Togo - Maritime Region Rural Development Project : Credit 0638 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 638 TO DEVELOPMENT CREDIT AGREEMENT (Maritime Region Rural Development Project) between REPUBLIC OF TOGO and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated June 16, 1976 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated June 16, 1976, between the REPUBLIC OF TOGO (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) the Borrower has requested the Association to assist in the financing of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; and (B) the Borrower intends to contract from the Fonds d'Aide et de Cooperation of the French Republic a grant (hereinafter called the French Grant) in an amount of ten million French Francs (FF10,000,000) to assist in financing part of the Project on the terms and conditions set forth in an agreement (hereinafter called the Convention de Financement) to be entered into between the Bor- rower and the Republic of France; 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: -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 Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following ad- ditional terms have the following meanings: (a) "SORAD Maritime" means the Societe R4gionale d'Amenage- ment et de Developpement for the Borrower's Maritime Region, an autonomous public corporation of the Borrower established pur- suant to Law No. 65-30 dated December 22, 1965, or any successor thereto; (b) "CNCA" means Caisse Nationale de Credit Agricole, a credit institution of the Borrower established in 1967 to provide credit for the agricultural sector, or any successor thereto; (c) "CNCA Branch" means the credit branch established at Tsevie by CNCA; -3- (d) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and CNCA pursuant to Section 3.02 (a) of this Agreement; (e) "Project Account" means the account referred to in Sec- tion 3.02 (b) of this Agreement; (f) "Revolving Fund" means the fund referred to in Section 3.03 of this Agreement; (g) "Input Supply Unit" means the unit to be established by SORAD Maritime with responsibilities as set forth in Section 3.07 of this Agreement; (h) "Farmer Groups" means precooperative groups of eight to fifteen farmers each, organized through SORAD Maritime; and (i) "CFA Francs" and "CFAF" mean the currency of the Borrower. -4- 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 nine million five hundred thousand dollars ($9,500,000). 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 required for the Project and to be financed out of the proceeds of the Credit. Section 2.03. Except as the Association shall otherwise agree, contracts for the purchase of goods or for civil works to be fi- nanced out of the proceeds of the Credit shall be procured in ac- cordance with the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1981 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. 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. -5- Section 2.06. Service charges shall be payable semi-annually on June 1 and December 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each June 1 and December 1 commencing December 1, 1986, and ending June 1, 2026, each installment to and including the installment payable on June 1, 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 French Republic is hereby specified for the purposes of Section 4.02 of the General Condi- tions. -6- ARTICLE III Execution of the Project Section 3.01. The Borrower shall carry out the Project, or cause the Project to be carried out through SORAD Maritime and CNCA, with due diligence and efficiency, under competent manage- ment and in conformity with appropriate administrative, agricul- tural, engineering and financial practices, and shall provide, promptly as needed, the staff, funds, facilities, services and other resources required for the purpose. Section 3.02. Pursuant to Section 3.01 above, the Borrower shall: (a) make the proceeds of the Credit allocated to the sever- al parts of the Project available to SORAD Maritime, CNCA or the Borrower's agencies, as the case may be, on terms and conditions satisfactory to the Association; provided that the amount of such proceeds allocated for the purchase of equipment and coconut seedlings under Part A.2 of the Project shall be relent to CNCA for 15 years including 7 years' grace with interest at 5.5% per annum under a Subsidiary Loan Agreement satisfactory to the Asso- ciation; and (b) establish in the name of SORAD Maritime in the Borrower's Treasury on terms and conditions satisfactory to the Association, and maintain until the completion of the Project, a Project Account -7- for the purpose of prefinancing the carrying out of those Parts of the Project which are the responsibility of SORAD Maritime. In addition to the initial deposit into such account to be made by the Borrower pursuant to Section 6.01 (e) of this Agreement, the Project Account shall be replenished every three months by the Bor- rower by deposits in amounts certified by the Project Manager as necessary to carry out such Parts of the Project during the follow- ing three months. Section 3.03. Without limitation or restriction upon the provisions of Section 3.01 of this Agreement, for the purpose of procuring fertilizers and pesticides to be furnished to farmers under the Project, unless the Association shall otherwise agree and unless the Borrower shall evidence the establishment of a structure at the national level acceptable to the Association, the Borrower shall: (a) establish and maintain a Revolving Fund at CNCA; (b) deposit in such Fund an initial amount equivalent to thirty million CFAF (CFAF30,000,000); (c) reimburse such Fund annually for the amount of govern- mental subsidy included in the total costs of fertilizers and pesticides including procurement and distribution thereof, as recorded by the Input Supply Unit in coordination with CNCA Branch; and (d) replenish such Fund annually, out of the proceeds of the Credit, for the incremental costs of fertilizers and pesticides as projected for the following year by the Input Supply Unit pursuant to Section 3.07 (a) hereof. -8- Section 3.04. The Borrower shall cause SORAD Maritime: (a) to employ at all times a Project Manager with qualifications, powers and responsibilities satisfactory to the Association, who shall be assisted inter alia by an administrative and financial director, a chief of the engineering unit and a technical director assisted himself inter alia by a training specialist, a research specialist and a full-time seed production officer, to be appointed not later than December 31, 1976 or such other date as the parties to this Agreement shall agree and whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association; and (b) to promptly appoint qualified nationals to serve as deputies to management staff referred to above when internationally recruited. Section 3.05. The Borrower shall, not later than December 31, 1976 or such other date as the parties to this Agreement shall agree, cause SORAD Maritime to exchange views with the Association on a comprehensive training program to be prepared by the training specialist referred to in Section 3.04 of this Agreement. Section 3.06. Unless the Borrower and the Association shall otherwise agee: (a) With respect to Part D.2 (a) of the Project, the Borrower shall (i) cause the research specialist referred to in Section 3.04 of this Agreement to design a detailed field trial program in coor- dination with the Institut de Recherches Agronomiques Tropicales et Cultures Vivrieres and the International Institute of Tropical Agri- culture in Nigeria and, (ii) promptly enter into arrangements satis- factory to the Association with such institutions to carry out such program. -9- (b) Not later than December 31, 1976 the Borrower shall enter into an agreement satisfactory to the Association with Institut de Recherches sur les Huiles et Oleagineux, setting forth the details and budget of the coconut trial program included into Part D.2 (b) of the Project. Section 3.07. Unless the Borrower and the Association shall otherwise agree, in carrying out Part A.1 of the Project, the Bor- rower shall cause SORAD Maritime: (a) to establish within three months from the date of this Agreement an Input Supply Unit which (i) shall be responsible for determining farm input and equipment needs on the basis of esti- mates collected by SORAD Maritime extension services, for procuring said farm inputs and equipment and organizing their distribution; and (ii) shall maintain records adequate to identify the total costs of said farm inputs and equipment, including procurement, handling and distribution costs, and the amount of governmental subsidy included therein, if any; and (b) to review by June 30, 1980, the operations and activities of the Input Supply Unit in consultation with the Association in order to appraise its prospects for operating on a commercial basis for the benefit of farmers' cooperatives. Section 3.08. Unless the Borrower and the Association shall otherwise agree: (a) In order to assist SORAD Maritime in carrying out the study referred to in Part D.1 of the Project, the Borrower shall - 10 - cause SORAD Maritime to employ, not later than December 31, 1976, engineering and design consultants whose qualifications, experience and terms and. conditions of employment shall be satisfactory to the Association. (b) For the purpose of monitoring and evaluating the Project, the Borrower shall, not later than November 30, 1976, establish a Project Monitoring and Evaluation Unit, employ therefor con- sultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association and shall require said consultants, not later than three months following such employment, to submit a program to the Borrower to be reviewed by the Association. (c) In order to assist the Borrower in carrying out Part D.3 of the Project, the Borrower shall employ consultants whose quali- fications, experience and terms and conditions of employment shall be satisfactory to the Association. Section 3.09. Except as the Association shall otherwise agree, until the completion of the Project, the Borrower shall cause SORAD Maritime: (a) not to undertake any additional activities beyond the scope of the Project, except with the prior consent of the Borrower and the Association; and (b) to make a comprehensive review of all its activities, the resul's of which shall be discussed with the Association not later than June 30, 1977. Section 3.10. For the carrying out of Part A.2 of the Project, the Borrower shall cause SORAD Maritime to: (a) initially purchase ten power tillers to be made available to farmers under appropriate - 11 - terms; (b) report to the Association on the performance of these tillers; (c) subsequently agree with the Association on the pur- chase of additional tillers; and (d) at all times, maintain an appropriate stock of spare parts for purchased tillers. Section 3.11. The Borrower shall cause CNCA: (a) to maintain the CNCA Branch, responsible for processing credits to farmers and Farmer Groups in coordination with SORAD Maritime, as set forth in Schedule 4 to this Agreement; and (b) to appoint: (i) a qualified and experienced senior credit specialist to serve as head of the CNCA Branch, with powers and re- sponsibilities satisfactory to the Association; and (ii) four qualified and experienced credit assistants with appropriate geo- graphic responsibilities, who shall serve under the supervision of the head of the CNCA Branch. Section 3.12. Prior to initiating the construction of feeder and secondary roads and tubewells and dams inclvded in Part C of the Project, the Borrower shall present to the Association for its approval on the basis of annual work plans: (a) a detailed con- struction and improvement program of feeder and secondary roads, setting forth timing and supervision of construction, design stan- dards and maintenance of these roads; and (b) an engineering design and construction program of tubewells and dams for which operating and maintenance expenses shall be met under appropriate arrange- ments. - 12 - Section 3.13. The Borrower shall: (a) cause SORAD Maritime to carry out the construction and equipment of the dispensaries included in Part C of the Project at sites selected in agreement with the Association; and (b) thereafter, through its Ministry of Health, take over the facilities and ensure that these dispensaries are appropriately staffed, maintained and supplied. Section 3.14. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit against hazards in- cident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any in- demnity shall be payable in a currency freely usable by the Bor- rower to replace or repair such goods. (b) Except as the Association shall otherwise agree, all gocds and services financed out of the proceeds of the Credit shall be used exclusively for the Project until its completion. Section 3.15. (a) The Borrower shall furnish or cause to be furnished to the Association, promptly upon their preparation, the -Ilans, specifications, reports, contract documents and construction, 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: (i) shall maintain or cause SORAD Maritime, CNCA and any ministries, departments or agencies of the Borrower responsible for carrying out the Project or any part thereof, to maintain records adequate to record the progress of the Project -13 - (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Credit, and to disclose the use thereof in the Project; (ii) shall enable the Association's accredited representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish or cause to be furnished to the Association all such information as the Association shall reason- ably request concerning the Project, the expenditure of the pro- ceeds of the Credit and the goods and services financed out of such proceeds. Section 3.16. The Borrower shall take or cause to be taken all such action as shall be necessary to acquire as and when needed all such land and rights in respect of land as shall be required for the construction and operation of the facilities included in the Project. - 1J4 ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consis- tently maintained sound accounting practices the operations, re- sources and expenditures - in respect of the Project - of the minis- tries, departments or agencies of the Borrower, including SORAD Maritime and CNCA, responsible for carrying out the Project or any part thereof. (b) Without limitation or restriction upon the foregoing paragraph, the Borrower shall cause SORAD Maritime and CNCA to maintain separate accounts adequate to reflect in accordance with consistently maintained sound accounting practices the operations, resources and expenditures in respect of the Input Supply Unit, the Revolving Fund and the Project Account. (c) The Borrower shall cause SORAD Maritime and CNCA to: (i) have their accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with sound auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of their financial statements for such year as so audited and (B) the report of such audits by said auditors, of such scope and in such detail as the Association I -15 - shall have reasonably requested; and (iii) furnish to the Associa- tion such other information concerning the accounts and financial statements of SORAD Maritime and CNCA and the audits thereof as the Association shall from time to time reasonably request. Section 4.02. The Borrower shall cause SORAD Maritime and CNCA to take out and maintain with responsible insurers, or to make other provision satisfactory to the Association for, in- surance against such risks and in such amounts as shall be con- sistent with appropriate practice. Section 4.03. The Borrower shall (a) maintain or cause SORAD Maritime and CCA to adequately maintain the buildings, equipment, vehicles, roads and other facilities included in the Project and financed out of the proceeds of the Credit, and make all necessary repairs and renewals thereof; and (b) provide promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 4.04. For the purpose of following a price policy aiming at progressively reflecting the full cost of farm inputs such as fertilizers and pesticides in the prices charged to farm- ers for said inputs, the Borrower shall not less than once a year, exchange views with the Association on prices applicable. Section 4.05. The Borrower shall afford the Association a reasonable opportunity to exchange views with the Borrower on any proposed reorganization of extension and other farmers' support services as may concern the Project. - 16 - ARTICLE V Remedies of the Association Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) the Borrower or any authority having jurisdiction shall have taken any action for the dissolution or transformation of SORAD Maritime or for the suspension of its operations, unless the Borrower shall have taken such steps as shall be necessary to ensure the due carrying out of all obligations under this Agree- ment; (b) the Borrower or any authority having jurisdiction shall have taken any action for the dissolution or transformation of CNCA or for the suspension of its operations, including CNCA Branch, unless the Borrower shall have taken such steps as shall be neces- sary to ensure the due carrying out of all obligations under this Agreement; (c) a default shall have occurred in the performance of any covenant, agreement or obligation on the part of the Borrower or CNCA under the Subsidiary Loan Agreement; (d) (i) Subject to subparagraph (ii) of this paragraph, the right of the Borrower to withdraw the proceeds of the French Grant made to the Borrower for the financing of the Project shall have been suspended, 17 -1- cancelled or terminated in whole or in part, pursuant to the terms of the Convention de Financement therefor. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the sat- isfaction of the Association that: (A) such suspension, cancellation or termination is not caused by the failure of the Borrower to perform any of its obligations under the Convention de Financement, 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 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (d) thereof: (a) any event specified in paragraphs (a) or (b) of Section 5.01 of this Agreement shall occur; and (b) any event specified in paragraphs (c) or (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. - 18 - ARTICLE VI Effective Date; Termination Section 6.01. 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 Association has been notified by the Fonds d'Aide et de Cooperation that all conditions precedent to the initial disbursement under the Convention de Financement, if any, save only the effectiveness of this Agreement, have been fulfilled; (b) The Subsidiary Loan Agreement has been entered into by the Borrower and CNCA; (c) The administrative and financial director and the tech- nical director referred to in Section 3.04 of this Agreement, and the head of the CNCA Branch referred to in Section 3.11 (b) (i) of this Agreement, have been appointed; (d) The Revolving Fund has been established and the initial deposit required by Section 3.03 (b) of this Agreement has been made; and (e) The Project Account has been established with an initial deposit of CFAF 70 million. - 19 - Section 6.02. The date September 14, 1976 is hereby speci- fied for the purposes of Section 12.04 of the General Conditions. Section 6.03. The obligations of the Borrower under Article IV of this Agreement and the provisions of Section 5.02 of this Agree- ment shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date fifteen years after the date of this Agreement, whichever shall be the earlier. - 20 - ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Ministre des Finances et de l'Economie of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministere des Finances et de l'Economie Lome Togo Cable address: Telex: MINIFINANCES 9865286 Lom6 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) - 21 - 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 TOGO By Is/ Messanvi Kokou Kekeh Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Roger Chaufournier Regional Vice President Western Africa - 22 - SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be fi- nanced out of the proceeds of the Credit, the allocation of the amount of the Credit to each Category and the percentage of ex- penditures 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) (a) Fertilizers and 400,000 ) pesticides (in- ) cremental costs) ) under Part A.1 ) 80% of foreign . of the Project ) expenditures or 60% of total ex- (b) Materials and 370,000 ) penditures equipment un- ) der Part A.2 ) (2) SORAD Maritime for: (a) Building con- 70,000 ) struction (b) Vehicles, 690,000 ) equipment and ) 80% of foreign office furnish- ) expenditures or ings ) 60% of total ex- penditures (c) Incremental 1,690,000 ) staff salaries ) and training ) grants (d) Other incre- 390,000 ) mental opera- ) ting costs ) 23 - 5-12-76 Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (3) CNCA for: (a) Building con- 20,000 ) struction (b) Vehicles, 40,000 ) equipment and ) office furnish- ) ings (c) Staff salaries 310,000 ) 80% of foreign and training ) expenditures or grants ) 60% of total ex- penditures (d) Other opera- 70,000 ) ting costs ) (4) Civil Works under 2,250,000 60% Part C (5) Consultants' ser- vices for: (a) Part D.3 300,000 100% (b) Other Parts of 520,000 80% the Project (6) Unallocated 2,380,000 TOTAL 9,500,000 - 24 2.. For the purposes of this Schedule, the term "foreign expendi- tures" 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; provided, how- ever, 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". 3. The disbursement percentages have been calculated in compli- ance with the policy of the Association that no proceeds of the Credit shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in re- spect of any item to be financed out of the proceeds of the Credit decreases or increases, the Association may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Association. 4. Notwithstanding the provisions of paragraph I above, no with- drawals shall be made: (a) in respect of payments made for expendi- tures prior to the date of this Agreement; (b) expenditures included in Category (1) (b) for additional power tillers unless the Asso- ciation shall have given its agreement pursuant to Section 3.10 (c) of this Agreement, and in Category (2) (b) for pumps required for the carrying out of Part A.3 of the Project unless SORAD Maritime has furnished evidence satisfactory to the Association that water charges are collected; and (c) expenditures included in Category -25 - (1) (a) for fertilizers and pesticides unless the Borrower has made the reimbursements to the Revolving Fund pursuant to Section 3.03 (c) of this Agreement. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph 1 above, if the Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Cate- gory, the Association may, by notice to the Borrower: (i) real- locate to such Category, to tlic extent required to meet the esti- mated shortfall, proceeds of the Credit which are then allocated to another Category and which in the opinion of the Association are not needed to meet other expenditures; and (ii) if such real- location cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. 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 expendi- tures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, can- cel such amount of the Credit as, in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 26 - SCHEDULE 2 Description of the Project The Project comprises a five-year phase (1976-1981) of an in- tegrated rural development program in the Borrower's Maritime Re- gion. It will improve and diversify production on about 18,500 ha of upland crops (maize, cassava, groundnuts, cowpeas, and cot- ton); develop about 3000 ha of lowland rainfed rice and 25 ha of vegetables; rehabilitate irrigation facilities for about 20 ha of existing vegetable production; renovate about 600 ha of small- holder coconut plantings; and provide the necessary support ser- vices and infrastructure for about 20,000 farm families. The Project consists of the following Parts: Part A: Farm Inputs; Equipment 1. ProCurement and distribution by SORAD Maritime of sea- sonal inputs such as fertilizers and pesticides. 2. Procurement by SORAD Maritime for Farmer Groups of coco- nut seedlings and equipment such as winnowers and threshers, maize mills, about 75 village rice mills, about 110 power tillers for rice land preparation, and materials for the construction of stor- age facilities for Farmer Groups. 3. Replacement by SORAD Maritime of irrigation equipment at Agoueve. -27 - Part B: Support Services 1. Strengthening the organization and facilities of SORAD Maritime through: (a) reinforcement of management staff and em- ployment and training of additional agricultural extension workers; (b) expansion of seed maltiplication services; (c) construction and equipment of administrative and training facilities; and (d) pro- curement of vehicles and office equipment and furnishings. 2. Construction and equipment of a building at Tsevie for the CNCA Branch; procurement of vehicles and office equipment and furnishings therefor. 3. The provision of agricultural credits by the CNCA Branch as described in Schedule 4 to this Agreement, to finance farmers' acquisition of inputs, materials and equipment under Part A.1 and A.2 above. Part C: Infrastructure Construction and improvement of about 300 km of feeder and secondary roads, village water-supply facilities, including about 20 tubevells equipped with pumps and 2 small retention dams and about 20 village markets and construction and equipment of about 15 dispensaries. Part D: Studies and Field Trials 1. An engineering study for the gravity irrigation of about 1,000 ha of the lower Zio Valley for rice production. - 28 - 2. Field trials on techniques: (a) to restore the produc- tivity of depleted soils in the coastal plateau of the Borrower's Maritime Region; and (b) to test the resistance of coconut hybrids to Kaincope disease. 3. Formulation of investment proposals for areas in the Borrover's territory to be cleared of onchocerciasis. The Project is expected to be completed by June 30, 1981. -29 - SCHEDULE 3 Procurement A. International Competitive Bidding 1. Except as provided in Part B hereof, contracts for the pur- chase of goods estimated to cost the equivalent of $50,000 or more shall be procured in accordance with procedures consistent with those set forth in Part A of the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in August 1975 (hereinafter called the Guidelines), on the basis of international competitive bidding. 2. Contracts for goods shall be bulked to the maximum extent practicable. B. Other Procurement Procedures 1. Competitive Bidding. Contracts listed hereunder shall be procured on the basis of competitive bidding advertised locally and in accordance with local procedures acceptable to the Asso- ciation: (a) except as provided in paragraphs 2 and 3 of Part B hereof, contracts for the purchase of goods estimated to cost less than the equivalent of $50,000, provided that the total cost of such goods so procured shall not exceed the equivalent of $200,000; and - 30 - (b) civil works for the construction of Project facilities, secondary roads, village markets and dispensaries. 2. Contracts for the purchase of goods estimated to cost less than the equivalent of $10,000 may be awarded after solicitation of quotations from at least three manufacturers or suppliers, provided that the total cost of goods so procured shall not exceed the equivalent of $100,000 in the aggregate and provided that all terms and conditions thereof are satisfactory to the Association. 3. Rock phosphate estimated to cost the equivalent of about $100,000 may be procured from the Borrower's mines through negotiated purchases acceptable to the Association. C. Evaluation and Comparison of Bids for Goods; Preference for Domestic Manufacturers 1. For the purpose of evaluation and comparison of bids for the supply of goods, except those to be procured in accordance with local procedures: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for imported goods, or the ex-factory price for domestically-manufactured goods; (ii) customs duties and other import taxes on imported goods, and sales and sim- ilar taxes on domestically-supplied goods, shall be excluded; and (iii) the cost to the Borrower of inland freight and other expen- ditures incidental to the delivery of goods to the place of their use or installation shall be included. 2. Goods manufactured in Togo may be granted a margin of preference in accordance with, and subject to, the following provisions: -31- (a) All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the infor- mation required to establish the eligibility of a bid for such preference and the following methods and stages that will be fol- lowed in the evaluation and comparison of bids. (b) After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in Togo if the bidder shall have established to the satis- faction of the Borrower and the Association that the manufacturing cost of such goods includes a value added in Togo equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in Togo. (3) Group C: bids offering any other goods. (c) All evaluated bids in each group shall be first compared among themselves, excluding any customs duties and other import taxes on goods to be imported and any sales or similar taxes on goods to be supplied domestically, to determine the lowest evalu- ated bid of each group. Such lowest evaluated bids shall then be compared with each other, and if, as a result of this comparison, a bid from group A or group B is the lowest, it shall be selected for the award. - 32 - (d) If, as a result of the comparison under paragraph (c) above, the lowest bid is a bid from group C, all group C bids shall be further compared with the lowest evaluated bid from group A after adding to the c.i.f. bid price of the imported goods offered in each group C bid, for the purpose of this fur- ther comparison only, an amount equal to (i) the amount of cus- toms duties and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in such group C bid; or (ii) 15% of the c.i.f. bid price of such goods if said customs duties and taxes exceed 15% of such price. If the group A bid in such further comparison is the lowest, it shall be selected for the award; if not, the bid from group C which as a result of the comparison under paragraph (c) is the lowest evaluated bid shall be selected. D. Procurement Without Contracting 1. The construction and maintenance of feeder roads and reten- tion dams shall be carried out by SORAD Maritime on force account. 2. The construction of tubewells shall be carried out by the well brigade (Arrondissement Hydraulique et Electricite) of the Borrower's Ministry of Public Works on force account. E. Review of Procurement Decisions by the Association 1. Review of invitations to bid and of proposed awards and final contracts: Adak -33- With respect to all contracts estimated to cost the equivalent of $50,000 or more: (a) Before bids are invited, the Borrower shall furnish to the Association, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Association shall reasonably re- quest. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, the Bor- rower shall, before a final decision on the award is made, inform the Association of the name of the bidder to which it intends to award the contract and shall furnish to the Association, in suf- ficient time for its review, a detailed report on the evaluation and comparison of the bids received, together with the recommenda- tions for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. (c) The terms and conditions of the contract shall not, with- out the Association's concurrence, materially differ from those on which bids were asked. - 34- (d) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the submission to the Association of the first application for with- drawal of funds from the Credit Account in respect of such contract. 3. With respect to each contract to be financed out of the pro- ceeds of the Credit and not governed by the preceding paragraph, the Borrower shall furnish to the Association, promptly after its execution and 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, recommendations for award and such other information as the Association shall rea- sonably request. The Association shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. -35 - SCHEDULE 4 Lending and Operating Policies and Procedures of CNCA in respect of Part B.3 of the Project The CNCA Branch shall follow the policies and procedures set forth in this Schedule in carrying out Part B.3 of the Project. A. Purpose The CNCA Branch shall make seasonal, medium, and long-term credits to eligible farmers for the purpose of assisting the financing of expenditures required for the carrying out of Parts A.1 and A.2 of the Project. B. Eligibility In order to be eligible to receive a credit, a farmer shall (1) be a member of a Farmer Group; and (2) meet all such criteria as shall be reasonably established from time to time by CNCA and by SORAD Maritime, respectively. C. Terms and Conditions 1. All credits shall bear: (a) an interest at the rate of eight per cent (8%) per annum on the principal amount of the credit withdrawn and outstanding from time to time; and (b) on the total amount of the credit (i) a commission of one per cent (1%) to cover - 36 - the statutory guarantee requirements of CNCA, (ii) a commission of one per cent (1%) for a guarantee fund to be established in respect of Project credit activities, and (iii) a commission of one per cent (1%) for a guarantee fund to be established to cover guarantee requirements for Farmer Groups as set forth in paragraph 5 hereunder. 2. Seasonal credits for the purchase of fertilizers, pesticides and seeds shall normally be repaid in a period of ten months. 3. Medium-term credits for the purchase of equipment shared by individual farmers such as rice mills, power tillers and of storage facilities for Farmer Groups shall be repaid in equal installments over a period of four years. 4. Long-term credits for inputs and equipment to smallholders of coconut plantings shall be repaid over a period of twelve years including a grace period of seven years during which period the interest on such credits shall be capitalized. Unless the Asso- ciation shall otherwise agree, the amount of such credits to an individual farmer shall not exceed about CFAF9,800 for each 1/10 ha up to a maximum of CFAF49,000 for 0.50 ha. 5. Farmer Groups shall collectively guarantee the repayment of credits granted to their individual members. Normally, the granting of subsequent credits shall be subject to the full repayment of any prior seasonal credit. 1-37- D. Procedures 1. Individual applications for seasonal credit will be combined at the Farmer Group level; applications for group-owned equipment will originate at the Farmer Group level. The credit assistants referred to in Section 3.11 (b) (ii) of this Agreement shall review each credit application, including the individual applicants' farming plans and budgets, financing requirements, repayment ability, debts and family living needs, and the technical recom- mendations of SORAD Maritime and the Input Supply Unit. The combined group applications, with comments and recommendations on the basis of such review, would be submitted to CNCA's loan committee to be approved within two weeks. 2. Upon approval of the joint credit application, a written agreement shall be signed by all the members of the Farmer Group as joint obligors and CNCA Branch setting forth terms and condi- tions of the credit, including repayment schedules (principal and interest) in case of medium and long-term credits. 3. Whenever any farm inputs and equipment, to be financed out of the proceeds of any credit and delivered in kind to the farmers through a Farmer Group, are procured or paid for by CNCA Branch, or through SORAD Maritime and its Input Supply Unit, CNCA Branch shall promptly inform the farmers through their Farmer Group of the amounts charged to their respective credit accounts on account of such farm inputs and equipment so procured or paid, such infor- mation to be supported with copies of the receipt signed by the leader of the Farmer Group for such farm inputs and equipment in the amounts so charged. I -38 - 4. CNCA Branch shall furnish to the Farmer Group, annual state- ments for medium and long-term credits showing the amounts drawn on each farmer's account, including interest, payments made and the outstanding balance of the respective credit. For seasonal credits, such statements shall be furnished one month before harvest time. E. Supervision 1. SORAD Maritime's extension workers shall regularly visit credit beneficiaries to ensure that farmers andFarmer Groups are effec- tively carrying out farm and crop development and complying with the technical provisions of their respective credit agreements with CNCA Branch. 2. CNCA Branch's credit assistants shall be responsible for collec- tion of repayments from the individual farmers through the Farmer Groups.