Burkina Faso - Fertilizer Project : Credit 1550 - Credit Agreement - Conformed

OFFICIAl" CREDIT NUMBER 1550 BUR DOCUMENTS Development Credit Agreement (Fertilizer Project) between BURKINA FASO and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1985 CREDIT NUMBER 1550 BUR DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated A 1r I , 1985, between BURKINA FASO (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) the Borrower has requested the Association to assist in the financing of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) the Borrower intends to contract from the French Republic through the Fonds d'Aide et de Coop6ration (hereinafter called FAC) a grant (hereinafter called the FAC Grant) in an amount of 16,000,000 French francs to assist in financing part of the Project on the terms and conditions set forth in an agreement (hereinafter called the FAC Grant Agreement) to be entered into between the Borrower and FAC; (C) the Borrower intends to contract from the French Republic through the Caisse Centrale de Cooperation Economique (hereinafter called CCCE) a loan (hereinafter called the CCCE Loan) in an amount of 30,000,000 French francs to assist in financing part of the Project on the terms and conditions set forth in an agreement (hereinafter called the CCCE Loan Agreement) to be entered into between the Borrower and CCCE; (D) the Borrower also intends to contract from the Kingdom of the Netherlands through the Directoraat Generaal voor Inter- nationale Samenwerking a grant (hereinafter called the Dutch Grant) in an amount up to 7,500,000 guilders to assist in financing part of the Project on the terms and conditions set forth in an agreement (hereinafter called the Dutch Grant Agreement) to be entered into between the Borrower and the Netherlands; 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 -2- 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) "Service" means the Service des Intrants Agricoles of the Ministry of the Borrower responsible for agriculture and animal husbandry; (b) "CNCA" means the Caisse Nationale de Crfdit Agricole, the agricultural credit bank of the Borrower established under Decree No. 313-79/PRES/DR of August 14, 1979; (c) "Directorate" means the Directorate of Management Control of the Ministry of the Borrower responsible for agriculture and animal husbandry; (d) "IVRAZ" means the Institut de Recherches Agronomigues et Zootechniques of the Borrower; (e) "Ministry" means the Ministry of the Borrower responsible for agriculture and animal husbandry; (f) "ORDs" means the Borrower's Organismes R6gionaux de D6veloppement or such other entities by which the Organismes R6gionaux de D6veloppement may be replaced; (g) "Project Preparation Advance" means the project pre- paration advance granted by the Association to the Borrower pursuant to an exchange of letters dated July 22, 1983 and August 4, 1983, between the Borrower and the Association; (h) "SOFITEX" means the Soclft6 Burkinaba des Fibres Textiles, a Soci6t6 d'Economie Mixte established pursuant to Decree No. 79/DR/CODIM/MF of August 31, 1979; -3- (i) "Special Account" means the account referred to in Section 2.02 (c) of this Agreement; (j) "CFAF" means the currency of the Borrower; (k) "Crop Year" means the period from April 1 in the given year to March 31 of the following year; and (1) "Project Coordination Unit" means the unit to be estab- lished pursuant to Section 3.01 (b) of this Agreement. ARTICLE I 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 curren- cies equivalent to thirteen million eight hundred thousand Special Drawing Rights (SDR 13,800,000). 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 prin- cipal amount of the Project Preparation Advance withdrawn and outstanding as of such date and to pay all unpaid charges there- on. The unwithdrawn balance of the authorized amount of the Project Preparation Advance shall thereupon be cancelled. (c) The Borrower shall, for the purposes of the Project, open and maintain in CFAF a special account in a commercial bank on terms and conditions satisfactory to the Association. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 4 to this Agreement. -4- 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 December 31, 1991 or such later date as the Association shall establish. The Associa- tion 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 Agreement 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 desigiated 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 April 1, 1995, and ending October 1, 2034, each installment to and including the installment payable on October 1, 2004, to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. -5- Section 2.09. The currency of the French Republic is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement and, to this end, shall carry out the Project through the Ministry, IVRAZ, CNCA, and SOFITEX with due diligence and efficiency and in conformity with appropriate technical, administrative, financial and economic practices, and shall provide, promptly as needed, the funds, facilities, services, staff and other resources required for the purpose. (b) The Borrower shall establish, and thereafter maintain, a Project Coordination Unit within the Ministry for the purpose of administering, coordinating and monitoring the Project. Said Unit shall be headed by a Project Coordinator, whose qualifica- tions and experience shall be acceptable to the Association, and shall comprise a suitably qualified accountant and such other support staff as may be required. In addition, said Unit shall be provided with such resources by the Service as shall be necessary for the proper execution of its duties. Section 3.02. In order to assist the Borrower in carrying out the Project, the Borrower shall employ consultants and experts whose selection, qualifications, experience and terms and conditions of employment shall be satisfactory to the Associa- tion. The consultants and experts to be financed out of the proceeds of the Credit shall be employed in accordance with principles and procedures described in the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. Section 3.03. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit against hazards inci- dent 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. -6- (b) The Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the Project. Section 3.04. (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: (i) shall maintain records and procedures adequate to record and monitor the progress of the Project (including its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Credit, and to disclose their use in the Project; (ii) shall enable the Association's representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish to the Association at regular intervals all such information as the Association shall reasonably request concerning the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. (c) 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, through the Project Coordination Unit, prepare and furnish to the Association a report, of such scope and in such detail as the Association shall reasonably request, on the execution and initial operation of the Project, its cost and the benefits derived and to be derived from it, the performance by the Borrower and the Association of their respective obligations under the Development Credit Agreement and the accomplishment of the purposes of the Credit. -7. Section 3.05. The Borrower, acting through CNCA, shall provide credit under Part E of the Project. Such credit shall be provided on terms and conditions and in accordance with proce- dures satisfactory to the Association. Section 3.06. (a) The Borrower shall apply uniform rates of subsidy, expressed as a percentage of the SOFITEX ex-warehouse cost, to sales of cotton and cereals fertilizer, including domestically produced rock phosphate. (b) The Borrower undertakes to reduce subsidies for cotton and cereals fertilizer in accordance with a schedule of reduction satisfactory to the Association. Section 3.07. The Borrower shall cause the ORDs and other public agencies involved in the distribution of fertilizer under the Project to include in the sale prices of fertilizer a margin sufficient to cover at least their costs incurred in, and directly attributable to, the acquisition and distribution of fertilizer. Such margin shall be reviewed annually as part of the consultations referred to in paragraph (a) of Section 3.09 of this Agreement. Section 3.08. The Borrower, acting through the Project Coordination Unit, shall furnish to the Association: (i) until completion of the Project, as soon as possible after the close of each crop season and in time for submission to the annual consultations referred to in paragraph (a) of Section 3.09 of this Agreement, an interim report evaluating the results of the past crop season together with draft work programs for the next crop season; and (ii) not later than May 15 of each year until completion of the Project, an annual report as of March 31 of such year setting forth the final results of the past crop season together with the work programs for the next crop season as approved by the Ministry. Section 3.09. (a) The Borrower and the Association shall consult with each other in the course of the months of November or December of each year until completion of the Project: (i) to review project results during the past crop season in light of the objectives set forth in Schedule 2 to this Agreement; (ii) to agree, subject to the provisions of Section 3.06, on the fertili- zer prices to farmers to be announced before the end of such year; and (iii) to discuss work programs for the next crop season. -8- (b) The Borrower and the Association shall consult with each other annually before the month of August until the comple- tion of the Project, to determine the quantities of fertilizer to be imported for cereal cultivation during the next crop season and to be partly financed under the Project. Section 3.10. The Borrower shall cause SOFITEX to stock and offer for sale in its wholesale fertilizer outlets adequate amounts of domestically produced rock phosphate. Section 3.11. The Borrower shall forward to the Association the feasibility study referred to in Part D (1) of the Project as soon as available but in any event not later than August 31, 1985. If the outcome of said study is deemed satisfactory by the Borrower and the Association, the Borrower shall provide the Association, by December 31, 1985 at the latest, with an action plan satisfactory to the Association. The Borrower shall carry out Part D (2) of the Project in accordance with the action plan approved by the Association. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained separate records and accounts 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 and shall cause the Project Coordination Unit to maintain consolidated accounts for all parts of the Project. (b) Without limitation to the foregoing, the Borrower shall: (i) ensure that all operations and accounts of the Service, CNCA, the Directorate, IVRAZ, the ORDs and SOFITEX relating to the Project be kept separate from their other opera- tions and accounts; (ii) 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; (iii) 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 (iv) enable the Association's representatives to examine such records. -9- (c) The Borrower shall: (i) have the accounts referred to in paragraphs (a) and (b) of this Section 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 foregoing, a separate opinion by said auditors in respect of the expenditures and records referred to in paragraph (b) (iii) 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 paragraph (b) of this Section: (i) the right of the Borrower to withdraw the proceeds of the FAC Grant, the CCCE Loan or the Dutch Grant shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreements providing therefor; or (ii) the CCCE Loan shall have become due and payable prior to the agreed maturity thereof. (b) Paragraph (a) of this Section shall not apply if the Borrower establishes to the satisfaction of the Association that: (i) such suspension, cancellation, termination or prematuring is not caused by the failure of the Borrower to perform any of its obligations under such agreement; and (ii) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consistent with the obligations of the Borrower under this Agreement. - 10 - 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 Association has been notified by the Fonds d'Aide et de Coop6ration that all conditions precedent to the first disbursement of its grant to the Borrower for the Project, except for the effectiveness of this Agreement, have been fulfilled; (b) the Association has been notified by the Caisse Centrale de Cooperation Economique that all conditions precedent to the first disbursement of its loan to the Borrower for the Project, except for the effectiveness of this Agreement, have been fulfilled; (c) the Association has been notified by the Directoraat Generaal voor Internationale Samenwerking that all conditions precedent to the first disbursement of its grant to the Borrower for the Project, except for the effectiveness of this Agreement, have been fulfilled; (d) the Special Account has been opened pursuant to Section 2.02 (c) of this Agreement; and (e) the Project Coordination Unit has been established and a Project Coordinator has been appointed pursuant to Section 3.01 (b) of this Agreement. Section 6.02. The date is hereby specified for the purposes of Section 12.04 of the General Con- ditions. - 11 - Section 6.03. The provisions of Section 5.02 of this Agree- ment shall cease and determine on the date on which the Develop- ment Credit Agreement shall terminate or on a date twenty years after the date of this Agreement, whichever shall be the earlier. ARTICLE VII Representatives of the Borrower; Addresses Section 7.01. The Minister of the Borrower responsible for financial resources 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 Ressources Financiares Ouagadougou Burkina Cable address: Telex: MINIFINANCE 5256 Ouagadougou MIFICOM 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) 64145 (WUI) or 197688 (TRT) - 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. BURKINA FASO By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By jWttz Regional 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 360,000 100% equipment for Parts B (except for meteorological stations and test equipment), G and H of the Project (2) Fertilizer under Part A of the Project: (a) Crop Years 1984 1,600,000 ) through 1986 ) ) 100% (b) Subsequent 300,000 ) Crop Years ) (3) Credits under 900,000 100% Part E of the Project (4) Incremental 1,600,000 100% operating costs for Parts B and G of the Project - 14 - Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (5) Consultants' 700,000 100% and experts' services for Parts G and H of the Project and training (6) Studies 500,000 100% (7) Part D of the Project (a) civil works 1,300,000 100% (b) vehicles and 1,900,000 100% equipment (c) consultants' 400,000 100% and experts' services (d) working 2,100,000 75% capital (8) Refunding of 500,000 Amount due under Project Prep- Section 2.02 (b) aration Advance (9) Special Account 200,000 Amounts to be deposited pur- suant to para- graph 3 (a) of Schedule 4 to this Agreement (10) Unallocated 1,440,000 TOTAL 13,800,000 - 15 - For the purposes of this Schedule, "incremental operating costs" means operating costs incurred specifically for the execution of the Project. 2. 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; to that end, if the amount of any such taxes levied on or in respect of items in any Category decreases or in- creases, 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 aforementioned policy of the Association. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of SDR 1,100,000, may be made in respect of Sub-category (2) (a) on account of payments made for expenditures before that date but after November 1, 1983; (b) Sub-category (2) (b) until the Borrower and the Association shall have agreed on a schedule to further reduce fertilizer subsidies after Crop Year 1986; and (c) Category (7) until the Association shall have approved the conclusions of the feasibility study and the action plan referred to in Part D (1) of the Project. 4. 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 - 16 - 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. 5. If the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expen- diture 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 Bor- rower, cancel such amount of the Credit as, in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 17 - SCHEDULE 2 Description of the Project The objectives of the Project are to improve the patterns of fertilizer use for food crops through a gradual reduction and ultimate elimination of subsidies and other distortions and to identify and introduce better and cheaper types of fertilizer for cereal cultivation. The Project consists of the following: Part A: Fertilizer Imports Importation by SOFITEX of fertilizer for cereal cultivation. Part B: Field Trials Field trials, including the installation and operation of agro-meteorological stations, to be conducted by IVRAZ in accordance with a five-year program to test and identify various types of fertilizer for cereal cultivation in different climatic and ecological zones. Part C: Rock Phosphate Production and Promotion Production of rock phosphate from domestic sources, improvement of its quality through granulation and other means, and promotion of its application. Part D: Fertilizer Production Unit (1) Preparation of a feasibility study and an action plan for the construction and operation of a fertilizer production unit. (2) Subject to the Association's approval of the conclusions of the feasibility study and of the action plan described in Part D (1) above, construction and operation of the fertilizer production unit. Part E: Credit (1) Extension of credit to farmers and village groups for the purchase of fertilizer for cereal cultivation as - 18 - follows: (i) short-term credit through all ORDs except the ORDs of Bougouriba, Hauts-Bassins and Volta Noire; and (ii) medium-term credit for rock phosphate base dressings through all ORDs. (2) Extension of Credit to agricultural cooperatives for the purchase of fertilizer for cereal cultivation as follows: (i) short-term credit; and (ii) medium-term credit for rock phosphate base dressings. Part F: Service des Intrants Agricoles (1) Coordination of estimated requirements, orders, supplies and distribution of fertilizer and other agricultural inputs. (2) Preparation of study proposals, execution of studies and preparation and supervision of the implementation of policy measures concerning fertilizer and other agricultural inputs. Part G: Training of Accountants Training by the Directorate of ORD and other public- sector accountants, formulation of a uniform accounting system for ORDs and guidance and supervision of ORD accountants in applying the system. Part H: Ministry of Planning and Popular Development Strengthening of the investment programming and monitoring functions of the Borrower's Ministry of Planning and Popular Development through the introduction of automation and related staff training. The Project is expected to be completed by June 30, 1991. - 19 - SCHEDULE 3 Procurement A. International Competitive Bidding 1. Except as provided in Part D hereof, goods and works shall be procured under contracts 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 August 1984 (the Guidelines). 2. Contracts for vehicles, equipment, materials and supplies shall, to the maximum extent practicable, be grouped for the purposes of bidding so as to permit bulk procurement. B. Preference for Domestic Manufacturers In the procurement of goods in accordance with the pro- cedures described in Part A.1. of this Schedule, goods manu- factured in Burkina 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. C. Preference for Domestic Contractors In the procurement of works in accordance with the proce- dures described in Part A.1. of this Schedule, the Borrower may grant a margin of preference to domestic contractors in accor- dance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraph 5 of Appendix 2 thereto. D. Other Procurement Procedures 1. Contracts for civil works and for the purchase of goods estimated to cost less than CFAF 25 million equivalent may be awarded on the basis of competitive bidding advertised locally and pursuant to procedures acceptable to the Association. 2. Contracts for works and for the purchase of goods estimated to cost less than CFAF 5 million equivalent may be awarded on the basis of price quotations from not less than three suppliers. - 20 - E. Review by the Bank of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract estimated to cost the equivalent of CFAF 25 million or more, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply; provided, however, that where payments for such contract are to be made out of the proceeds of the Special Account, the two conformed copies of the contract required to be furnished to the Association, pursuant to paragraph 2 (d) of Appendix 1 to the Guidelines, shall be furnished to the Association prior to the making of the first payment out of the 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; provided, however, that where payments for such contract are to be made out of the proceeds of the Special Account, the two conformed copies of the contract required to be furnished to the Association, pursuant to paragraph 3 of Appendix 1 to the Guidelines together with the other information specified therein, shall be furnished to the Association as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 4 to this 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. 2. The figure of 10% is hereby specified for purposes of para- graph 4 of Appendix I to the Guidelines. - 21 - SCREDULE 4 Special Account 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 the Project and to be financed out of the proceeds of the Credit allocated from time to time to Categories (1) through (6) in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount in CFAF equivalent to the amount allocated to Category (9) which is to be withdrawn from the Credit Account and deposited in the Special Account pursuant to paragraph 3 (a) to this Schedule. 2. Payments out of the Special Account shall be made exclu- sively for eligible expenditures in accordance with the provi- sions of this Schedule. 3. (a) For purposes of withdrawal of the Authorized Alloca- tion, the Association shall, on the basis of a request or requests by the Borrower and evidence satisfactory to the Asso- ciation that the Special Account has been duly opened, withdraw on behalf of the Borrower from the Credit Account and deposit into the Special Account such amount or amounts of the Authorized Allocation as the Borrower shall have requested, up to the total of the Authorized Allocation. (b) For purposes of withdrawal of proceeds of the Credit to replenish the Special Account, the Association shall, on the basis of requests by the Borrower furnished to the Association at such intervals as the Association shall specify, withdraw from the Credit Account and deposit into the Special Account such amounts as shall be required to replenish the Special Account with amounts not exceeding the amount of payments made out of the Special Account for eligible expenditures. Except as the Asso- ciation may otherwise agree, each such deposit after the initial - 22 - deposit shall be withdrawn by the Association from the Credit Account under the respective Categories (1) through (6), and in the respective equivalent amounts, as shall have been justified by the evidence supporting the request 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 pursuant to paragraph 3 (b) of this Schedule, the Borrower shall furnish to the Association in respect of each payment made by the Borrower out of the Special Account such documents and other evidence as the Association shall reasonably request, showing that such pay- ment was made for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Sched- ule, no further deposit into the Special Account shall be made by the Association (a) when the Association shall have determined at any time that all further withdrawals can be made directly by the Borrower from the Credit Account in accordance with the provi- sions of paragraph (a) of Section 2.02 of this Agreement, or (b) unless otherwise agreed by the Association, when the total un- witharawn amount of the Credit allocated to Categories (1) through (6) minus the amount of any outstanding qualified agree- ment to reimburse made by the Association and of any outstanding special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions with respect to the Project, shall be equal to the equivalent of twice the amount of the Authorized Allocation, whichever shall be sooner. Withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to Categories (1) through (6) 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 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 (i) was made for any expenditure or in any amount not eligible pursuant to para- graph 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 - 23 - deposit into the Special Account by the Association, deposit into the Special 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 Special Account will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the Association, and unless otherwise agreed by the Association, refund to the Association such amount then outstanding in the Special Account. 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