Conformed Copy - C2163 - Agricultural Sector Project - Development Credit Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2163 MLI (Agricultural Sector Project) between REPUBLIC OF MALI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated July 25, 1990 CREDIT NUMBER 2163 MLI DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated July 25, 1990, between REPUBLIC OF MALI (the "Borrower") and INTERNATIONAL DEVELOPMENT ASSOCIATION (the "Association"). WHEREAS (A) the Association has received a letter, dated May 12, 1990, from the Borrower describing a program of policies, objectives and actions designed to achieve structural adjustment of the Borrower's agricultural sector (hereinafter called the "Program"); (B) the Borrower, having committed itself to the execution of the Program and, as part of the Program, having undertaken to carry out the Project described in Schedule 2 to this Agreement, has requested the Association to assist in the financing of the Project and of urgently needed imports required during the execution of the Program; Page 2 (C) Parts A and B the Project will be carried out by CMDT (as hereinafter defined) under the overall responsibility of MA (as hereinafter defined), with the Borrower's assistance and, as part of such assistance, the Borrower will make available to CMDT part of the proceeds of the Credit as provided in this Agreement and in the Subsidiary Grant Agreement; (D) the Borrower intends to obtain from the Government of the Swiss Confederation ("Switzerland") a non-reimbursable contribution (the "Swiss Contribution") in an amount equivalent to ten million five hundred thousand Swiss Francs (SwFr10,500,000) to assist in financing the Project on the terms and conditions set forth in an agreement (the "Swiss Contribution Agreement") to be entered into between the Borrower and Switzerland; (E) the Borrower intends to seek additional funds from other donors to assist in financing the Project and the imports required during the execution of the Program; and (F) the Association has agreed on the basis, inter alia, of the foregoing, to extend the Credit to the Borrower upon the terms and conditions set forth in this Agreement and in the Project Agreement of even date herewith between the Association and CMDT; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Develop- ment Credit Agreements" of the Association, dated January 1, 1985, with the last sentence of Section 3.02 deleted (the "General Conditions") constitute an integral part of this Agreement. Section 1.02. 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) "BCEAO" means Banque Centrale des Etats de l'Afrique de l'Ouest, the Borrower's Central Bank; (b) "CFAF" and "CFA Franc" mean the currency of the Borrower; (c) "CMDT" means Compagnie Malienne pour le Developpement des Textiles, a SEM organized pursuant to Ordonnance No. 4/CMLN of January 30, 1975; (d) "CMDT Contract-Plan" means the contract dated November 17, 1989 between the Borrower and CMDT, setting forth the mutual rights and obligations of the Borrower and CMDT in view of CMDT's industrial, commercial and public service activities; (e) "Cotton Fund" means the fund established pursuant to the Borrower's Arrcte Interministeriel No. 99/MA-FC of March 22, 1990; (f) "DNHE" means Direction Nationale de l'Hydraulique et de l'Energie, a Directorate of the Borrower's Ministry of Industry, Water and Power; (g) "MA" means Ministcre de l'Agriculture, the Borrower's Ministry of Agriculture; (h) "ODIK" means Operation de Developpement Integre du Kaarta, a Rural Development Operation (as hereinafter defined); (i) "ODIPAC" means Office de Developpement Integre des Productions Arachidicres et Cerealicres, a Rural Development Operation; Page 3 (j) "OHV" means Operation Haute Vallee, a Rural Development Operation; (k) "OPAM" means Office des Produits Agricoles du Mali, a commercial and industrial public entity (etablissement public caractcre industriel et commercial) of the Borrower organized and operating under Loi No. 88-67 AN-RM of December 26, 1988 and Decret No. 90-076 PRM of March 27, 1990; (l) "OPAM Contract-Plan" means the contract to be entered between the Borrower and OPAM pursuant to paragraph 2 of Part A of Schedule 4 to this Agreement; (m) "OPSS" means Operation Production des Semences Selectionnees, a Rural Development Operation; (n) "ORS" means Operation Riz Segou, a Rural Development Operation; (o) "OTER" means Operation de Travaux d'Equipement Rural, a Rural Development Operation; (p) "Project Agreement" means the agreement between the Association and CMDT of even date herewith, as the same may be amended from time to time, and such term includes all schedules and agreements supplemental to the Project Agreement; (q) "Project Preparation Advance" means the project preparation advance granted by the Association to the Borrower pursuant to an exchange of letters dated February 20, 1987 and February 26, 1987 between the Borrower and the Association; (r) "Rural Development Operation" means any of the Borrower's public entities established pursuant to Ordonnance No. 22/CMLN of March 24, 1972; (s) "SEM" means Societe d'Economie Mixte, a company whose capital is jointly owned by the Borrower and by domestic or foreign private entity; (t) "SITC" means the Standard International Trade Classification, Revision 3 (SITC, Rev. 3), published by the United Nations in Statistical Papers, Series M, No. 34/Rev. 3 (1986); (u) "Special Account" means any of the accounts referred to in Sections 2.02 (b) and (c) of this Agreement; (v) "Subsidiary Grant Agreement" means the agreement to be entered into between the Borrower and CMDT pursuant to Section 3.02 (a) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Grant Agreement; and (w) "Swiss Contribution Account" means the account established by Switzerland for the purpose of the Swiss Contribution. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount in various currencies equivalent to forty million seven hundred thousand Special Drawing Rights (SDR 40,700,000). Section 2.02. (a) The amount of the Credit and of the Swiss Contribution may be withdrawn from the Credit Account and the Swiss Contribution Account in accordance with the provisions of Schedule Page 4 1 to this Agreement for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required: (i) for the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Credit and of the Swiss Contribution; and (ii) during the execution of the Program and to be financed out of the proceeds of the Credit. (b) The Borrower shall, for the purposes of Categories (1) through (4) and 5 (b) of the table in paragraph 1 of Schedule 1 to this Agreement, open and maintain in CFAF a special deposit account (hereinafter referred to as "Special Account A") in a commercial bank on terms and conditions satisfactory to the Association, including appropriate protection against set-off, seizure or attachment. (c) The Borrower shall, for the purposes of Category (6) of the table in paragraph 1 of Schedule 1 to this Agreement, open and maintain in CFAF a special account (hereinafter referred to as "Special Account B") in BCEAO on terms and conditions satisfactory to the Association. (d) Deposits into, and payments out of, any of the Special Accounts shall be made in accordance with the provisions of Schedule 3 to this Agreement. (e) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and pay to itself the amount required to repay the principal amount of the Project Preparation Advance withdrawn and outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advance shall thereupon be cancelled. Section 2.03. The Closing Date shall be December 31, 1996 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.04. (a) The Borrower shall pay to the Association a commitment charge on the principal amount of the Credit not withdrawn from time to time at a rate to be set by the Association as of June 30 of each year, but not to exceed the rate of one-half of one percent (1/2 of 1%) per annum. (b) The commitment charge shall accrue: (i) from the date sixty days after the date of this Agreement (the "Accrual Date") to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or cancelled; and (ii) at the rate set as of the June 30 immediately preceding the Accrual Date and at such other rates as may be set from time to time thereafter pursuant to paragraph (a) above. The rate set as of June 30 in each year shall be applied from the next date in that year, specified in Section 2.06 of this Agreement. (c) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without restrictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one percent (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 January 15 and June 15 in each year. Section 2.07. (a) Subject to paragraphs (b) and (c) below, the Borrower shall repay the principal amount of the Credit in semi- Page 5 annual installments payable on each January 15 and July 15 commencing July 15, 2000 and ending January 15, 2030. Each installment to and including the installment payable on January 15, 2010 shall be one percent (1%) of such principal amount, and each installment thereafter shall be two percent (2%) of such principal amount. (b) Whenever: (i) the Borrower's gross national product per capita, as determined by the Association, shall have exceeded $790 in constant 1985 Dollars for five consecutive years; and (ii) the Bank shall consider the Borrower creditworthy for Bank lending, the Association may, subsequent to the review and approval thereof by the Executive Directors of the Association and after due consideration by them of the development of the Borrower's economy, modify the terms of repayment of installments under paragraph (a) above by requiring the Borrower to repay twice the amount of each such installment not yet due until the principal amount of the Credit shall have been repaid. If so requested by the Borrower, the Association may revise such modification to include, in lieu of some or all of the increase in the amounts of such installments, the payment of interest at an annual rate agreed with the Association on the principal amount of the Credit withdrawn and outstanding from time to time, provided that, in the judgment of the Association, such revision shall not change the grant element obtained under the above-mentioned repayment modification. (c) If, at any time after a modification of terms pursuant to paragraph (b) above, the Association determines that the Borrower's economic condition has deteriorated significantly, the Association may, if so requested by the Borrower, further modify the terms of repayment to conform to the schedule of installments as provided in paragraph (a) above. Section 2.08. The currency of the French Republic is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.09. (a) With respect to withdrawals under Category (6) of the table set forth in paragraph 1 of Schedule 1 to this Agreement, the National Manager (Directeur National) of BCEAO is designated as representative of the Borrower for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. (b) Without limitation or restriction to the foregoing, the Borrower hereby entrusts BCEAO with responsibility for the preparation of withdrawal applications under Category (6) of the table set forth in paragraph 1 of Schedule 1 to this Agreement and for the collection of the documents and other evidence to be furnished to the Association in support of such applications; such withdrawal applications shall, to the extent practicable, be consolidated so as to apply for withdrawal of aggregate amounts of not less than $500,000 equivalent. ARTICLE III Execution of the Project Section 3.01. The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement and, to this end, without any limitation or restriction upon any of its other obligations under the Development Credit Agreement, shall: (a) cause CMDT to carry out Parts A and B of the Project and to perform, in accordance with the provisions of the Project Agreement, all the obligations of CMDT therein set forth; (b) take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable CMDT to perform such obligations; Page 6 (c) not take or permit to be taken any action which would prevent or interfere with such performance; (d) carry out Part C of the Project under the overall responsibility of MA with due diligence and efficiency and in conformity with appropriate administrative practices; and (e) provide, promptly as needed, the funds, facilities, services and other resources for Part C of the Project. Section 3.02. (a) The Borrower shall make the proceeds of the Credit which may from time to time be allocated to Categories (1) through (4) and 5 (b) of the table set forth in Schedule 1 of this Agreement available to CMDT under a subsidiary grant agreement to be entered into between the Borrower and CMDT, under terms and conditions which shall have been approved by the Association. (b) The Borrower shall exercise its rights under the Subsidiary Grant Agreement in such manner as to protect the interests of the Borrower and the Association and to accomplish the purposes of the Credit and, except as the Association shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive the Subsidiary Grant Agreement or any provision thereof. Section 3.03. Except as the Association shall otherwise agree: (a) procurement of the consultants' services required for Part C of the Project and to be financed out of the proceeds of the Credit and procurement of the imports required during execution of the Program shall be governed by the provisions of Schedule 5 to this Agreement; and (b) procurement of the goods, works and consultants' services required for Parts A and B of the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of the Schedule to the Project Agreement. Section 3.04. The Borrower and the Association hereby agree that 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 Parts A and B of the Project shall be carried out by CMDT pursuant to Section 2.03 of the Project Agreement. Section 3.05. (a) The Borrower and the Association shall from time to time, and in any case not later than November 30 each year the Project is being executed, starting with November 30, 1990, exchange views on the progress achieved in carrying out: (i) the Project; (ii) the Program; (iii) the CMDT Contract-Plan and the OPAM Contract-Plan; and (iv) the actions specified in Schedule 4 to this Agreement. (b) Prior to each such exchange of views as specified in paragraph (a) of this Section and not later than October 31 of each year the Project is being executed, the Borrower shall furnish the following documentation satisfactory to the Association: (i) a report on the progress achieved in carrying out the Program, including a review of the related investments and expenditures in such detail as the Association shall reasonably request; (ii) the Borrower's revised three-year rolling Program of Investments and Public Expenditures for the agricultural sector; and (iii) a report on the execution of the CMDT Contract- Plan and the OPAM Contract-Plan. ARTICLE IV Page 7 Financial and Other Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practices the operations and financial condition: (i) in respect of Part C of the Project of the Borrower's departments or agencies responsible for carrying out such Parts of the Project; and (ii) of the Cotton Fund. (b) For all expenditures relating to Part C of the Project and to the imports necessary during the execution of the Program with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditures, the Borrower shall: (i) maintain or cause to be maintained in accordance with sound accounting practices, records and accounts reflecting such expenditures; (ii) ensure that all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures are retained until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account was made; and (iii) enable the Association's representatives to examine such records. (c) The Borrower shall: (i) have the records and accounts referred to in paragraphs (a) and (b) (i) of this Section and those for Special Account B for each Borrower's 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 Borrower's fiscal year the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested, including a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals; and (iii) furnish to the Association such other information concerning said records and accounts and the audit thereof as the Association shall from time to time reasonably request. Section 4.02. The Borrower shall: (a) not later than March 31, 1992, submit a development plan satisfactory to the Association for the Bougouni region, including a road construction program with soil surveys and areas demarcated for wildlife resorts; (b) not later than January 31, 1993, transform OTER into an SEM; and (c) not later than December 31, 1993: (i) eliminate all subsidies on tractor maintenance and sale activities carried out by CMDT; (ii) implement measures, satisfactory to the Page 8 Association, for the promotion of the private sector in the tractor sales and maintenance activities carried out by CMDT; (iii) eliminate all subvention on insecticides for agriculture sold through CMDT except for the last insecticide treatment on cotton; and (iv) cause CMDT to sell fertilizer to farmers at cost. ARTICLE V Remedies of the Association Section 5.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional events are specified: (a) A situation has arisen which shall make it improbable that the Program, or a significant part thereof, will be carried out. (b) The Borrower shall have failed to perform any of its obligations under either the CMDT Contract-Plan or the OPAM Contract-Plan. (c) CMDT shall have failed to perform any of its obligations under the Project Agreement or the CMDT Contract-Plan. (d) OPAM shall have failed to perform any of its obligations under the OPAM Contract-Plan. (e) As a result of events which have occurred after the date of the Development Credit Agreement, an extraordinary situation shall have arisen which shall make it improbable that CMDT will be able to perform its obligations under the Project Agreement or the Contract-Plan. (f) The Borrower's Ordonnance No. 4/CMLN of January 30, 1975 shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of CMDT to perform any of its obligations under the Project Agreement or the CMDT Contract-Plan. (g) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of CMDT or OPAM or for the suspension of their operations. (h) The Borrower's Arrcte Interministeriel No. 99/MA-MFC of March 22, 1990 establishing the Cotton Fund shall have been amended, suspended, abrogated, repealed or waived without the prior approval of the Association or the Borrower shall have failed to comply with any of its provisions. (i) (i) Subject to subparagraph (ii) of this paragraph: (A) The right of the Borrower to withdraw the proceeds of any grant or loan made to the Borrower for the financing of the Project and of the imports required during the execution of the Program 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 (i) shall not apply if the Borrower establishes to the satisfaction of the Association that: Page 9 (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 and of the imports required during the execution of the Program are available to the Borrower from other sources on terms and conditions consistent with the obligations of the Borrower under this Agreement. Section 5.02. Pursuant to Section 7.01 (d) of the General Conditions, the following additional events are specified: (a) any event specified in paragraphs (a), (b), (c), and (d) of Section 5.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Association to the Borrower; (b) any event specified in paragraphs (f), (g) and (h) of Section 5.01 of this Agreement shall occur; and (c) the event specified in paragraph (i) (i) (B) of Section 5.01 of this Agreement shall occur, subject to the proviso of paragraph (i) (ii) of that Section. ARTICLE VI Termination Section 6.01. The following is specified as an additional matter, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association, namely that the Project Agreement has been duly authorized or ratified by CMDT and is legally binding upon CMDT in accordance with its terms. Section 6.02. The date ninety (90) days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. Except as provided in Section 2.09 of this Agreement, the Minister of the Borrower at the time responsible for Finance is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministcre des Finances et du Commerce Bamako Republic of Mali Cable address: Telex: MINIFINANCES 972559 MINIFINANCE Bamako For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Page 10 Cable address: Telex: INDEVAS 197688 (TRT) Washington, D.C. 248423 (RCA) 64145 (WUI) or 82987 (FTCC) IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF MALI By /s/ Sekouba Cisse Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Edward V.K. Jaycox Regional Vice President Africa 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 and of the Swiss Contribution, the allocation of the amounts of the Credit and of the Swiss Contribution to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Swiss Amount Contri- of the bution % of Credit Allocated Expendi- Allocated (Expressed % of tures (Expressed in Swiss Expendi- to be in SDR Francs tures to Financed by Category Equivalent) Equivalent) be Financed Switzerland (1) Civil 100% works: (a) under 5,000,000 Part A.3 of the Project (b) other 6,300,000 Amount of the Swiss Amount Contri- of the bution % of Credit Allocated Expendi- Allocated (Expressed % of tures (Expressed in Swiss Expendi- to be in SDR Francs tures to Financed by Category Equivalent) Equivalent) be Financed Switzerland Page 11 (2) Equip- 500,000 100% of ment and foreign vehicles expendi- tures, 100% of local expendi- tures (ex- factory cost) and 85% of local ex- penditures for other items pro- cured locally (3) Consultants' 600,000 100% services (4) Operating 2,300,000 85% costs (5) Studies 100% and audits: (a) for MA 1,400,000 (b) for CMDT 2,500,000 Amount of the Swiss Amount Contri- of the bution % of Credit Allocated Expendi- Allocated (Expressed % of tures (Expressed in Swiss Expendi- to be in SDR Francs tures to Financed by Category Equivalent) Equivalent) be Financed Switzerland (6) Imports 19,200,000 100% required during execution of the Program (7) Initial 10,500,000 100% Contribu- tion to Cotton Fund (8) Refunding 800,000 Amount due of Project pursuant Prepara- to Section tion Ad- 2.02 (e) vance of this Agreement (9) Unallocated 2,100,000 __________ __________ 40,700,000 10,500,000 TOTAL ========== ========== 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in Page 12 the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of the Borrower; (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower; provided, however, that if the currency of the Borrower is also that of another country from the territory of which goods or services are supplied, expenditures in such currency for such goods or services shall be deemed to be "foreign expenditures"; and (c) the term "operating costs" means incremental salaries and vehicle operating costs. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made: (a) out of the proceeds of the Credit in respect of Category (7) of paragraph 1 above; (b) out of the proceeds of the Credit allocated to Categories (1) through (4) and (5) (b) of paragraph 1 above: (i) until the Subsidiary Grant Agreement has been entered into between the Borrower and CMDT; and (ii) in respect of payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of SDR 1,900,000, may be made on account of payments made for such expenditures before that date but after the date falling twelve months prior to the date of this Agreement; and (c) out of the proceeds of the Credit allocated to Category (1) (a) of paragraph 1 above, until: (i) an agreement satisfactory to the Association for the technical preparation and supervision of the construction of new water points has been entered into between CMDT and DNHE; and (ii) until at least 250 water users' associations have been established in a manner satisfactory to the Association; (d) out of the proceeds of the Credit allocated to Category (6) of paragraph 1 above in respect of: (i) expenditures for goods included in the following SITC groups or sub-groups, or any successor groups or sub-groups under future revisions to the SITC, as designated by the Association by notice to the Borrower: Group Sub-group Description of Items 112 - Alcoholic beverages 121 - Tobacco, unmanufactured, tobacco refuse 122 - Tobacco, manufactured (whether or not containing tobacco substitutes) 525 - Radioactive and associated materials 667 - Pearls, precious and semi-precious stones, unworked or worked 718 718.7 Nuclear reactors, and parts thereof, fuel elements (cartridges), non-irradiated for nuclear reactors Page 13 897 897.3 Jewelry of gold, silver or platinum group metals (except watches and watch cases) and goldsmiths' or silversmiths' wares (including set gems) 971 - Gold, non-monetary (excluding gold ores and concentrates) (ii) expenditures in the currency of the Borrower or for goods supplied from the territory of the Borrower, excluding, if the currency of the Borrower is also that of another country, expenditures in such currency for goods supplied from the territory of such other country; (iii) payments made for expenditures prior to the date of this Agreement, except that withdrawals in an aggregate amount not exceeding the equivalent of SDR 3,800,000 may be made on account of payments made for such expenditures before that date but after the date falling four months prior to the date of this Agreement; (iv) expenditures for goods procured under contracts costing less than $5,000 equivalent; (v) expenditures for goods supplied under a contract which any national or international financing institution or agency other than the Association shall have financed or agreed to finance; and (vi) expenditures for goods intended for a military or para-military purpose or for luxury consumption. 4. Withdrawals out of the proceeds of the Credit allocated to Category (6) of paragraph 1 above for expenditures under contracts for the procurement of goods estimated to cost the equivalent of less than $100,000 may be permitted by the Association upon the basis of statements of expenditure under such terms and conditions as the Association shall specify. 5. (a) No withdrawal shall be made and no commitment shall be entered into to pay amounts to or on the order of the Borrower in respect of expenditures to be financed out of the proceeds of the Credit allocated to Category (6) of paragraph 1 above after, under said Category, the aggregate of the proceeds of the Credit withdrawn from the Credit Account and the total amount of such commitments shall have reached the equivalent of SDR 9,500,000, unless the Association shall be satisfied, after an exchange of views as described in Section 3.05 (a) of this Agreement based on evidence satisfactory to the Association: (i) with the progress achieved by the Borrower in the carrying out of the Program; (ii) that the actions described in Part A of Schedule 4 to this Agreement have been taken; and (iii) that the macro-economic policy framework of the Borrower is consistent with the objectives of the Program. (b) No further such withdrawal or commitment shall be made in respect of expenditures to be financed out of the proceeds of the Credit allocated to Category (6) of paragraph 1 above after, under said Category, the aggregate of the proceeds of the Credit withdrawn from the Credit Account and the total amount of such commitments shall have reached the equivalent of SDR 15,300,000 unless the Association shall be satisfied, after an exchange of views as described in Section 3.05 (a) of this Agreement based on evidence satisfactory to the Association: (i) with the progress achieved by the Borrower in the carrying out of the Program; (ii) that the actions described in Part B of Schedule 4 to this Agreement have been taken; and (iii) that the macro-economic policy framework of Page 14 the Borrower is consistent with the objectives of the Program. 6. If, after any of the exchanges of views described in paragraph 5 above, the Association shall have given notice to the Borrower that the progress achieved, actions taken and macro-economic policy framework are not satisfactory and, within 90 days after such notice, the Borrower shall not have achieved progress and taken actions satisfactory to the Association, then the Association may, by notice to the Borrower, cancel the unwithdrawn amount of the Credit allocated to Category (6) of paragraph 1 above or any part thereof. SCHEDULE 2 Description of the Project The objectives of the Project are: (i) to support and consolidate the Borrower's plans to ensure agricultural growth in its territory while diversifying and sustaining agricultural production; and (ii) to increase and diversify agricultural production in the southern part of the Borrower's territory through investment, improved farming practices and natural resource management. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Association may agree upon from time to time to achieve such objectives: Part A: Rural Development of Mali-Sud 1. Experimental development and diversification programs, including: (a) reorienting adaptive research towards experimental technologies; and (b) developing the production, processing and marketing of new crops complementary to cotton. 2. Improving land management schemes and extension services by: (a) monitoring and evaluation; (b) retraining and strengthening of extension services; (c) introducing natural resource management activities; and (d) establishing action programs for promoting village associations. 3. Improving the rural water supply system by the construction of about 450 village water supply systems. 4. Improving rural roads in the Sikasso area by the upgrade of about 390 km of feeder roads. 5. Audits and studies for CMDT. Part B: Regional Development of Bougouni Carrying out an integrated rural development program in the Bougouni area of the Borrower including the following: 1. (a) Increasing the use of agricultural equipment and inputs; (b) improving farming methods; and (c) strengthening of extension services. 2. Improving livestock production and its integration with farming operations. 3. (a) Developing village institutions; (b) training of farmers and extension agents; and (c) support to women's activities. 4 Establishing a pilot project of village land management. 5. Supporting the research system to provide for agricultural Page 15 diversification. 6. Improving rural roads by rehabilitation and construction of about 500 km of feeder roads. Part C: Institutional Support Assistance in the carrying out of studies and other support activities to implement the Program, including, inter alia: (a) proposals for the restructuring of Rural Development Organizations; (b) evaluation of the mechanisms complementary to the Cotton Fund at the level of village associations; and (c) audits. * * * * The Project is expected to be completed by June 30, 1996. SCHEDULE 3 Special Accounts 1. For the purposes of this Schedule: (a) the term "eligible Categories" means: (i) in the case of Special Account A, Categories (1) through (4) and (5) (b) set forth in the table in paragraph 1 of Schedule 1 to this Agreement; and (ii) in the case of Special Account B, Category (6) set forth in said table; (b) the term "eligible expenditures" means expenditures in respect of the reasonable cost of: (i) goods and services required for the Project; and (ii) imports required during execution of the Program; to be financed out of the proceeds of the Credit allocated from timeto time to the eligible Categories in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount to be withdrawn from the Credit Account and deposited into each of the Special Accounts pursuant to paragraph 3 (a) of this Schedule, equivalent, in the case of Special Account A, to CFAF 500,000,000, and in the case of Special Account B, to CFAF 1,000,000,000. 2. Payments out of any Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Association has received evidence satisfactory to it that a Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish such Special Account shall be made as follows: (a) For withdrawals of the Authorized Allocation, the Borrower shall furnish to the Association a request or requests for a deposit or deposits which do not exceed the aggregate amount of such Authorized Allocation. On the basis of such request or requests, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account concerned such amount or amounts as the Borrower shall have requested. (b) (i) For replenishment of a Special Account, the Borrower shall furnish to the Association requests for deposits into such Special Account at such intervals as the Association shall specify. (ii) Prior to or at the time of each such request, the Borrower shall furnish to the Association the Page 16 documents and other evidence required pursuant to paragraph 4 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account concerned such amount as the Borrower shall have requested and as shall have been shown by said documents and other evidence to have been paid out of such Special Account for eligible expenditures. All such deposits shall be withdrawn by the Association from the Credit Account under the respective eligible Categories, and in the respective equivalent amounts, as shall have been justified by said documents and other evidence. 4. For each payment made by the Borrower out of a Special Account, the Borrower shall, at such time as the Association shall reasonably request, furnish to the Association such documents and other evidence showing that such payment was made exclusively for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Schedule, the Association shall not be required to make further deposits into a Special Account: (a) if, at any time, the Association shall have determined that all further withdrawals should be made by the Borrower directly from the Credit Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or (b) once the total unwithdrawn amount of the Credit allocated to the relevant eligible Categories less the amount of any outstanding special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions shall equal the equivalent of twice the amount of the relevant Authorized Allocation. Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to the eligible Categories shall follow such procedures as the Association shall specify by notice to the Borrower. Such further withdrawals shall be made only after and to the extent that the Association shall have been satisfied that all such amounts remaining on deposit in the Special Account concerned as of the date of such notice will be utilized in making payments for eligible expenditures. 6. (a) If the Association shall have determined at any time that any payment out of a Special Account: (i) was made for an expenditure or in an amount not eligible pursuant to paragraph 2 of this Schedule; (ii) was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association: (A) provide such additional evidence as the Association may request; or (B) deposit into such 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. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account concerned shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association shall have determined at any time that any amount outstanding in a Special Account will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in a Special Account. Page 17 (d) Refunds to the Association made pursuant to paragraphs 6 (a), (b) and (c) of this Schedule shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions. SCHEDULE 4 Conditions for the Making of Withdrawals under Category (6) of paragraph 1 of Schedule 1 to this Agreement The following actions have been taken consistent with the principles outlined in the Program and are satisfactory to the Association: Part A: Actions Referred to in Paragraph 5 (a) of Schedule 1 to this Agreement (Conditions for Release of Second Tranche) 1. The Borrower and CMDT have implemented the CMDT Contract-Plan in a manner satisfactory to the Association. 2. The Borrower and OPAM have entered into the OPAM Contract-Plan covering the years 1990 to 1993 and have carried it out so far in a manner satisfactory to the Association. 3. The Borrower has enacted legislation abolishing all taxation on the export of cotton. 4. The Borrower's revised three-year rolling Program of Investments and Public Expenditures for the agricultural sector covering the years 1992 to 1994 has been submitted and is satisfactory to the Association. 5. The revised five-year rolling Rural Development Program of Mali-Sud covering the years 1991 to 1996 has been submitted and is satisfactory to the Association. 6. A plan for the restructuring of ODIK, ODIPAC, OHV, OPSS and ORS has been submitted and is satisfactory to the Association. Part B: Actions Referred to in Paragraph 5 (b) of Schedule 1 to this Agreement (Conditions for Release of Third Tranche) 1. The Borrower and CMDT have implemented the CMDT Contract-Plan in a manner satisfactory to the Association. 2. The Borrower and OPAM have implemented the OPAM Contract-Plan in a manner satisfactory to the Association. 3. At least one representative of cotton producers has been appointed as a member of the management committee of the Cotton Fund. 4. The Borrower's revised three-year rolling Program of Investments and Public Expenditures for the agricultural sector covering the years 1993 to 1995 has been submitted and is satisfactory to the Association. 5. The revised five-year rolling Rural Development Program of Mali-Sud covering the years 1992 to 1997 has been submitted and is satisfactory to the Association. SCHEDULE 5 Procurement and Consultants' Services Section I. Procurement of Goods for Category (6) of paragraph 1 of Schedule 1 to this Agreement 1. Contracts for the procurement of goods estimated to cost the Page 18 equivalent of $2,500,000 or more each shall be awarded through international competitive bidding 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"), subject to the following modifications: (a) Paragraph 2.8 of the Guidelines is deleted and the following is substituted therefor: "2.8 Notification and Advertising The international community should be notified in a timely manner of the opportunity to bid. This will be done by advertising invitations to apply for inclusion in a bidder's invitation list, to apply for prequalification, or to bid; such advertisements should be placed in at least one newspaper of general circulation in the Borrower's country and, in addition, in at least one of the following forms: (i) a notice in the United Nations publication, Development Forum, Business Edition; or (ii) an advertisement in a newspaper, periodical or technical journal of wide international circulation; or (iii) a notice to local representatives of countries and territories referred to in the Guidelines, that are potential suppliers of the goods required." (b) The following is added at the end of paragraph 2.21 of the Guidelines: "As a further alternative, bidding documents may require the bidder to state the bid price in a single currency widely used in international trade and specified in the bidding documents." (c) Paragraphs 2.55 and 2.56 of the Guidelines are deleted. 2. Contracts for the procurement of goods estimated to cost the equivalent of less than $2,500,000 shall be awarded: (a) by purchasers required to follow the Borrower's public procurement procedures for the importation of goods, on the basis of such procedures, provided that such procedures shall have been found acceptable by the Association; (b) by other purchasers, in accordance with established commercial practice, provided that such contracts shall be awarded on the basis of evaluation and comparison of quotations obtained from suppliers from at least two countries, except that direct contracting procedures acceptable to the Association may be used where considered appropriate under paragraph 3.5 of the Guidelines; and (c) by any purchasers, for the supply of commodities on the basis of evaluation and comparison of quotations obtained from more than one supplier. 3. With respect to each contract referred to in paragraph 1 of this Schedule, the Borrower shall furnish to the Association, prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids and recommendations for award, a description of the advertising and tendering procedures followed and such other information as the Association shall reasonably request. Where payments under a contract are to be made out of the proceeds of Special Account B, such copies together with the other Page 19 information required to be furnished to the Association pursuant to this paragraph shall be furnished to the Association as part of the evidence required under paragraph 4 of Schedule 3 to this Agreement. 4. With respect to each contract referred to in paragraph 2 of this Schedule, the Borrower shall furnish to the Association, prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect thereof, such documentation and information as the Association may reasonably request to support withdrawal applications in respect of such contract. Where payments under a contract are to be made out of the proceeds of Special Account B, the documentation and the information to be furnished to the Association pursuant to the provisions of this paragraph shall be furnished to the Association as part of the evidence required under paragraph 4 of Schedule 3 to this Agreement. 5. The provisions of the preceding paragraph 4 of this Schedule shall not apply to contracts on account of which the Association has authorized withdrawals from the Credit Account on the basis of statements of expenditure. Section II. Employment of Consultants for Category (5) (a) of paragraph 1 of Schedule 1 to this Agreement In order to assist the Borrower in the carrying out of Part C of the Project, the Borrower shall employ consultants and experts whose qualifications, experience and terms and conditions of employment shall be satisfactory 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 Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981.