement, as of the first day of employ- ment of that financial controller, whose responsibilities shall include the training of such counterpart. (b) ORM, ODEM and IER shall employ the necessary staff to carry out their Parts of the Project. (c) The counterpart and staff referred to in paragraphs (a) and (b) of this Section shall have qualifications and experience satisfactory to the Association. Section 2.04. Unless the Association shall otherwise agree, ORM shall, starting with the 1985-86 crop season, progressively reduce its involvement in rice marketing in the Project Area over a per.od of five years, in a manner acceptable to the Associa- tion, with a view to the elimination of all such marketing activities other than those referred to in Section 4.02 (a) of the Development Credit Agreement. Section 2.05. ORM shall: (a) at least once in each year the Project is executed consult with the Association on the staffing levels and operating costs of its extension service, and (b), in the light of the progress of the Project, implement a reorganiza- tion plan acceptable to the Association. Section 2.06. Unless the Association shall otherwise agree, ORM shall: (a) not later than July 1, 1986 adjust its water charges for its fiscal year then commencing to at least CFAF 12,500 per hectare; and (b) not later than March 31 of each year, take steps to adjust its water charges for the following fiscal year to reflect the prevailing inflation rate in Mali during the previous fiscal year as set forth in the Gross Domestic Product Deflator, calculated by the International Monetary Fund for the Borrower, so that they remain positive in real terms. Section 2.07. ORM shall: (a) request full payment before March 31 of water charges for its following fiscal year from users other than traditional farmers in the Project Area; (b) request full payment before March 31 of water charges for the current fiscal year from traditional farmers in the Project Area; and (c) charge its services to farmers, such as threshing and ploughing, at cost price. Section 2.08. ORM shall: (a) set aside the amount of reve- nues from its water charges in excess of its operating costs in an interest-bearing account with a financial institution; and (b) each year where drought or other natural disasters prevent ORM from recovering water charges equal to its operating costs, use the reserve so created to finance its operating costs. Section 2.09. IER shall: (a) prepare a revolving five-year work program and budget and a cost accounting system for rice research at Kogoni and update that plan and budget annually; and (b) not later than June 1 of each year the Project is executed, submit such updated work program and budget to the Association for its approval. Section 2.10. ORM in cooperation with DNGR and DNHE shall: (i) before December 31, 1986 prepare and furnish to the Associa- tion for its agreement an annual flood forecast model of the Niger and Sankarani rivers; and (ii) promptly upon such agreement and based on such model establish and operate monitoring and forecasting units at such places as the Association and ORM shall agree. Section 2.11. In carrying out Part B.1 of the Project, ODEM shall: (a) commission the construction of a number of deep wells equal to the number of APs estimated to be formed, in a manner satisfactory to the Association, at the end of the period ending two years after the Effective Date, (b) enter into management arrangements with each such AP in accordance with a model form, acceptable to the Association, which shall include provisions on the use, operation and management of the storage well to be constructed for that AP's use, and of pasture land serviced by that storage well, and (c) enter into a duly signed working agreement with DNGR and DNHE, respectively, under terms and conditions which shall include delineation of their functions in the construction of the deep wells, storage wells and stock ponds. I Section 2.12. ODEM shall operate its lickstone plant and its assembly plant for handpumps at S&vare only as the operation thereof generates a net profit and if, in respect of each plant, the operation shall not have generated a net profit by Decem- ber 31, 1988 shall use its best efforts to sell such plant, as near as may be, at the then current market value. Section 2.13. For the purposes of Section 2.12 of this Agreement and of Section 4.03 of the Development Credit Agree- ment, the term net profit means net operating revenues, less -5- interest and other charges on debt and less taxes on income, if any, to be paid by ODEM or ORM, as the case may be, on income generated by the plant in question; and net operating revenues means the sum of revenues from the plant in question, less all expenses related to the operation of that plant, including admin- istration, adequate maintenance and provision for depreciation but excluding interest and other charges on debt and taxes. Section 2.14. ODEM shall gradually adjust its abattoir charges so that, from and after June 30, 1988, such charges shall cover all operating expenses of its abattoir in Sevar6, including a provision for depreciation. Section 2.15. In order to carry out Part B.6 of the Project, ODEM shall: (a) establish and thereafter maintain an interest bearing Production Improvement Fund Account in a financial insti- tution, upon terms and conditions acceptable to the Association; and (b) out of this account make grants for minor livestock pro- duction improvements in accordance with the provisions of Sched- ule 2 to this Agreement. Section 2.16. In order to carry out Part C of the Project, BNDA shall provide credit: (a) only in accordance with the provisions of Schedule 3 to this Agreement; and (b) in the case of storage wells only to a beneficiary which: (i) is a duly established AP; and (ii) has entered into management arrangements as referred to in Section 2.11 (b) of this Agreement. Section 2.17. ORM, ODM, IER and BNDA, each insofar as applicable to it, shall carry out the obligations set forth in Sections 9.03, 9.04, 9.05, 9.06, 9.07 and 9.08 of the General Conditions (relating to insurance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition, respectively) in respect of the Project Agreement. Section 2.18. ORM, ODEM, IER and BNDA shall duly perform all their obligations under the OR14 Grant Agreement, the ODEM Grant Agreement, the Subsidiary Loan Agreement, the arrangements between ORM and IER referred to in Section 6.01 (d) of the Devel- opment Credit Agreement and the agreements between ODEM, on the one hand and DNGR and DNHE, respectively, on the other, referred to in Section 2.11 (c) of this Agreement. Except as the Associa- tion shall otherwise agree, ORM, ODEM, IER and BNDA shall not take or concur in any action which would have the effect of -6- amending, abrogating, assigning or waiving any of those agreements, or any provision thereof. Section 2.19. (a) ORM, ODEM, IER and BNDA shall, at the request of the Association, exchange views with the Association with regard to the progress of the Project, the performance of their obligations under this Agreement or any of the arrangements and agreements referred to in Section 2.18 of this Agreement, respectively, and other matters relating to the purposes of the Credit. (b) ORM, ODEM, IER and BNDA shall through the ministries of the Borrower to which they are accountable promptly inform the Association of any condition which interferes or threatens to interfere with the progress of the Project, the accomplishment of the purposes of the Credit, or the performance by ORM, ODEM, IER and BNDA of their obligations under this Agreement or any of the arrangements and agreements referred to in Section 2.18 of this Agreement, as the case may be. ARTICLE III Management and Operations of ORM, ODEM, IER and BNDA Section 3.01. ORM, ODEM, IER and BNDA shall carry on their operations and conduct their affairs in accordance with sound administrative, financial, agricultural and banking practices. Section 3.02. ORM, ODEM,, IER and BNDA shall at all times operate and maintain their plant, machinery, equipment and other property, and from time to time, promptly as needed, make all necessary repairs and renewals thereof, all in accordance with sound engineering, financial and agricultural practices. Section 3.03. ORM, ODEM, IER and BNDA shall take out and maintain with responsible insurers, or make other provisions satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Section 3.04. ODEM shall, not later than July 1, 1986, adopt a new fiscal year starting on July 1 and ending on June 30. -7- ARTICLE IV Financial Covenants Section 4.01. (a) ORM, ODEM and BNDA shall maintain records and accounts adequate to reflect in accordance with consistently maintained appropriate accounting practices their operations and financial condition, including, without limitation to the fore- going, separate accounts reflecting all expenditures on account of which withdrawals are requested from the Credit Account on the basis of statements of expenditure. (b) IER shall maintain separate accounts for the operation of its rice research station at Kogoni and for the SRCCS. (c) ORM, ODEM, IER and BNDA shall retain, until one year after the Closing Date, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing the expenditures on account of which withdrawals are requested from the Credit Account on the basis of statements of expenditure, and shall enable the Association's representatives to examine such records. Section 4.02. ORM, ODEM and BNDA shall: (a) have their accounts, the Special Accounts, the Produc- tion Improvement Fund Account and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (b) furnish to the Association as soon as available, but in any case not later than six mouths after the end of each such year, (i) quarterly progress reports of their operations, (ii) certified copies of their financial statements for such year as so audited, and (iii) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested, including, without limitation to the fore- going, separate opinions by said auditors: (A) on the separate accounts and Special Accounts referred to in Section 4.01 (a) and (b) and in Section 4.02 (a) of this Agreement; (B) in respect of the expenditures and records referred to in Section 4.01 (c) of this Agreement, as to whether the proceeds of the Credit made available to them and withdrawn from the Credit Account on the basis of statements of expenditure have been used for the purpose -8- for which they were provided; and (C) in respect of expenditures made out of the Production Improvement Fund account; and (c) furnish to the Association such other information con- cerning said accounts, financial statements, records and expendi- tures, as well as the audit thereof, as the Association shall from time to time reasonably request. Section 4.03. IER shall furnish to the Association such information concerning its accounts and records as the Associa- tion shall from time to time reasonably request. Section 4.04. Except as the Association shall otherwise agree, BNDA shall not incur any debt, if after the incurrence of such debt the aggregate principal amount of debt of BNDA then incurred and outstanding would be greater than 10 times the equity of BNDA. For the purposes of this Section: (a) the terms "debt" means any indebtedness of BNDA matur- ing by its terms more than one year after the date on which it is originally incurred; (b) debt shall be deemed to be incurred: (i) under a loan contract or agreement or other instrument providing for such debt or for the modification of its terms of payment, on the date of such contract, agreement or instrument; and (ii) under a guaran- tee agreement, on the date the agreement providing for such guarantee has been entered into but only to the extent that the guaranteed debt is outstanding; (c) the term "equity of BNDA" means the sum of the total unimpaired paid-up capital, retained earnings and reserves of BNDA not allocated to cover specific liabilities; and (d) whenever, for the purpose of this Section, it shall be necessary to value in terms of the currency of the Borrower, debt payable in another currency, such valuation shall be made on the basis of the prevailing lawful rate of exchange at which such other currency is, at the time of such valuation, obtainable on the basis of a rate of exchange satisfactory to the Association. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. 9 Section 5.02. (a) This Agreement and all obligations of the Association and of ORM, ODEM, IER and BNDA thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) a date 20 years after the date of this Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify ORM, ODEM, IER and BNDA of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancella- tion or suspension under the General Conditions. ARTICLE VI Miscellaneous Provisions Section 6.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or at such other address as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: 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) - 10 - For ORM: Opération Riz Mopti B.P. 161 Mopti Mali Cable address: ORM Mopti Mali For IER: Institut d'Economie Rurale Avenue Mohammed V Bamako Mali Cable address: IER Bamako Mali For ODEM: Opération Développement de l'Elevage Mopti Mopti Sévaré Mali Cable address: ODEM Mopti Mali For BNDA: Banque Nationale pour le Développement Agricole B.P. 2424 Bamako Mali - 11 - Cable address: BNDA Bamako Section 6.02. (i) Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement by ORM, acting on its own behalf or on behalf of IER, may be taken or executed by its managing director or such other person or persons as ORM shall designate in writing; (ii) any such action to be taken or document to be exe- cuted by ODEM may be taken or executed by its managing director or such other person or persons as ODEM shall designate in writ- ing; and (iii) any such action to be taken or document to be executed by BNDA may be taken or executed by its general manager or such other person or persons as BNDA shall designate in writ- ing; and ORM, ODEM or BNDA shall furnish to the Association sufficient evidence of the authority and the authenticated speci- men signature of each such person. Section 6.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collec- tively but one instrument. - 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, United States of America, as of the day and year first above written. INTERNATIONAL DEVELOPMENT ASSOCIATION By /4/ i 14 9 V4 74 A Regional Vice President Western Africa OPERATION RIZ MOPTI ByA/ 4'>t Authorized Representative INSTITUT D'ECONOMIE RURALE By A /&4I Authorized Representative OPERATION DEVELOPPEMENT DE L'ELEVAGE MOPTI By Authorized Representative BANQUE NATIONALE POUR LE DEVELOPPEMENT AGRICOLE By Authorized Representative - 13 - SCHEDULE 1 Procurement and Consultants' Services Section I. Procurement of Goods and Works Part A. International Competitive Bidding 1. Except as provided in Part D hereof, goods and works shall be procured under coatracts awarded in accordance with procedures consistent with those set forth in Sections I and II of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1985 (the Guidelines). 2. Vehicles and equipment shall be grouped to the extent possible in order to derive maximum benefit from bulk procure- ment. Part B. Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A.1 hereof, goods manufactured in the Republic of Mali may be granted a margin of preference in accordance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraphs 1 through 4 of Appendix 2 thereto. Part C. Preference for Domestic Contractors In the procurement of works in accordance with the proce- dures described in Part A.1 hereof, the Borrower may grant a margin of preference to domestic contractors in accordance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraph 5 of Appendix 2 thereto. Part D. Other Procurement Procedures 1. Contracts for goods which cannot be grouped in packages estimated to cost at least the equivalent of $100,000, and for civil works, may be awarded on the basis of competitive bidding advertised locally in accordance with local procedures acceptable to the Association, provided that such goods and civil works, estimated to cost less than the equivalent of $10,000, may be procured under contracts awarded on the basis of comparison of price quotations solicited from at least two reliable local or - 14 - international suppliers eligible under the Guidelines in accor- dance with procedures acceptable to the Association. 2. Civil works for Part A.1 may, after approval by the Associa- tion, be carried out by force account. Part E. Review by the Association of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract for civil works estimated to cost the equivalent of $200,000 or more and each contract for goods estimated to cost the equivalent of $100,000 or more, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the ORM Special Account or the ODEM Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract required to be furnished to the Association pursuant to said paragraph 2 (d) shall be furnished to the Association prior to the making of the first payment out of the ORM Special Account or the ODEM Special Account in respect of such contract. (b) With respect to each contract not governed by the pre- ceding paragraph, the procedures set forth in paragraphs 3 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the ORM Special Account or the ODEM Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract together with the other information required to be furnished to the Association pursuant to said paragraph 3 shall be furnished to the Association as part of the evidence to be furnished purpuant to paragraph 4 of Schedule 3 (the Special Accounts Schedule) to the Development Credit Agreement. (c) The provisions of the preceding subparagraphs (a) and (b) shall not apply to contracts on account of which the Associa- tion has authorized withdrawals from the Credit Account on the basis of statements of expenditure. Such contracts shall be re- tained in accordance with Section 4.01 (c) of this Agreement. 2. The figure of 10% is hereby specified for purposes of para- graph 4 of Appendix 1 to the Guidelines. - 15 - Section II. Employment of Consultants In order to assist ORM and ODEM in carrying out the Project, ORM and ODEM shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satis- factory to the Association. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association on the basis of the "Guidelines for the Use of Con- sultants by World Bank Borrowers and by the World Bank as Execut- ing Agency" published by the Bank in August 1981. - 16 - SCHEDULE 2 Production Improvement Fund A. Purpose ODEM shall make grants to groups which are either APs or village level groups of livestock owners, for small-scale group investments of a productive nature, (hereinafter called "investments") acceptable to the Association. Such investments include but are not limited to small hydraulic works, slaughter slabs, eradication of noxious weeds, and pasture improvement. B. Eligibility In order to qualify for a grant the group shall submit to ODEM a detailed proposal for the investment, demonstrating its benefits to the group and community as a whole. C. Terms and Conditions 1. The group shall contribute a minimum of 30% of the total cost of the investment, in cash or in kind. ODEM shall con- tribute the remainder as a grant. Any assets thus financed will become the property of the group. 2. ODEM shall retain full documentation of the investments for review and evaluation by the Association in accordance with Section 4.01 of this Agreement. 3. The investments financed by the grants and the relevant documents will be subject to audit in accordance with,Sec- tion 4.02 of this Agreement. D. Approvals 1. Proposed investments whose total estimated costs are less than CFAF 5 million will be subject to ex post review of the Association. 2. Proposed investments whose total estimated costs equal or exceed CFAF 5 million will be submitted to the Association for prior approval. - 17 - E. Modalities 1. The Association shall, at the request of ODEM, withdraw on behalf of the Borrower from the Credit Account under Cate- gory (12) and deposit into the Production Improvement Fund Account an initial deposit in CFAF equivalent to SDR 300,000. 2. Payments out of the Production Improvement Fund Account shall be made exclusively for the reasonable cost of goods and services for eligible investments as described in this Schedule and to be financed out of the proceeds of the Credit allocated from time to time to Category (12), in accordance with the provisions of Schedule 1 to the Develop- ment Credit Agreement. 3. No further deposit shall be made into the Production Improvement Fund Account after total expenditures made out of that account shall have reached the equivalent of SDR 300,000 before ODEM shall have furnished to the Associa- tion in respect of each payment made by ODEM out of that account such documents and other evidence as the Association shall reasonably request, showing that such payment was made for the reasonable cost of eligible investments. Once the Association shall be satisfied that each payment made by ODEM out of the Production Improvement Fund Account was made for the reasonable cost of eligible investments, the Association shall, on the basis of a request of ODEM, once more withdraw from the Credit Account and deposit into the Production Improvement Fund Account an amount in CFAF equivalent to SDR 300,000. Thereafter ODEM shall furnish to the Association in respect of each payment made by ODEM out of that account such documents and other evidence as the Association shall reasonably request, showing that such pay- ment was made for the reasonable cost of eligible invest- ments. 5. If the Association shall have determined at any time that: (a) any payment out of the Production Improvement Fund Account (i) was made for any investment or in any amount not eligible pursuant to this Schedule, or (ii) was not justi- fied by the evidence furnished pursuant to paragraphs 3 and 4 of Part E of this Schedule, ODEM shall, promptly upon - 18 - notice from the Association deposit into that account or, if the Association shall so 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 Production Improve- ment Fund Account will not be required to cover further pay- ments for eligible investments, ODEM shall, promptly upon notice from the Association, and unless otherwise agreed by the Association, refund to the Association such amount then outstanding in that account. - 19 - SCHEDULE 3 BNDA Lending Terms A. Purpose BNDA shall make credits to: (i) individual farmers, live- stock owners, rural artisans and producer groups, for agricul- tural equipment and work oxen; (ii) village level farmers, groups and APs, for village equipment and group investments such as threshers and storage wells, and (iii) individual livestock owners, for productive livestock-related investments. B. Eligibility In order to be eligible for credit, individuals and groups shall meet the requirements of lending policies established by BNDA, to the satisfaction of the Association. C. Terms and Conditions 1. BNDA shall charge an annual interest rate on the amount withdrawn and outstanding under each credit of 10% in the case of credits to individuals and of 9% in the case of credits to a group, or any other rates acceptable to the Association which are in accordance with the prevailing monetary regulations. 2. For credits to individuals for initial purchase of agricul- tural equipment and work oxen, these individuals shall be re- quired to provide at least 10% in cash of the total cost of such inputs financed under such credits. 3. For credits for the purchase of communally owned equipment, APs shall be required to provide at least 20% in cash of the total cost of items financed under such credit. 4. For credits for the purchase of smithing equipment, blacksmiths shall be required to provide at least 20% in cash of the total cost of items financed under such credits. 5. For credits for storage wells, the APs shall be required to provide at least 10% in cash of the total cost of the well. 6. For credits for livestock investments, owners shall be required to provide at least 20% in cash of the total investment cost. - 20 - 7. (a) Credits for: (i) agricultural equipment shall be repaid in equal installments over a period of up to four years; (ii) village equipment shall be repaid in equal installments over a period of not less than four years, but not exceeding seven years; (iii) storage wells shall be repaid in equal installments over a period of not more than ten years; (iv) smithing equipment shall be repaid over a period of not less than 5 years but not exceeding 7 years; and (v) livestock investments shall be repaid over a period not exceeding 5 years. (b) Repayment of the credits referred to in paragraph 7.(a) above shall be made without allowing for a grace period. 8. BNDA shall reserve the right to suspend or terminate access to che use of the proceeds of the credits by borrowers who fail to perform any of their obligations under their respective credit agreements with BNDA. 9. BNDA shall reserve the right to bar from access to credit villages who have defaulted on their guarantee of a loan made to one of their villagers. 10. BNDA shall bear the risk of default on all credits made by it, with the exception of credits for storage wells, where the risk would be divided in accordance with Section 3.04 (d) of the Development Credit 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 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