Afghanistan - Second Livestock Development Project : Credit 0649 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 649 AF DEVELOPMENT CREDIT AGREEMENT (Second Livestock Development Project) between REPUBLIC OF AFGHANISTAN and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated June 28, 1976 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated June 28, 1976, between REPUBLIC OF AFGHAN- ISTAN (hereinafter called the Borrower) and INTERNATIONAL DEVEL- OPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) The Borrower has requested the Association to as- sist in the financing of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) The Project will be carried out partly by the Ministry of Agriculture of the Borrower, nartly by the Herat Livestock De- velopment Company (hereinafter called HLDC), a joint-stock company duly established under the laws of the Borrower, and partly by the Agricultural Development Bank of Afghanistan (hereinafter called AgBank), a joint-stock company duly established under the laws of the Borrower, with the Borrower's assistance and, as part of such assistance, the Borrower will make available to HLDC and AgBank part of the proceeds of the Credit as hereinafter provided; and (C) The Association is willing to make the Credit available upon the terms and conditions set forth hereinafter and in a proj- ect agreement of even date herewith between the Association, HLDC and AgBank; NOW THEREFORE the parties hereto hereby agree as follows: -2- 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 March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agree- ments of the Association being hereinafter called the General Con- ditions). Section 1.02. Wherever used in this Agreement, unless the con- text otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Project \greement" means the agreement between the Association, HLDC and AgBank of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement; (b) "First Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower, HLDC and AgBank pursuant to Section 3.01 (c) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the First Subsidiary Loan Agreement; (c) "Second Subsidiary Loan Agreement" means the agreement to be entered into between HLDC and AgBank pursuant to Section 3.02 -3- of the Project Agreement, as the same may be amended from time to time and such term inciudes all schedules to the Second Subsidiary Loan Agreement; (d) "Subsidiary Loan Agreements" means the First Subsidiary Loan Agreemen: and the Second Subsidiary Lean Agreement; (e' "Subsidiary Loan" means the amount to be relen: t AgBank out of the proceeds of the Credit in accordance with Section 3.01 (d) (i) of this Agreement; (f) "Subsidiary Fund" means the amount to be maCie available to AgBank out of the proceeds of the Credit in accordance with Sectior 3.01 (d) (ii) of this Agreement; (g) "Project Area" means an area of about 100,000 km2 located in the nrovinces of Herat, Badghis, Farah and Ghor; (h' "Charter" means Charter of AgBank as approved by the Borrower under Cabinet Resolution Number 2911 of January 19, 1970 (Afghan Calender Jaddi 29, 1348), confirmed by Decree Number .J32,/3768 of January 21, 1970 (Afghan Calender Dalw 1, 1348), approved by the AgBank's Extraordinary General Assembly of Share- holders on February 1, 1970 (Dalw 12, 1348), and published in the Official Gazette Number 150 of February 11, 1970 (Dalw 22, 1348), and as the same may be amended from time to time; (i, "Articles Df Incorporation" means the Articles of Incor- poration of LI, dated April 29, 1973 (Saur 9, 1352), as the same may ce -.uenaed .-rom time to time; (j) "ERIC Field Stations" means the two field stations of the Experimental Range Improvement Center of HLDC which are to be established in accordance with Section 2.09 (c) of the Project Agreement; (k) "SICs" means the Sheep Improvement Centers and their outstations to be established by HLDC in accordance with Section 2.09 (a) of the Project Agreement; (1) "ADCCs" means the Animal Disease Control Centers and their subcenters to be established by HLDC in accordance with Section 2.09 (b) of the Project Agreement; (m) "PCFO" means the Project Co-operative Field Organization to be established within the Department of Co-operative Development of the Ministry of Agriculture of the Borrower in accordance with Section 3.03 (a) of this Agreement; (n) "First Livestock Development Project" means the Livestock Development Project undertaken in accordance with the provisions of the Development Credit Agreement between the Borrower and the Asso- ciation and the Project Agreement between the Association, HLDC and AgBank (Credit Number 375 AF) dated May 2, 1973; and (o) "Afghani" means the currency of the Borrower. - 5 - ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equiva- lent to fifteen million dollars ($15,000,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Association, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services re- quired for the Project and to be financed out of the proceeds of the Credit. Section 2.03. Except as the Borrower and the Association shall * otherwise agree, the goods and works for the Project to be financed out of the proceeds of the Credit, shall be procured in accordance * with the provisions set forth or referred to in Section 2.03 of the Project Agreement. Section 2.04. The Closing Date shall be December 31, 1982, or such later date as shall be agreed between the Borrower and the Association. 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 -6- of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Service charges shall be payable semi-annually on June 15 and December 15 in each year. Section 2.07. The Borrower shall repay the principal amunt of the Credit in semi-annual installments payable on each June 15 and December 15 commencing December 15, 1986, and ending June 15, 2026, each installment to and including the installment payable on June 15, 1996, 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 the United States of America is hereby specified for the purposes of 3ection 4.02 of the Gen- eral Conditions. Section 2.09. The Minister of Planning of the Borrower or the President or Vice-President of AgBank is designated as repre- sentative 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. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out or cause (i) its Department of Co-operative Development to carry out Part D of the Project; and (ii) its Department of Veterinary Services to carry out Part F of the Project, with the assistance of ELDC, with due diligence and efficiency and in conformity with appropriate ad- ministrative, agricultural, and livestock development practices, and shall provide, promptly as needed, the funds, facilities, ser- vices and other resources required for the purpose. (b) Without any limitation or restriction upon any of its other obligations under the Development Credit Agreement, the Bor- rower shall cause HLDC and AgBank to perform in accordance with the provisions of the Project Agreement and the Subsidiary Loan Agreements all the obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, * facilities, services and other resources, necessary or appropriate to enable HLDC and AgBank to perform such obligations, and shall * not take or permit to be taken any action which would prevent or interfere with such performance. (c) The Borrower shall make part of the proceeds of the Credit available to AgBank under a First Subsidiary Loan Agree- ment to be entered into between the Borrower, HLDC and AgBank under terms and conditions satisfactory to the Borrower and the Association, including, inter alia, those terms and conditions set forth in paragraph (d) of this Section and in Schedule 2 to the Project Agreement. -8- (d) The First Subsidiary Loan Agreement shall provide that: (i) the Borrower shall relend to AgBank an amount in various currencies equivalent to four million dol- lars $4,000,000) out of the proceeds of the Cred- it or such other amount as may be allocated to Categories (2) and (3) of paragraph 1 of Schedule 1 to this Agreement, for a term of 15 years, in- cluding 5 years of grace, and at an interest rate of 4-1/2% per annum on amounts withdrawn and out- standing from time to time; and (ii) the Borrower shall make available to AgBank an amount in various currencies equivalent to eight million one hundred fifty thousand dollars ($8,150,000) out of the proceeds of the Credit or such other amount as may be allocated to Categories (1) and (6) of paragraph 1 of Schedule 1 to this Agreement, -to be made available to HLDC. (e) The Borrower shall make available to the Department of Co-operative Development of its Ministry of Agriculture an amount in various currencies equivalent to two hundred thousand dollars ($200,000) out of the proceeds of the Credit or such other amount as may be allocated to Category 4 of paragraph 1 of Schedule 1 to this Agreement. (f) The Borrower shall make available to the Department of Veterinary Services of its Ministry of Agriculture an amount in various currencies equivalent to one hundred ninety thousand 9 dollars ($190,000) out of the proceeds of the Credit or such other amount as may be allocated to Category 5 of paragraph 1 of Schedule 1 to this Agreement. (g) Whenever in connection with this Section of this Agree- ment it shall be necessary to value the proceeds of the Credit in terms of Afghanis, such valuation shall be made on the basis of the Da Afghanistan Bank free market rate of exchange. If at any time, the Borrower or the Association considers that circum- stances have arisen as a result of which such valuation has ceased to be possible, the parties shall consult together about what action is necessary for such valuation. (h) The Borrower shall exercise its rights under the First Subsidiary Loan Agreement in such manner as to protect the inter- ests of the Borrower and the Association and to accomplish the purposes of the Credit, and except as the Borrower and the Asso- ciation shall otherwise agree, the Borrower shall not assign, nor amend, abrogate or waive the First Subsidiary Loan Agreement or any provision thereof. Section 3.02. Without any limitation or restriction upon any of its obligations under Section 3.01 (a) of this Agreement, the Borrower shall: (a) make available to HLDC, through AgBank, under arrange- ments satisfactory to the Borrower and the Association, including, inter alia, those set forth or referred to in Schedule 2 to the Project Agreement, an amount equal to Af 75,350,000 ($1,370,000 equivalent), out of its own resources as capital grant for pur- poses of Parts A and C of the Project; - 10 - (b) make available to the Department of Co-operative Develop- ment of its Ministry of Agriculture an amount equal to Af 1,650,000 ($30,000 equivalent) out of its own resources as capital grant for purposes of Part D of the Project; and (c) take or cause to be taken all action which shall be nec- essary to make available suitable areas of irrigable land totalling not less than 1,650 ha for the settlement of nomadic families for purposes of Part B (1) of the Project and shall furnish to the Association, promptly thereafter, evidence satisfactory to the Association that such land and rights in respect of land are avail- able for purposes related to the Project. Section 3.03. (a) Not later than six months after the Effec- tive Date, or such other date as shall be agreed between the Bor- rower and the Association, the Borrower shall take or cause to be taken all action which shall be necessary on its part to establish, and thereafter, maintain, PCFO within the Department of Co-operative Development of its Ministry of Agriculture to organize and assist livestock co-operative groups within the Project Area. The Borrower shall ensure that PCFO is adequately staffed at all times with duly qualified and competent persons. The terms of reference of PCFO shall be satisfactory to the Borrower and the Association. (b) In order to assist the Borrower in the establishment and administration of PCFO, the Borrower shall employ or cause to be employed a co-operatives expert whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Borrower and the Association. - 11 - (c) The Borrower shall cause PCFO to nominate and select its candidates for overseas training under Part E (3) of the Project in accordance with arrangements satisfactory to the Borrower and the Association. Section 3.04. The Borrower shall: (a) provide or cause to be provided to HLDC, for use by its ADCCs and their subcenters, timely and adequate quantities of viable vaccines and medicaments; and (b) not later than six years after the Effective Date, take or cause to be taken all action which shall be necessary to ensure the full recovery (i) of the cost of vaccines and medicaments dis- pensed in the Project Area; and (ii) of the operating expenses in- curred in dispensing the above vaccines and medicaments. Section 3.05. The Borrower: (i) shall cause its Department of Co-operative Development and the Department of Veterinary Services to maintain records adequate to record the progress of Part D and Part F of the Project (including the cost thereof), respectively, and to identify the goods, works and services financed out of the proceeds of the Credit, and to disclose the use thereof in said Parts of the Project; (ii) shall cause its Department of Veterinary Services to enable the Association's accredited representatives to visit the facilities and construction sites included in Part F of the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall cause to be furnished to the Association the plans, specifi- cations, reports and contract documents and procurement schedules for Parts D and F of the Project and all such information as the - 12 - Association shall reasonably request concerning Parts D and F of the Project, the expenditure of the proceeds of the Credit and the goods, works and services financed out of such proceeds. - 13 - ARTICLE IV Consultation and Information Section 4.01. The Borrower and the Association shall cooperate fully to ensure that the purposes of the Credit will be accomplished. To that end, the Borrower and the Association shall from time to time, at the request of either party, exchange views through their representatives with regard to the performance of their respective obligations under the Development Credit Agreement, the performance by HLDC and AgBank of their respective obligations under the Proj- ect Agreement and the Subsidiary Loan Agreements, the administra- tion, operations and financial condition, resources and expendi- tures of HLDC and AgBank and, in respect of the Project, of the Ministry of Agriculture of the Borrower and other matters relating to the purposes of the Credit. Section 4.02. (a) The Borrower shall cause to be furnished to the Association all such information as the Association shall rea- sonably request concerning the administration, operations and finan- cial condition of HLDC and AgBank and, in respect of the Project, of the Ministry of Agriculture of the Borrower. (b) The Borrower and the Association shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Credit, the maintenance of the service thereof, the performance by the Borrower, its Ministry of Agriculture and the Association of their obligations under the Development Credit Agreement and the performance by HLDC and AgBank of their obligations under the Project Agreement and the Subsidiary Loan Agreements. ARTICLE V Other Covenants Section 5.01. The Borrower shall maintain or cause to be maintained separate records adequate to reflect in accordance with consistently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower respon- sible for carrying out Parts D and F of the Project. 15 - 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: (a) A default shall occur in the performance of any obliga- tion on the part of HLDC or AgBank under the Project Agreement or the Subsidiary Loan Agreements. (b) HLDC or AgBank shall have become financially insolvent or any action or proceedings shall have been taken by HLDC or AgBank or by others whereby any of the property of HLDC or AgBank shall or may be distributed among their creditors. (c) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of HLDC or AgBank or for the suspension of their operations. (d) The Project Agreement or the Subsidiary Loan Agreements or any material provision thereof shall have been amended, sus- pended, abrogated or waived without the prior approval of the Association. (e) The Articles of Incorporation or the Charter shall have been amended, suspended, abrogated, repealed, waived, or shall cease to be enforced, so as to materially and adversely affect the ability of HLDC and AgBank to perform their respective obligations under the Project Agreement or the Subsidiary Loan Agreements. - 16 - Section 6.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (d) thereof: (a) the events specified in paragraphs (a), (b) or (d) of Section 6.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower, HLDC and AgBank; and (b) any event specified in paragraphs (c) and (e) of Section 6.01 of this Agreement shall occur. II ARTICLE VII Effective Date; Termination Section 7.01. The following events are specified as additional 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 of the Project Agreement on behalf of HLDC and AgBank, respectively, have been duly authorized or ratified by all necessary governmental and corporate action; (b) the execution and delivery of the First Subsidiary Loan Agreement on behalf of the Borrower, HLDC and AgBank, respectively, have been duly authorized or ratified by all necessary governmental and corporate action; and (c) the execution and delivery of the Second Subsidiary Loan Agreement on behalf of HLDC and AgBank, respectively, have been duly authorized or ratified by all necessary governmental and cor- porate action. Section 7.02. The following are specified as additional mat- ters, within the meaning of Section 12.02 (b) of the General Con- ditions, to be included in the opinion or opinions to be furnished to the Association: (a) that the Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, HLDC and AgBank, respectively, and is legally binding upon HLDC and AgBank in accordance with its terms; - 18 - (b) that the First Subsidiary Loan Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, the Borrower, HLDC and AgBank, respectively, and is legally bind- ing upon the Borrower, HLDC and AgBank in accordance with its terms; and (c) that the Second Subsidiary Loan Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, HLDC and AgBank, respectively, and is legally binding upon HLDC and AgBank in accordance with its terms. Section 7.03. The date September 27, 1976, is hereby speci- fied for the nurposes of Section 12.04 of the General Conditions. Section 7.04. The obligations of the Borrower under Sections 3.01 (g) and 5.01 of this Agreement and the Drovisions of para- graphs (a) through (e) of Section 6.01 of this Agreement and those of Section 6.02 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date twenty-five years after the date of this Agreement, which- ever shall be the earlier. -19 - ARTICLE VIII Representative of the Borrower; Addresses Section 8.01. The Minister of Planning of the BorrQwer 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 the Borrower: Ministry of Planning Kabul Republic of Afghanistan Cable address: MINPLAN Kabul, Afghanistan For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. - 20 - IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agree- ment 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 AFGHANISTAN By /s/ M. E. Abdullah Malikyar Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Willi A. Wapenhans Regional Vice President Eurore, Middle East and North Africa - 21 - SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed, in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) HLDC - Administration SICs, ADCCs and ERIC Field Stations (a) Vehicles and 1,000,000 100% of foreign Equipment expenditures or 85% of local expenditures (b) Civil Works and 2,600,000 85% Operating Ex- penses (c) Vaccine and Medi- 2,400,000 100% of foreign caments expenditures or 100% of local expenditures (ex-factory cost) (2) Heavy Equipment and Water Supply Division (a) Vehicles and 870,000 100% of foreign Equipment expenditures or 85% of local expenditures - 22 - Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (b) Civil Works and 230,000 85% Operating Ex- penses (3) On-Farm Development 2,900,000 80% of the amounts disbursed by AgBank (4) Project Co-operative Field Organization (a) Vehicles and 20,000 100% of foreign Equipment expenditures or 85% of local expenditures (b) Civil Works and 180,000 85% Operating Ex- penses (5) Kabul Vaccine Produc- 190,000 100% of foreign tion Laboratory expenditures or 85% of local expenditures (6) Consultant Services 2,150,000 100% of foreign and Training of expenditures Afghan staff (7) Unallocated 2,460,000 TOTAL 15,000,000 -23- 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower, or for goods produced in, or services supplied from, the territory of the Borrower. 3. Notwithstanding the provisions of paragraph I above, no with- drawals shall be made in respect of: (a) expenditures prior to the date of this Agreement; and (b) payments for taxes imposed under the laws of the Borrower or laws in effect in its territories on goods or services, or on the importation, manufacture, procurement or supply thereof. To the extent that the amount represented by the percentage set forth in the third column of the table in paragraph 1 above in respect of any Category would exceed the amount payable net of all such taxes, such percentage shall be reduced to ensure that no proceeds of the Credit will be withdrawn on account of payments for such taxes. 4. Notwithstanding the allocation of an amount of the Credit set forth in the second column of the table in paragraph 1 above: (a) if the estimate of the expenditures under any Category shall decrease, the amount of the Credit then allocated to such Category and no longer required therefor will be reallocated by the Association by increasing correspondingly the unallocated amount of the Credit; (b) if the estimate of the expenditures under any Category shall increase, the percentage set forth in the third column of the table in paragraph 1 above in respect of such expenditures shall be applied to the amount of such increase, and a correspond- ing amount will be allocated by the Association at the request of the Borrower, to such Category from the unallocated amount of the Credit, subject, however, to the requirements for contingencies, as determined by the Association, in respect of any other expendi- tures; and (c) 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 Section 2.03 of the Project Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restricting or limiting any other right, power or rem- edy of the Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as in the Association's reasonable opinion, represents the amount of such ex- penditures which would otherwise have been eligible for financing out of the proceeds of the Credit. 5. Notwithstanding the percentages set forth in the third column of the table in paragraph 1 above, if the estimate of expenditures under Categories 1 (b), 2 (b), 3 and 4 (b) and the estimate of lo- cal expenditures under Categories 1 (a), 2 (a), 4 (a) and 5 shall - 25 - increase and no proceeds of the Credit are available for realloca- tion to such Category, the Association may, by notice to the Bor- rower, adjust the percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. In the event the Borrower and the Association agree that the establishment and operation of a wool-scouring plant is economically justified by the study referred to in Part G of the Project and that sufficient funds are available under Category 7, the Borrower and the Association may by an amendment to this Schedule alloca - an ap- propriate amount for the financing of the wool-scouring plant. - 26 - SCHEDULE 2 Description of the Project The Project is designed to complement the First Livestock Development Project and consists of the following Parts: Part A: ERIC Field Stations, ADCCs and SICs Establishment by HLDC of two Field Stations for its Experi- mental Range Improvement Center (ERIC Field Stations) to carry out improved range management practices, pasture spe- cies introduction and range observations and obtain more de- tailed information on nomadic and semi-nomadic flocks; of two Animal Disease Control Centers (ADCCs), each with six subcenters, to provide for essential veterinary health ser- vices in the Project Area; and of about fourteen Sheep Im-- provement Centers (SICs), each with about six outstations, to serve as the nuclei for essential field services to sheep producers in the Project Area and as the bPises of operation for the ADCCs and their subcenters. Vehicles and equipment will also be provided for ERIC Field Stations, ADCCs and SICs. In addition, about seven of the SICs are each to have a de- monstration farm production unit of about 40 ha for the pro- duction of cereal grains and fodder crops to be used for the fattening of autumn-purchased lambs. Part B: On-Farm Development Provision of loans by AgBank to assist: - 27 - (1) About 50 individual farmers, 700 co-operative members, and about 300 nomadic families to be settled under the Project on Government allotted land, for financing in- vestments in on-farm development including: (i) installation of wells and pumpsets; (ii) construction of new irrigation works and improving existing works; (iii) fodder establishment; (iv) purchase of livestock; and (v) construction of simple stock housing. (2) About 50 co-operative groups for financing the installa- tion of communal water supply systems. Part C: Heavy Equipment and Water Supply Division Establishment by HLDC, with the financial assistance of AgBank, of a Heavy Equipment and Water Supply Division in Herat for the construction of wells and farm access roads including: (1) construction of a small headquarters office, workshop and soils laboratory; (2) provision of equipment and vehicles for (1) above; and - 28 - (3) provision of staff and operation and maintenance costs for the first year of operation. Part D: PCFO Establishment and staffing, including a provision for vehicles and equipment, of a Project Co-operative Field Organization by the Ministry of Agriculture of the Borrower through its Depart- ment of Co-operative Development in Herat to organize and assist in the operations of primiary co-operatives for livestock producers in the Project Area. Part E: Management, Technical Services and Training (1) Continuation of about four positions of experts (Project Advisor, Agriculturist, Livestock Expert and Range Improve- ment Specialist) provided for under the First Livestock Development Project and the provision of the services of seven additional experts to assist in the implementation of the Project. (2) Services of short-term consultants to be employed, as needed, for special assignments. (3) Provision of overseas training fellowships for local Project staff. Part F: Kabul Vaccine Production Laboratory The establishment of a viability testing unit and the provi- sion of equipment for Vaccine Production Laboratory in Kabul. -29 - Part G: Study The carrying out of a marketing and engineering study, with terms of reference satisfactory to the Borrower and the Association, of a wool-scouring plant at Herat.