Uganda - Agricultural Development Project : Credit 1539 - Credit Agreement - Conformed

OFFICIAL DOCUMENTS CREDIT NUMBER 1539-0 UG Development Credit Agreement (Agricultural Development Project) between THE REPUBLIC OF UGANDA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated wd-s, 1985 CREDIT NUMBER 1539-0 UG DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated 19-yL , 1985, between THE REPUBLIC OF UGANDA (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 foreign exchange cost of the Project described in Schedule 3 to this Agreement by extending the Credit as hereinafter provided; (B) the Borrower has applied to the International Fund for Agricultural Development (hereinafter called the Fund) for a loan (hereinafter called the Fund Loan) in an amount equivalent to fourteen million six hundred thousand Special Drawing Rights (SDR 14,600,000) to assist in financing the Project on the terms and conditions set forth in an agreement (hereinafter called the Fund Loan Agreement) between the Borrower and the Fund; (C) the Fund intends to appoint the Association as Cooper- ating Institution to administer the Fund Loan and the Association is prepared to accept such appointment; and WHEREAS the Association has agreed, on the basis inter alia of the 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 - 2 - respective meanings therein set forth and the following addi- tional terms have the following meanings: (a) "Special Account" means the account to be maintained pursuant to Section 2.02 (b) of this Agreement; (b) "Fund Loan Account" means the loan account established under the Fund Loan Agreement; (c) "Fund Financing Agreement" means the Financing Agree- ment dated March 26, 1982 between the Borrower and the Fund; (d) "ARP" means the Agricultural Reconstruction Program described in, and carried out pursuant to the provisions of, the Financing Agreement; (e) "MAF" means the Borrower's Ministry of Agriculture and Forestry; (f) "MAIF" means the Borrower's Ministry of Animal Industry and Fisheries; (g) "Project Area" means the Borrower's administrative districts of Apac, Gulu, Kitgum, Kumi, Lira, Soroti and Tororo; (h) "T&V" means the training and visit method of agricul- tural extension; (i) "ARP Program Account" means the program account estab- lished by the Borrower with the Bank of Uganda pursuant to Sched- ule 4 to the Fund Financing Agreement for the purposes of the ARP and into which local currency funds generated by the sale of inputs under ARP were deposited; (j) "Project Account" means the account to be established by the Borrower pursuant to Section 4.02 (b) (i) of this Agree- ment; (k) "Transport Account" means the account to be established by the Borrower pursuant to Section 4.02 (b) (ii) of this Agree- ment; (1) "IMC" means the Inter-Ministerial Conmittee established in accordance with the provisions of Schedule 4 to the Fund Financing Agreement; -3- (m) "PMU" means the Project Management Unit to be estab- lished pursuant to Section 4.03 (ii) of this Agreement; (n) "PIU" means a Project Implementation Unit to be estab- lished pursuant to Section 4.03 (iv) of this Agreement; (o) "USh" means Uganda Shillings, the currency of the Bor- rower; and (p) "MEU" means the Monitoring and Evaluation Unit to be maintained pursuant to Section 5.02 (i) of this Agreement. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Bor- rower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various cur- rencies equivalent to ten million Special Drawing Rights (SDR 10,000,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Article III of this Agreement. (b) The Borrower shall, for the purposes of the Project, maintain in dollars a special account in its Central 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 2 to this Agreement. Section 2.03. The Closing Date shall be March 31, 1990 or such later date as the Association shall establish. The Associa- tion shall promptly notify the Borrower of such later date. Section 2.04. (a) The Borrower shall pay to the Association a commitment charge at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of the Credit not with- drawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Development Credit Agree- ment to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or shall be cancelled. -4- (b) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without re- strictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Secticn. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Commitment charges and service charges shall be payable semiannually on May 15 and November 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each May 15 and November 15 commencing May 15, 1995, and ending November 15, 2034, each installment to and including the installment payable on November 15, 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. Section 2.08. The currency of United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Allocation and Withdrawal of Proceeds of Credit and Fund Loan Section 3.01. Subject to the rights of suspension and cancellation set forth in the Development Credit Agreement and the Fund Loan Agreement, the amount of the Credit and the amount of the Fund Loan may be withdrawn from the Credit Account and the Fund Loan Account, respectively, in accordance with the provi- sions of this Agreement and with the allocation of the proceeds of the Credit and the Fund Loan set forth in Schedule 1 to this Agreement, as such allocation may be modified from time to time pursuant to the provisions of such Schedule or by further agree- ment between the Borrower, the Association and the Fund. -5- Section 3.02. The Borrower shall be entitled to make with- drawals from the Credit Account and from the Fund Loan Account for expenditures made (or, if the Association and the Fund shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit and the Fund Loan. Section 3.03. (a) When the Borrower shall desire to withdraw any amount of the Credit or the Fund Loan, the Borrower shall deliver to the Association a written application in such form and containing such statements and agreements as the Association or the Fund shall reasonably request. Applications for withdrawal, with the necessary documentation as hereinafter provided, shall, except as the Borrower, the Association and the Fund shall other- wise agree, be made promptly in relation to expenditures for the Project. (b) The Borrower shall furnish to the Association such documents and other evidence in support of the application as the Association or the Fund shall reasonably request, whether before or after the Association shall have approved any withdrawal requested in the application. (c) Each application and the accompanying documents and other evidence must be sufficient in form and substance to satisfy the Association or the Fund that the Borrower is entitled to withdraw from the Credit Account or the Fund Loan Account the amount applied for and that such amount is to be used only for the purposes of the Project. Section 3.04. Each such application by the Borrower for withdrawal shall be deemed to be a request to withdraw funds from the Credit Account and from the Fund Loan Account and the funds to be withdrawn pursuant to such application shall be apportioned by *he Association, as nearly as practicable in the circum- stances, between the Credit and the Fund Loan in the ratio of 2:3, or such other ratio as shall be agreed between the Associa- tion and the Fund; provided, however, that, if such application shall be made in respect of expenditures that shall be financed out of the proceeds of the Credit or the Fund Loan only, such application shall be deemed to be a request to withdraw funds from the Credit Account or the Fund Loan Account only. Section 3.05. When the Association shall have approved an application by the Borrower for withdrawal, the Association shall: -6- (i) pay the amount, if any, which the Borrower is entitled to withdraw from the Credit Account to or on the order of the Borrower in accordance with the provisions of the Development Credit Agree- ment; and/or (ii) promptly notify the Fund that it has received an application for withdrawal from the Fund Loan Account in the aggregate amount specified in such notice, that it has approved payment of the por- tidn, if any, to be withdrawn from the Credit Account in the amount set forth in such notice, and that the portion to be withdrawn from the Fund Loan Account in the amount set forth in such notice is eligible for payment by the Fund. Section 3.06. If at any time the amount of the Credit or the Fund Loan shall have been fully withdrawn or cancelled, applications by the Borrower for further withdrawals shall be deemed to be requested for withdrawal of the full amount applied for from the Fund Loan Account or the Credit Account only, and the provisions of this Article III except for Section 3.04 hereof shall continue to apply mutatis mutandis until the full amount credited or to be credited to such Account shall have been with- drawn or cancelled. Section 3.07. Upon the Borrower's request and upon such terms as shall be agreed between the Borrower and the Associa- tion, the Association may, on behalf and for the account of the Fund, enter into special commitments to pay amounts, out of the proceeds of the Fund Loan, to the Borrower or others in respect of the cost of goods required by the Project, subject to the provisions of this Agreement concerning the allocation and apportionment of the proceeds of the Fund Loan. The Fund has advised the Association that any such special commitment shall, once it has been notified to the Fund, constitute an obligation on the part of the Fund to pay, notwithstanding any subsequent suspension or cancellation of the Fund Loan, the amount to be disbursed out of the proceeds of the Fund Loan in fulfillment of such special commitment. Section 3.08. Except as the Association and the Fund 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 or the Fund Loan shall be governed by the pro- visions of Schedule 4 to this Agreement. -7- ARTICLE IV Execution of the Project Section 4.01. The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 3 to this Agreement, and, to this end, shall carry out the Project through MAF and MAIF with due diligence and efficiency and in conformity with appropriate administrative, financial and agricultural practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the pur- pose. Section 4.02. Without any limitation or restriction upon its obligations under Section 4.01 of this Agreement, the Borrower shall: (a) cover part of the local costs of the Project from the ARP Program Account; (b) open and thereafter maintain until the completion of the Project: (i) a Project Account in the Bank of Uganda, on terms and conditions satisfactory to the Association and the Fund, and shall deposit therein all revenues from inputs sold to beneficiaries under the Project. The amounts so deposited shall be used for rural development purposes by the Borrower after consultation with the Association and the Fund; (ii) a Transport Account in a bank acceptable to the Association and the Fund and shall deposit therein an initial amount of sixty-five million Uganda Shillings (USh65,000,000). Thereafter, the Bor- rower shall, at the beginning of each quarter, deposit the amount estimated to be required to cover the expenditures under the Project for staff travel and transport allowances during such quar- ter; (c) Except as the Association and the Fund shall otherwise agree, the Borrower shall not distribute acaricides financed from the proceeds of the Credit and the Fund Loan until the Borrower shall have paid into the Project Account the Uganda Shillings equivalent of the cost of the subsidy on such acaricides. -8- Section 4.03. The Borrower shall for purposes of the Pro- ject: (i) continue to maintain the IMC with representation from MAF, MAIF, and the Ministries of Finance, Cooperatives and Marketing, Local Governments, Culture and Community Development and Planning and Economic Development; (ii) establish and there- after maintain a Project Management Unit to be headed by an executive secretary whose qualifications and experience are satisfactory to the Association, to be responsible for the day-to-day management of the Project and coordination between the Project components and who shall serve as secretary to the IMC; (iii) maintain a procurement unit within the Project Management Unit to carry out the requirements for the procurement of goods and works under the Project; and (iv) establish and thereafter maintain in both MAF and MAIF Project Implementation Units, to coordinate each Ministry's activities under the Project. Section 4.04. (a) In order to assist the Borrower in carry- ing out the Project, the Borrower shall, as and when needed, employ consultants, experts and specialists whose selection, qualifications, experience and terms and conditions of employment shall be satisfactory to the Association in accordance with the principles and procedures described in the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. (b) The consultants, experts and specialists to be appointed under this Section shall include: (i) a procurement manager, (ii) Z. project accountant; (iii) two warehouse managers; (iv) an adaptive agricultural research specialist; (v) a tsetse fly control specialist; (vi) a fisheries stock assessment spe- cialist and a statistician; (vii) three fish biologists; (viii) a training specialist; (ix) a training and visit extension spe- cialist; and (x) a monitoring and evaluation specialist. (c) The Borrower shall take all measures necessary to facilitate the work of said consultants, experts and special- ists. To that end, the Borrower shall cooperate fully with said consultants, experts and specialists in the performance of their services, and make available to them all such information, staff and other facilities as shall be necessary or useful for the successful execution of the Project. (d) Notwithstanding the generality of paragraph (c) of this Section, the Borrower shall take all action necessary to provide full-time services of fisheries statistics and field staff to -9- assist in the carrying out of the studies under Part B.3 of the Project. Section 4.05. (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 or the Fund Loan against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) The Borrower shall cause all goods and services financed out of the proceeds of the Credit or the Fund Loan to be used exclusively for the purposes of the Project. Section 4.06. (a) The Borrower shall furnish to the Associa- tion and the Fund, promptly upon their preparation, the plans, specifications, contract documents and work and procurement schedules for the Project, and, any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) The Borrower shall: (i) maintain records and procedures adequate to record and monitor the progress of the Project (including its cost and, where appropriate, the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Credit or the Fund Loan, and to disclose their use in the Project; (ii) enable the Association's and the Fund's representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Credit or the Fund Loan and any relevant records and documents; and (iii) furnish to the Associa- tion 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 Fund Loan and the goods and services financed out of such proceeds. (c) Upon the award by the Borrower of any contract for goods, works or services to be financed out of the proceeds of the Credit, the Association may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. - 10 - (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 and the Fund 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 accomplishmment of the purposes of the Credit and the Fund Loan. Section 4.07. The Borrower shall, by not later than June 30, 1985, prepare and submit to the Association and the Fund for their review and comment the extension messages proposed to be given by extension workers to farmers in the Project Area. Section 4.08. The Borrower shall: (i) ensure that the lor- ries acquired for the purposes of the ARP shall be used for the distribution of goods under the Project; and (ii) prepare and furnish to the Association and the Fund every six months, begin- ning from December 31, 1985, a report on the efficiency of the input distribution system under the Project, including, if applicable, any changes therein which might make it more effec- tive. Upon review by the Association and the Fund, the Borrower shall implement any changes therein which may be considered appropriate. Section 4.09. (a) Except for the Work Program for the 1985/86 fiscal year, the Borrower shall, by not later than April 1 of each year, prepare and submit to the Association and the Fund for their review and comments, Work Programs covering the period of 12 months commencing on the following July 1. (b) Each Work Program shall set out detailed proposals of the Borrower for the carrying out of the Project in the period to which it relates and shall contain information satisfactory to the Association and the Fund. (c) After review of and comment on each such Work Program by the Association and the Fund, the Borrower shall make such revisions to such Work Program as may be appropriate, having due regard to the comments emanating from the said review and, except as the Association and the Fund shall otherwise agree, carry out the Project in the year in question on the basis of such Work Program, as so revised. - 11 - Section 4.10. The Borrower shall provide bicycles and motor- cycles to extension staff under a hire-purchase scheme satisfac- tory to the Fund and the Association. Section 4.11. Without any limitation or restriction upon its obligations under Section 4.01 of this Agreement, the Borrower shall furnish to the Fund and the Association for their review and comment by not later than September 30, 1987, a detailed assessment of the overall Project performance. After review of the assessment, the Borrower, with the approval of the Associa- tion and the Fund, shall make such changes in the Project as are considered necessary to ensure the achievement of the purposes of the Project as set forth in the introductory paragraph to the Project described in Schedule 3 to this Agreement. Section 4.12. (a) In order to ensure that (i) the warehouses in Lira, Soroti and Tororo continue to be operated in accordance with sound management practices, and (ii) agriculture extension services provided to farmers in Soroti District are strengthened, the Borrower shall take all necessary measures including those designed to retain existing staff and to fill vacancies with appropriate qualified persons. (b) In order to ensure that appropriate in-service training is carried out in the Serere Research Station, the Arapai Com- munity Development Training Center and the Ngetta District Farm Institute, the Borrower shall take all necessary measures to ensure the availability of qualified training staff, including training personnel from the Serere Research Station, as and when needed. To this end, the Borrower shall, by not later than Decem- ber 31, 1985, appoint and post suitably qualified farm managers and graduate teaching staff to the Arapai Community Development Training Center and the Ngetta District Farm Institute. ARTICLE V Other Covenants Section 5.01. (a) The Borrower shall maintain or cause to be maintained separate accounts adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Proj- ect, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. - 12 - (b) Without limitation to the foregoing, the Borrower shall: (i) 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, 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 (iii) enable the Association's representatives to examine such records. (c) The Borrower shall: (i) have the accounts referred to in paragraph (a) of this Section, the ARP Account, Project Account and Transport 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 and the Fund, as soon as avail- able, 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 Associa- tion 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) 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 concern- ing said separate accounts, records and expenditures and the audit thereof as the Association shall from time to time reason- ably request. Section 5.02. The Borrower shall: (i) maintain, until completion of the Project, the Monitoring and Evaluation Unit establishe6 within MAF during the implementation of Jhe ARP to monitor all Project components; (ii) by June 30, 1985 furnish to the Association and the Fund for their review and comment a monitoring and evaluation system for the Project; (iii) make such revisions to such system as may be appropriate, paying due regard to any comments made thereon by the Association and the Fund; and (iv) monitor and evaluate the Project in accordance with such system. Section 5.03. The Borrower shall adequately maintain or cause to be maintained adequately the facilities constructed, improved or otherwise assisted under the Project in accordance with - 13 - appropriate administrative, financial and agricultural practices and provide promptly as needed the funds, facilities, services and other resources required for the purpose. Section 5.04. Except as the Association and the Fund shall otherwise agree, the Borrower shall take all such action as is necessary to ensure that the subsidy on acaricides is phased out by not later than December 31, 1986. ARTICLE VI Remedies of the Association Section 6.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof, namely, that: (i) Subject to subparagraph (ii) of this paragraph: (A) The right of the Borrower to withdraw the proceeds of any loan (including the Fund Loan) made to the Borrower for the financing of the Project shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing therefor, or (B) any such loan shall have become due and payable prior to the agreed maturity thereof. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Association that: (A) 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 (B) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consistent with the obligations of the Borrower under this Agreement. Section 6.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified pursuant to paragraph (d) thereof, namely, the event specified in paragraph (i) B of Section 6.01 of this Agreement shall occur. - 14 - ARTICLE VII Effective Date; Termination Section 7.01. The following events are specified as addi- tional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the execution and delivery on behalf of the Borrower of the Fund Loan Agreement has been duly authorized or ratified by all necessary governmental action and all other conditions prece- dent to the effectiveness of the Fund Loan pursuant to the Fund Loan Agreement (other than the effectiveness of this Agreement) have been duly fulfilled, and the Fund has appointed the Asso- ciation as Cooperating Institution to administer the Fund Loan on terms and conditions acceptable to the Association; (b) the Borrower has submitted to the Association and the Fund the Work Program for the 1985/86 fiscal year in form and substance required under the provisions of Section 4.09 of this Agreement; (c) the procurement manager and the project accountant referred to under Section 4.04 (b) (i); and (ii) have been employed; (d) the Project Account referred to in Section 4.02 (b) (i) of this Agreement has been opened; (e) the Transport Account referred to in Section 4.02 (b) (ii) of this Agreement has been opened and the Borrower has deposited therein an initial amount of USh 65 million; and (f) the PMU and the PIU's referred to in Section 4.03 (ii) and (iv) of this Agreement have been established and an executive secretary of the PMU appointed. Section 7.02. The date M 0 , is hereby specified for the purposes of Section 12.04 of the General Condi- tions. Section 7.03. If (i) the Fund Loan Agreement shall have come into force and effect and the Development Credit Agreement shall have failed to come into force and effect by the date specified - 15 - in Section 7.02 of this Agreement or a later date established by the Association for the purposes of Section 12.04 of the General Conditions, or (ii) the entire principal amount of the Credit withdrawn from the Credit Account and all charges which shall have accrued on the Credit shall have been paid before the Fund Loan Agreement shall have terminated, then, notwithstanding the provisions of Section 12.04 and 12.05 of the General Conditions, the Development Credit Agreement shall be deemed to be, or to remain, in force and effect but only to the extent required for the purpose of implementing the Fund Loan Agreement and of orderly settlement of matters of mutual interest to the parties thereunder, subject to such modifications of the Development Credit Agreement as shall be agreed between the Borrower, the Association and the Fund for such purposes. Section 7.04. If (i) the Fund Loan Agreement shall terminate in accordance with its terms before the Development Credit Agree- ment shall have terminated, or (ii) the Association shall notify the Borrower that its appointment as Cooperating Institution under the Fund Loan Agreement has terminated, the provisions of this Agreement shall, to the extent that they relate to the Fund Loan, forthwith terminate; provided, however, that in the case described in the foregoing clause (ii) such termination shall apply only to the responsibilities of the Association as such Cooperating Institution. ARTICLE VIII Representatives of the Borrower; Addresses Section 8.01. The Minister of the Borrower 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 8.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For Lin Borrower: Th.- Secretary to the Treasury '44.iistry of Finance .0. Box 8147 Kampala, Uganda - 16 - Cable address: Telex: FINSEC 61170 Kampala 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) 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. THE REPUBLIC OF UGANDA By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By AL , Regional Vice President Eastern and Southern Africa - 17 - SCHEDULE 1 Withdrawal of the Proceeds of the Credit and the Fund Loan 1. The table below sets forth the Categories of imported items to be financed out of the proceeds of the Credit and the Fund Loan and the allocation of amounts of the Credit and the Fund Loan to each Category: Amount of the Amount of the Credit Allocated Fund Loan (Expressed Allocated in SDR (Expressed in Category Equivalent) SDR Equivalent) (1) Civil works 200,000 200,000 (2) Vehicles and 6,400,000 9,160,000 equipment (3) Materials and 1,400,000 2,020,000 drugs (4) Technical 1,500,000 2,320,000 assistance and training (5) Operating costs 100,000 200,000 for training, workshops, equip- ment, PMU, PIU's and MEU (6) Special Account 100,000 100,000 Authorized Allo- cation under para- graph 3 (a) of Schedule 2 to this Agreement (7) Unallocated 300,000 600,000 TOTAL 10,000,000 14,600,000 - 18 - 2. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower; (b) payments made for expenditures prior to the date of this Agreement or the date of the Fund Loan Agreement, whichever shall be the later; and (c) payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manu- facture, procurement or supply thereof. 3. Notwithstanding the allocation of an amount of the Credit or the Fund Loan set forth in the second column of the table in paragraph 1 above, and without limitation upon the provisions of Section 3.04 of this Agreement, if the Association has reasonably estimated that the amount of the Credit or the Fund Loan then allocated to any Category will be insufficient to finance all expenditures in that Category, the Association may, by notice to the Borrower, correspondingly reallocate to such Category, to the extent required to meet such estimated shortfall, proceeds of the Credit or the Fund Loan which are then allocated to another Category and which in the opinion of the Association are not needed to meet other expenditures. 4. 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- ditures for such item shall be financed out of the proceeds of the Credit and the Fund Loan 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 or of the Fund under the Fund Loan Agreement, by notice to the Borrower, cancel such amount of the Credit and/or the Fund Loan as, in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit and/or the Fund Loan. - 19 - SCHEDULE 2 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 and the Fund Loan 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 and the Fund Loan 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 "Authorized Allocation" means an amount in dollars equivalent to the amount allocated to Category (6) which is to be withdrawn from the Credit Account and the Fund Loan Account, respectively, and to be deposited in the Special Account pursuant to paragraph 3 (a) of 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 and the Fund that the Special Account has been duly opened: (i) withdraw on behalf of the Borrower from the Credit Account and deposit into the Special Account; and (ii) promptly notify the Fund to withdraw on behalf of the Borrower from the Fund Loan 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. - 20 - (b) For purposes of withdrawal of proceeds of the Credit and the Fund Loan to replenish the Special Account, the Associa- tion 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 authorize the Fund to withdraw from the Fund Loan 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 pay- ments made out of the Special Account for eligible expenditures which shall not exceed the amount of the Authorized Allocation. Except as the Association may otherwise agree, each such deposit shall be withdrawn by the Association from the Credit Account and by the Fund from the Fund Loan Account, respectively, under Cate- gories (1), (2), (3), (4) and (5), and in the respective equiva- lent 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 and the Fund into the Special Account pursuant to paragraph 3 (b) of this Schedule, the Bor- rower 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 payment was made for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Schedule, no further deposit into the Special Account shall be made by the Association or by the Fund (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 and the Fund Loan Account in accordance with the provisions of Article III of this Agreement, or (b) unless otherwise agreed by the Association, when the total unwithdrawn amount of the Credit and the Fund Loan allocated to Categories (1), (2), (3), (4) and (5), 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 or on behalf of the Fund pursuant to Section 3.07 of this Agreement 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 and the Fund Loan Account of the remaining unwithdrawn amount of the Credit and the Fund Loan allocated to Categories (1), (2), (3), (4) and (5) shall follow such procedures as the Association shall - 21 - 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 deposit into the Special Account by the Association or the Fund, deposit into the Special Account or, if the Association shall so request, refund to the Association and the Fund Loan 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 and the Fund Loan such amount then outstanding. - 22 - SCHEDULE 3 Description of the Project The objectives of the Project are to: (i) increase agricul- tural production and the income of smallholder farmers and fishermen in the Project Area; and (ii) increase the availability of data needed for the formulation of sector development plans. The Project consists of the following Parts: Part A: Input and Other Supplies to the Project Area 1. Provision of agricultural implements and inputs including hand tools, ox carts, ox plows, small flour mills, motorcycles, bicycles, wheelbarrows, workshop equipment, spare parts, agricul- tural chemicals and forestry nursery supplies. 2. Provision of livestock inputs including veterinary drugs and equipment, vaccines, acaricides, spare parts, vehicles and a mobile laboratory. 3. Provision of fisheries supplies including outboard motors, spare parts, fish nets, boat building material and vehicles. Part B: Research and Surveys 1. Establishment of an adaptive research section at Serere Research Station including a sub-regional team at Lira, and provision of technical assistance, training, housing, storage facilities, vehicles, and equipment therefor. 2. Establishment of a pilot tsetse fly control program based on the trapping technique by the Borrower's Department of Tsetse Control. 3. Carrying out of a fish stock assessment of Lake Kyoga and a fisheries statistics and evaluation study to assess the current status of fishery in Lake Kyoga and monitor changes in fish pro- duction, including training and provision of launches, dinghies about 3 four-wheel drive vehicles, housing, camping gear and protective clothing. - 23 - Part C: Institution Building 1. (a) Strengthening of the general agricultural extension services in the Project Area by the provision of in- service training for agricultural extension staff and the upgrading and rehabilitation of the Serere DFI, Arapai DTC, Arapai Agricultural College and Ngetta DFI. (b) Introduction of a T & V extension system on a pilot basis in Soroti District. (c) Provision of equipment and vehicles, and building mate- rials for housing, for extension workers. 2. Strengthening of the Monitoring and Evaluation Unit in MAF headquarters by the provision of technical assistance, training, vehicles and equipment. The Project is expected to be completed by June 30, 1989. - 24 - SCHEDULE 4 Procurement A. International Competitive Bidding 1. Except as provided in Part C hereof, goods and prefabriated housing 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 goods, and for prefabricated housing works shall be grouped together to the maximum extent practicable for the purposes of inviting bids, and such grouping of items shall be subject to the approval of the Association. B. Preferen2e for Domestic Manufacturers In the procurement of goods in accordance with the proce- dures described in Part A.1 of this Schedule, goods manufactured in Uganda 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. Other Procurement Procedures 1. Contracts for goods estimated to cost the equivalent of $100,000 or less may be procured on the basis of local competi- tive bidding procedures acceptable to the Association. 2. Contracts for certain specialized items, including seeds, veterinary drugs and equipment subject to the approval of the Association, may be procured by negotiated purchase in accordance with the Borrower's procurement procedures acceptable to the Association. 3. Contracts for minor works shall be grouped together to the maximum extent practicable for the purposes of inviting bids and may be awarded on the basis of local competitive bidding pro- cedures acceptable to the Association, except that rehabilitation of landing stages under Part B.3 of the Project may be carried out by force account by the Borrower's Public Works Department. - 25 - D. Review of Procurement Decisions by the Association 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 $250,000 or more, the procedures set forth in para- graphs 2 and 4 of Appendix 1 to the Guidelines shall apply. (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. (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 15% is hereby specified for purposes of paragraph 4 of Appendix 1 to the Guidelines. 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