Liberia - Bong County Agricultural Development Project : Credit 0700 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 700 LBR DEVELOPMENT CREDIT AGREEMENT (Bong County Agricultural Development Project) between REPUBLIC OF LIBERIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated December 29, 1977 CREDIT NUMBER 700 LBR DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated December 29, 1977, between REPUBLIC OF LIBERIA (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) the Borrower has requested the Association to assist in the financing of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) the Borrower intends to contract from the Agency for In- ternational Development of the United States (hereinafter called USAID) a loan (hereinafter called the USAID Loan) in an amount of six million six hundred thousand dollars ($6,600,000) to assist in financing part of the Project on the terms and conditions set forth in an agreement (hereinafter called the USAID Loan Agreement) to be entered into between the Borrower and USAID; and WHEREAS the Association has agreed, on the basis inter alia of the foregoing, to extend the Credit to the Borrower upon the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated 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) "BPMU" means the Bong Project Management Unit referred to in Section 3.01 (b) of this Agreement; (b) "Prior Credit Agreement" means the Development Credit Agreement (Lofa County Agricultural Development Project) dated August 1, 1975 between the Borrower and the Association; "Prior Credit" means the credit provided thereunder; and "Prior Project" means the Lofa County Agricultural Development Project; (c) "PSC" means the Project Steering Committee established under the Prior Credit Agreement and expanded to include BPMU's Project Manager as one of its secretaries; -3- (d) "LBDI" means the Liberian Bank for Development and Invest- ment estiblished in 1965 under the laws of the Borrower; (e) "AGRIMECO" means the Agricultural Mechanization and Land Development Corporation established in 1972 under the laws of the Borrower; (f) "Project Area" means the Gbarnga, Kokoya and Sanoyie districts in the Bong County with a total area of about 650,000 hectares, and may include such other areas as shall be agreed by the Borrower and the Association; (g) "Feeder Road Unit" means the unit referred to in Section 3.08 of this Agreement; (h) "Schistosomiasis Unit" means the unit referred to in Section 3.09 of this Agreement; (i) "Monitoring Unit" means the unit referred to in Section 3.10 of this Agreement; (j) "Revolving Credit Fund Agreement" means the agreement to be entered into between the Borrower and LBDI as provided in Sec- tion 4.05 (a) of this Agreement; and "Revolving Credit Fund" means the credit fund established pursuant to the Revolving Credit Fund Agreement; and (k) "Advance" means the amount of funds provided by the Association to the Borrower for the preparation of the Project under an agreement constituted by an exchange of letters between the Borrower and the Association dated March 28, 1977 and April 14, 1977. 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 seven million dollars ($7,000,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Association, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit. (b) On the Effective Date of this Agreement the Association shall, on behalf of the Borrower, withdraw from the Credit Account and pay to itself out of the proceeds of the Credit, an amount equivalent to: (i) the principal amount of funds withdrawn by the Borrower out of the Advance and outstanding on such date, and (ii) service charge accrued thereon up to such date. 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. - 6 - Section 2.04. The Closing Date shall be December 31, 1983 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%) Ter annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Service charges shall be Tayable semi-annually on June 15 and December 15 in each year. Section 2.07. The Borrower s1-11 repay the principal amount of tthe Credit in semi-annual installnents payable on each June 1.5 qnd December 15 commencing June 115, 1Q87. and endinp December 15. 2026, each installment to and includinfy the installment nayable on December 1-, 1906 to be one-half of one ner cent (1/2 of 10) oP such nrinrin)al amount, and each installment thereafter to be one and one-half per cent (1-112%) o-P such Prinrinal amount. Section 2.08. The currency of the United States of America is hrpby snecified for the purnoseq of Section 4.02 of the General Conditions. '7 - I - ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out the Project with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and agricultural practices, and shall provide, promptly as needed, the funds, facilities, ser- vices and other resources required for the purpose.. (b) For the purpose of carrying out the Project, the Borrower shall establish and maintain, under terms of reference satisfactory to the Association, the Bong Project Management Unit (BPMU), which shall have its own management, budget and financial control. Except as the Borrower and the Association shall otherwise agree, BPMU shall have five operational divisions: administration and personnel, agricultural services, cooperative and credit services, training, and finance. (c) The Borrower shall employ personnel, whose qualifications, experience and terms and conditions of employment shall be satis- factory to the Association, to fill the following executive posi- tions of BPMU: a Project Manager, who shall be the chief adminis- trative officer and responsible through PSC to the Minister of Agriculture or his designee (whose rank shall not be lower than an Assistant Minister); the managers of the divisions of admin- istration and personnel, agricultural services, cooperative and credit services, training and finance; a swamp development officer, a land use planning officer, and a tree crop specialist. The Bor- rower shall also employ deputies with adequate qualifications to such positions. - 8 - Section 3.02. The Borrower shall cons PVC to nerform, in re- srpect of tb- Project. inter alin the same activit-rs thqt it hes been rerforminr under the Prior Prolect. Section 3.01. The Borrower shall, not later than June 30, 1978, establish and thereafter maintain a Project Consultative Com- mittee at Suakoko to ensure cooperation in the carrying out of the Project of the relevant denartmnnts and agencies of the Borrower in the Project A-ea and the rarticination of local farmers in the Proj- ect. Such Committee shall be chaired by the Suoerintendent of Bong County and shall include the Assistant Superintendent of such County; the chiefs of the 6 chiefdoms in such county; th- heads of the local renresentations of the Ministries of Education, Health, Public Works, and Land and Mines; the chairmen of the cooperatives included in the Project, when they are orranized; and BPMU's Project Manager and Deputy Manager. Section 3.04. Tn order to assist the Borrower in the carrying out of Parts D.3 and E of the Project, the Borrower shall employ consultants whose qualifications, exnerience and terms and condi- tions of employment shall be satisfactory to the Association. Section 3.05. The Borrower shall cause Part D.2 of the Project to be completed not later than March 31, 1978 or such other later date as the Association shall agree. Section 3.06. The Borrower shall: (i) not later than September 30, 1978, submit for review by, and consultation with, the Association proposals, including detailed cost estimates, for the reorganization of agricultural research in Liberia; and (ii) promotly after the Association's approval, put such reorganization into effect. Section 3.07. Except as the Borrower and the Association shall otherwise agree, the Borrower shall, not later than June 30, 1978, grant to BPMU, except for the areas in Kpartawee cleared by AGRIMECO, exclusive responsibility for rice, coffee and cocoa extension services in the Project Area. Section 3.08. (a) For the exclusive purpose of the carrying out of the construction and improvement of feeder roads included under Part C.1 of the Project, the Borrower shall cause a special unit (the Feeder Road Unit) to be established, not later than March 31, 1978, in its Ministry of Public Works. Such Unit shall have, inter alia, its own personnel, management, eouipment and separate accounts in respect of the Project, and shall prepare its operating plan in consultation with BPMU. (b) The Borrower shall maintain through its Ministry of Public Works the feeder roads referred to in paragraph (a) of this Section and keep separate accounts for such maintenance. Section 3.09. (a) The Borrower shall, not later than March 31, 1978, amend the terms of reference of the existing Schistosomiasis Unit established under the Prior Project for the purpose of causing such Unit to carry out Part D.4 of the Project. (b) The Borrower shall: (i) review with the Association, not later than June 30, 1979, the findings of the Schistosomiasis Unit in the carrying out of Part D.h of the Project; and (ii) act promntly to take or cause to be taken any required preventative and curative measures in the event of a marked increase in the incidence of schstosomiasis in the Project Area. - 10 - Section 3.10. The Borrower shall, not later than March 31, 1978, amend the terms of reference of the existinp Monitoring Unit established under the Prior Project for the purTose of causing such Unit to carry out Part D.5 of the Project. Section 3.11. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the nroceeds of the Credit against hazards inci- dent to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any 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 goods and services financed out of the proceeds of the Credit shall be used exclusively for the Project. Section 3.12. (a) The Borrower shall furnish or cause to be furnished to the Association, promptly upon their Drenaration, the nlans, specifications, reports. contract documents and con- struction, Drocurement and work 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 to be maintaine records adequate to record the proFress of the Project (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 - 11 - in the Project; (ii) shall enable the Association's accredited rep- resentatives 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 he furnish-d to the Association all such informa- tion as the Association shall reasonably request concerning the Proj- ect, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. Section 3.13. 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 of the facilities included in the Project and shall furnish to the Association, promptly after such acquisition, evidence satisfactory to the Association that such land and rights in respect of land are available for purposes related to the Proj- ect. - 12 - ARTICLE IV Budgetary Control; Funding Procedures; Accounts and Audits Section 4.01. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consis- tently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Project, of the de- partments or agencies of the Borrower responsible for carrying out the Project or any part thereof. Section 4.02. (a) The Borrower shall cause: (i) BPMU to prepar its own annual budget and, in consultation with the Feeder Road, Schistosomiasis and Monitoring Units, as the case may be, to preparr the annual budgets of such units; and (ii) LBDI to prepare the annual budget of the LBDI branch at Gbarnga, all for PSC's approval, Such budgets shall, be included, as the case may be, as a separate item in the annual budgets of the Ministries of Agriculture, Public Works, and Public Health and LBDI. (b) The Borrower shall cause BPMU to prenare quarterly cash flow forecasts indicating costs, revenues and working capital requirements, within the apnroved annual Project budgets, and to submit such forecasts to PSC for approval, not later than one month prior to each quarter. (c) The Borrower shall cause BPMU to maintain income and ex- penditure records in accordance with consistently maintained appro- priate accounting practices to reflect its operations and financial position in relation to the Project, and to provide evaluation data. - 13 - (d) The Borrower shall cause BPMU and the Feeder Road, Schistosomiasis and Monitoring Units to: (i) have their accounts 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 four months after the end of each such year, (A) certified copies of their accounts 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 shall have reasonably requested; and (iii) furnish to the Association such other information concerning their accounts and the audit thereof as the Association shall from time to time reasonably request. Section 4.03. (a) The Borrower shall maintain a separate bank account for the Project at LBDI or at an established commercial bank. (b) The Borrower shall replenish such bank account quarterly in advance through its Ministry of Finance, in accordance with the quarterly cash flow forecasts referred to in paragraph (b) of Sec- tion 4.02 of this Agreement, to meet the anticipated payments for local expenditures. (c) The Borrower shall: (i) authorize BPMU to operate such bank account within its budgetary allocation, provided that the Project budgets and the quarterly cash flow forecasts have been approved by PSC; and (ii) provide, inter alia, for overdraft of funds from such bank account by BPMU, guaranteed by the Borrower, to cover any shortfall of funds required for local expenditures. - 14- Section 4.04. (a) The Borrower agrees that the Manager of the coonerative and credit services division of RPMU shall be the Assistant Registrar of Cooperatives of the Ministry of Agriculture for Bong County. (b) The Borrower shall, through the Assistant Registrar of Cooperatives, cause all farmer cooperatives included in the Project to maintain records adequately reflecting their operations and in- dividual farmer credit transactions related to the Project. Such records shall be audited annually by the Registrar of Cooperatives of the Ministry of Agriculture and may be reviewed at any time by the Association. Section 4.05. (a) For the purpose of Part A of the Project, the Borrower shall establish a Revolving Credit Fund which shall be administered by LBDI on behalf of the Borrower in accordance with a Revolving Credit Fund Agreement satisfactory to the Associa- tion to be entered into between the Borrower and LBDI not later than March 31, 1978. (b) The Revolving Credit Fund Agreement, or any provision thereof, shall not be assigned. amended, abrogated or waived with- out the prior approval of the Association. (c) The surplus funds of the Revolving Credit Fund shall be invested in short-term deposits (not more than one year) in accor- dance with prudent financial practices to ensure adequate liqui- dity of the Revolving Credit Fund. - 15 - (d) The Borrower shall cause the funds of the Revolving Credit Fund to continue to be used, after the completion of Part A of the Project, for development loans and seasonal credits to smallholders in the Borrower s territory to aid them in developing and increas- ing agricultural production. (e) The Revolving Credit Fund shall not be dissolved before the end of the scheduled repayment period of the last development loan granted under the Project. (f) The individual development loans and seasonal credits to be financed out of the Revolving Credit Fund shall be provided to the farmers in the Project Area under the terms and conditions stipulated in the Revolving Credit Fund Agreement, which terms and conditions shall include, inter alia, those set forth in Schedule 4 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Association. (g) The Borrower shall, through the Revolving Credit Fund Agreement, cause LBDI to: (i) maintain separate accounts and records for the Revolving Credit Fund; (ii) have such accounts and records for each fiscal year audited, in accordance with sound auditing principles consistently applied, by independent auditors acceptable to the Association; (iii) furnish to the Association as soon as available, but in any case not later than four months after the end of each such year, (A) certified copies of such accounts and records for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iv) furnish to - 16 - the Association such other informntinn crc,-rning surh account,. and rerords and the audit thereof as the Association shall from time to tire reasonnbly renuest. - 17 - ARTICLE V Other Covenants Section 5.01. Except as the Borrower and the Association shall otherwise agree, the Borrower shall not permit AGRIMECO to engage in any new large-scale mechanized land clearing activities for tree crop development in the Project Area after June 30. 1978 until the proceeds of the Credit have been fully emnloyed for purposes of the Project. Section 5.02. The Borrower shall cause the pricing of innuts and the terms of credits provided by the Borrower or its agencies after June 30, 1978 to farmers in the Kpartaree area to be the same as those applied under the Project. - 18 - ARTICLE VT 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: (i) Subject to subparagraph (ii) hereof: (A) The right of the Borrower to withdraw the proceeds of the USAID Loan shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the USAID Loan Agreement, or (B) The USAID Loan shall have become due and - payable prior to the agreed maturity thereof. (ii) Subparagraph (i) hereof shall not apply if the Borrower establishes to the satisfaction of the Association that: (A) such suspension, cancella- tion, termination or prematuring is not caused by the failure of the Borrower to perform any of its obligations under such agreement, and (B) adequate funds for the Project are available to the Borrower from other sources on terms and con- ditions consistent with the obligations of the Borrower under this Agreement. - 19 - Section 6.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified pursuant to paragraph (d) thereof, namely, that the event specified in sub- paragraph (i) B of Section 6.01 of this Agreement shall occur. - 20 - ARTICLE VII Effective Date; Termination Section 7.01. The following -vents 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) that the USAID Loan Agreement has been executed and del.vered on behalf of the parties thereto; and (b) the Manager of the Arirullral ervice- Division -1 BPMU has been annointed. Section 7.00. The da.te March ?Q. 107, ir h-reby src4fied f")r the purposes of Sectiqr 12.01 of +h- eneral Cnnditinns. Section 7.02. The nblii'ations of thI Porrower u + TV and V of th4q Arrepent czhall -c- nd deterrine on the date on which the D-velo-rg-nt r-anqjt Aromrnt shall terrinnP o on a date twenty -rars ater th'e dat- of this Areement, whichever shall be the earlier. - ?I - ARTICLE VIII Representative of the Borrower; Addresses Section 8.01. The Minister of Finance of the Borrower 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 Finance Monrovia Liberia Cable address: MINFIN Monrovia 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 6145 (wUI) - 22 - IN WITNESS WHEREOF, the parties hereto, actinr 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 LIBERIA By /s/ Francis Dennis Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCTATION By /s/ Wilfried P. Thalwitz Acting Regional Vice President Western Africa - 23 - 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 amount 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 CateEory Dollar Equivalent) to be Financed (1) Vehicles, equipment 800,000 and furniture (a) Directly im- 100% of foreign ported expenditures (b) Locally pro- 90% cured (2) Civil works 400,000 80% (3) (a) Recruitment 1,650,000 100% of foreign and employment expenditures of non-Liberian staff (b) Consulting ser- 500,000 vices for Part E of the Project and training abroad -24- Amount of the Credit Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (4) Administrative and 1,100,000 70% operating costs, materials for vil- lage wells and con- struction of LBDI branch (5) Salaries of local 6oo,0o0 20% staff (6) Research and 450,000 100% of foreign laboratory facili- expenditures and ties under Part D.3 50% of local ex- of the Project penditures (7) Unallocated 1,500,000 TOTAL 7,000,000 - 25 - 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; 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 expen- ditures"; and (b) the term "local expenditures" means expenditures in the currency of the Borrower and for goods or services from the terri- tory of the Borrower. 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. - 26 - 4. Notwithstanding the provisions of paragraph 1 above and subject to the provisions of Section 2.02 (b) of this Agreement, no withdrawals shall be made in respect of: (a) payments made for expenditures prior to the date of this Agreement; and (b) expenditures for Part D.3 of the Project, except for expenditures on account of rice research undertaken by the Central Agricultural Experiment Station, until the Association has approved the proposals for the reorganization of agricultural research re- ferred to in Section 3.06 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) reallo- cate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to an- other Category and which in the opinion of the Association are not needed to meet other expenditures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that fur- ther withdrawals under such Category may continue until all expen- ditures thereunder shall have been made. - 27 - 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. - 28 - SCHEDULE 2 Description of the Project The Project aims at increasing and sustaining farm incomes in the Project Area by providing farm inputs and strengthening and developing farm support services. It consists of the following Parts: A. Farm and Crop Development A program of development loans and seasonal credits, through the Revolving Credit Fund, to aid in financing the development and increased production of about 6,000 hectares of upland rice, about 2,000 hectares of swamp rice, about 3,000 hectares of cocoa and about 1,500 hectares of coffee in the Project Area. Items to be fi- nanced will be farm inputs, including fertilizers, insecticides, seeds and seedlings, and farm equipment (power tillers, chain saws, hand winches, threshers, etc.). B. Staffing and Training Provision of qualified technical and administrative personnel and support facilities and of training of-personnel recruited for extension services and Project management. - 29 - C. DeveloDment of Physical Infrastructure 1. Construction of about 40 miles (65 km) of new, and recondi- tioning/upgrading of about 130 miles (210 km) of existing or planned, feeder roads in the Project Area and subsequent maintenance of such roads. 2. Construction of: (i) BPMU's central office and about 8 houses for BPMU's senior staff on the premises of the Central Agricultural Exeriment Station; (ii) 6 zonal offices for BPMU; (iii) schistoso- miasis and crop research laboratories; and (iv) about 300 village wells for improved water supply. 3. Expansion of the training center at the Central Agricultural Experiment Station, Suakoko, Bong County. D. Support Services 1. Establishment of farmer cooperatives to facilitate farm inputs, credit supply and marketing. 2. Establishment by LBDI of a banking facility at Gbarnga to provide customary banking services in the Project Area. 3. Imnrovement of research facilities at the Central Agricultural Exneriment Station, Suakoko, Bong County and agricultural research by such station. - 30 - 4. Surveillance of schistosomiasis in the Project Area and testing of vector control techniques. 5. Evaluation and monitoring of the Project and assistance in Project preparation. E. Technical Assistance 1. Preparation of an integrated agricultural development Droj- ect in Grand Gedah County. 2. Studies on the reorganization of the Ministry of Agriculture and on agricultural research in Liberia. 3. A survey to identify the potentials of a citrus fruit can- ning industry in Liberia. The Project is expected to be completed by June 30, 1983. - 31 - SCHEDULE 3 Procurement A. International Competitive Bidding 1. Except as provided in Part B hereof, contracts for the pur- chase of goods 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. Orders for vehicles, equipment and other items shall be grouped, insofar as is practicable, to encourage competitive bidding. B. Other Procurement Procedures 1. Contracts for vehicles, equipment for offices, laboratories and workshops and other items: (i) costing less than the equivalent of $50,000 but more than the equivalent of $5,000, shall be pro- cured through local competitive bidding procedures satisfactory to the Association; and (ii) costing the equivalent of $5,000 or less, shall be procured through the Borrower's customary procedures satisfactory to the Association; provided, however, that the aggre- gate cost of all such contracts does not exceed the equivalent of $300,000. - 32 - 2. Contracts for civil works and construction materials shall be procured through local ccmpetitive bidding procedures satis- factory to the Assocation. 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 Liberia may be granted a margin of preference in accordance with, and subject to, the following provisions: (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: - 33 - (1) Group A: bids offering goods manufactured in Libera if the bidder shall have established to the satisfaction of the Borrower and the Association that the manufacturing cost of such goods includes a value added in Liberia equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manu- factured in Liberia. (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. (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 - 31, - 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. Review of Procurement Decisions by the Association 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for vehicles, equipment and other items 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 tc 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, inforr 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 - 35),C - and comparison of the bids received, 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 or prequalification invited. (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 sha'i 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. - 36 - SCHEDULE 4 Terms and Conditions of Development Loans and Seasonal Credits The development loans and the seasonal credits referred to in Section 4.05 (f) of this Agreement shall be provided in ac- cordance with the terms and conditions outlined below: 1. Develooment Loans (a) The development loans shall bear interest at a rate of 10 per cent per annum on the outstanding balance, and shall be repaid as follows: (i) Loans for the development of farms for coffee and/or cocoa shall be repaid in twelve years, including a grace period of four years during which the interest on such loans shall be capitalized; and fii) Loans for new swamp rice development shall be repaid in eight years including a grace period of two years during which period the interest on such loans shall be capitalized. (b) The development loans shall be used for financing: (i) in the case of single and double crop swamp rice development, the cost of hired labor and/or rental of land clearing equipment, con- struction of water control and storage structures, tools and farm - 37 - equipment; and (ii) in the case of coffee and cocoa development, the cost of fertilizers, seedlings, plants, suckers, hand tools, land development services, sprayers and processing equipment. 2. Seasonal Credits (a) The seasonal credits shall bear a service charge at a flat rate of 10 per cent and shall be repayable after each harvest for which the credits have been provided. (b) Such credits shall be used for financing: (i) in the case of upland and swamp rice development, the cost of rice seeds, fer- tilizers, spraying services and power tiller service (double crop swamp rice only); and (ii) in the case of coffee and cocoa devel- opment, the cost of fertilizers, chemicals, sprayers and replace- ment tools. 3. Institutions Until viable farmer cooperatives are in existence in the Proj- ect Area, the development loans and seasonal credits shall be chan- nelled for relending through BPMU. Funds to be provided to BPMU or the cooperatives, as the case may be, for such relending shall bear interest at a rate of 7 per cent per annum. A 2 per cent management commission on disbursed funds shall be paid from the Revolving Credit Fund to LBDI. The cooperaties or BPMU, as the case may be, shall retain the balance between the interest on the funds received and the interest or service charge on the development loans or sea- sonal credits, to cover its administrative costs and bad debts. All - 38 - repayments of principal of, or payments of interest or service charge on, the development loans or seasonal credits shall be deposited in the Revolving Credit Fund. 4. Procedures (a) The individual development loans and seasonal credits shall be approved by BPMU after screening of applicants by a credit advisory committee composed of village or clan chiefs, representatives of farmers, the local agriculture extension assis- tant, the local cooperative/credit extension assistant, and a credit officer from the farmer cooperative concerned, when applicable. (b) Farmers who have been granted such loans or credits shall agree to: (i) accept input packages specified by BPMU and use such input packages only for the purpose for which they are provided; (ii) carefully follow the practices recommended by BPU; and (iii) market their coffee and cocoa through the farmer cooperatives. (c) No such loan and/or credit shall exceed a total of $1,000 per farm family, or such other maximum amount as may from time to time be determined by agreement between the Borrower and the Association.