Haiti - Agricultural Rehabilitation Project : Credit 1106 - Credit Agreement - Conformed

;LiT CREDIT NUMBER 1106 HA Development Credit Agreement (Agricultural Rehabilitation Project) between REPUBLIC OF HAITI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1981 CREDIT NUMBER 1106 HA DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated (al, X-3 , 1981, between the REPUBLIC OF HAITI (hereinafter called the Borrower) and the INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated June 30, 1980, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agreements of the Association being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Ministry" means the Ministry of the Borrower respon- sible for Agriculture; (b) "Bureau" means the Agricultural Credits Bureau of the Ministry; and (c) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement. 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 two million six hundred thousand Special Drawing Rights (SDR 2,600,000). -2- Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of this Section and of Schedule 1 to this Agreement, as such Schedule may be amended from time to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) The Borrower shall, for the purposes of the Project, cause the Ministry to open a Special Account in the National Bank of Haiti denominated in dollars on terms and conditions satis- factory to the Association. Payments out of the Special Account shall be made exclusively to pay the reasonable costs of goods and ser%rices required to carry out the Project and to be financed under this Agreement in accordance with the provisions of the table set forth in paragraph 1 of Schedule 1 hereto. (c) The Association shall, promptly, after the Effective Date, withdraw on behalf of the Borrower from the Credit Account under Category 7 of the table set forth in Schedule 1 hereto and deposit in the Special Account an initial amount in dollars equivalent to SDR 390,000. Thereafter, at the request of the Borrower, the Association shall further so withdraw from the Credit Account and deposit in the Special Account such amounts as shall be required to replenish the Special Account with amounts equal to payments made out of the Special Account for expenditures for the Project eligible for financing under this Agreement, but only to the extent that the amount of any such deposit, together with any amount remaining on deposit in the Special Account as of the date of such request, shall not exceed in the aggregate the equivalent of SDR 390,000. Except as the Association shall other- wise determine, each such deposit after the initial deposit shall be withdrawn by the Association from the Credit Account under the same Categories set forth in the table in paragraph 1 of Schedule 1 to this Agreement, and in the same respective amounts, as have been justified by the evidence supporting the request for such deposit furnished pursuant to paragraph (d) of this Section. (d) Prior to or at the time of each request for a deposit by the Association into the Special Account, the Borrower shall furnish to the Association in respect of each payment made by the Borrower out of the Special Account such documents and other evidence as the Association shall reasonably request, showing that the payment was made on account of the reasonable cost of goods or -3- services required for the Project and to be financed out of the proceeds of the Credit in accordance with Schedule 1 to this Agreement. (e) If the Association shall have determined that any payment out of the Special Account (i) was made for any expendi- ture or in any amount not eligible for financing by withdrawal from the Credit Account, or (ii) was not justified by the evidence furnished pursuant to paragraph (d) of this Section, the Borrower shall, promptly upon notice from the Association-and, unless otherwise determined by the Association, prior to *any further deposit in the Special Account by the Association, deposit in the Special Account an amount equal to the amount of such payment or the portion thereof not so eligible or justified. (f) Notwithstanding the provision of paragraph (c) of this Section, no further deposit in the Special Account shall be made by the Association when the Association shall have determined that all further withdrawals from the Credit Account can be made directly by the Borrower from the Credit Account under paragraph (a) of this Section, or when the total amount withdrawn from the Credit Account plus the amount of any qualified agreement to reimburse made by the Association and of any special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions, shall have reached the equivalent of SDR 2,210,000, whichever shall be sooner. Withdrawal from the Credit Account of the remaining amount of the Credit for the Project shall follow such procedures as shall be agreed between the Borrower and the Association and shall be made only to the extent that the Association shall be satisfied by the evidence submitted in support of the applications for such withdrawal that all payments by the Borrower out of the Special Account were made on account of the reasonable cost of goods or services required for the Project and to be financed out of the proceeds of the Credit in accordance with Schedule 1 to this Agreement. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Credit, shall be governed by the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be September 30, 1982 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. -4- Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Service charges shall be payable semiannually on June 15 and December 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each June 15 and December 15 commencing June 15, 1991, and ending December 15, 2030, each installment to and including the istaillment payable on December 15, 2000, 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 Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. The Borrower shall carry out the Project through the Ministry with due diligence and efficiency and in conformity with appropriate economic, financial, administrative and agricultural practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. (a) In order to assist the Borrower in carrying out the Project, the Borrower shall continue to employ in the area of the Project until the completion of the Project: 11 District Directors, 11 District Coordinators, 22 Extension Supervisors and 110 Extension Agents. (b) To ensure the necessary coordination and supervision in carrying out the Project, the Borrower shall maintain a manage- ment team comprised of the Director General of the Ministry, as Chairman, the General Manager of the Bureau, the Director of the Coffee Production Section, the Director of the Agriculture Division of the Ministry and the Chief Accountant of the Ministry. -5- Section 3.03. (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 incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) Except as the Association shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the Project. Section 3.04. (a) The Borrower shall furnish to the Associa- tion, promptly upon their preparation, the plans, specifications, reports, contract documents and work and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) The Borrower: (i) shall maintain records and procedures adequate to record and monitor the progress of the Project (including its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Credit, and to disclose their use 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 to the Association at regular intervals all such information as the Association shall reasonably request concerning the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. (c) Upon the award by the Borrower of any contract for goods, works or services to be financed out of the proceeds of the Credit, the Association may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (d) Promptly after completion of the Project, but in any event not later than six months after the Closing Date or such later date as may be agreed for this purpose between the Borrower and the Association, the Borrower shall prepare and furnish to the Association a report, of such scope and in such detail as the -6- Association shall reasonably request, on the execution and initial operation of the Project, its cost and the benefits derived and to be derived from it, the performance by the Borrower and the Association of their respective obligations under the Development Credit Agreement and the accomplishment of the purposes of the Credit. Section 3.05. In order to advise farmers in the area of the Project on appropriate cultivation and fertilization techni- ques, the Borrower shall establish and carry out an extension program satisfactory to the Association. Section 3.06. The Borrower shall: (i) as from the date of this Agreement, charge a price to farmers for fertilizer made available through the Ministry; (ii) ensure that the subsidy element in such price not exceed 50 percent of the cost of ferti- lizer delivered to final distribution centers; and (iii) unless the Association shall otherwise agree, reduce such subsidy by the beginning of 1982, to not more than 35 percent of such cost. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained 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 responsible for carrying out the Project or any part thereof. (b) The Borrower shall ensure that: (i) all operations and accounts with respect to the Project be kept separate from the other operations and accounts of the Ministry; and (ii) that the Ministry retain, until two years after the Closing Date, all records (orders, invoices, bills, receipts and other documents) evidencing the expenditures for the Project on account of which withdrawals are requested from the Credit Account under this Agreement on the basis of certificates of expenditures and enable the Association's accredited representatives to examine such records. Section 4.02. The Borrower shall: (i) have the accounts for the Project, including the Special Account, audited for each fiscal year, in accordance with appropriate auditing principles -7- 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, the report of such audits by said auditors, of such scope and in such detail as the Association shall have reasonably requested, including, without limitation to the f ore- going, separate opinions by said auditors (A) on the Special Account and (B) in respect of the expenditures and records referred to 'n Section 4.01 (b) (ii) of this Agreement as to whether the proceeds of the Credit withdrawn from the Credit Account on the basis of certificates of expenditure were used to make payments for goods received, or works or services performed, and that such goods, works and services were eligible for financ- ing under this Agreement and were used in the carrying out of the Project; and (c) furnish to the Association such other information concerning such accounts and financial statements and the audits thereof as the Association shall from time to time reasonably request. Section 4.03. The Borrower shall continue to strengthen the operations of the Bureau, and for the purpose, shall use its best efforts to retain the technical assistance being provided to the Bureau. ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as addi- tional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the Special Account has been opened; and (b) the Association has received from the Ministry detailed budgets and schedules of implementation for the deployment of tool banks, the expansion of nurseries and the construction of service centers inc.luded in the Project. Section 5.02. The date I31? /, is hereby speci- fied for the purposes of Section 12.01 of the General Conditions. -8- Section 5.03. The obligations of the Borrower under Article IV of this Agreement 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. ARTICLE VI Representatives of the Borrower; Addresses Section 6.01. The Secretary of State responsible for Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Secretairerie d'Etat des Finances et des Affaires Economiques Palais des Finances Port-au-Prince Haiti Cable address: Telex: SECRETAIRERIE D'ETAT DES 2030347 FINANCES ET DES AFFAIRES FINANCE ECONOMIQUES Port-au-Prince Haiti 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) -9- IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF HAITI By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Byv Regional Vice President Latin America and the Caribbean - 10 - 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 SDR Equivalent) to be Financed (1) Fertilizers 1,100,000 100% (2) Hand tools and imple- 160,000 100% ments (3) Domestic transport 100,000 100% and storage inputs (4) Agricultural credits 240,000 100% of amounts disbursed by the Bureau (5) Construction of farm 160,000 100% service centers (6) Expansion of nurseries 200,000 100% (7) Initial deposit in Special Account 390,000 (8) Unallocated 250,000 TOTAL 2,600,000 2. The disbursement percentages have been calculated in com- pliance 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 - 11 - on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect 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. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expenditures prior to the date of this Agreement. 4. 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 Category, the Association may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated 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 expendi- tures; and (ii) if such reallocation 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. 5. 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 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 remedy 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 expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 12 - SCHEDULE 2 Description of the Project The Project is designed to rehabilitate coffee and food crop production in the hurricane-stricken South and Southeast of Haiti and to provide a basis for future development in the area. The Project includes: Part A: Expansion of the Bureau's program of agricultural credits to farmers for labor, fertilizers and other inputs, following the policies and procedures set forth in Schedule 4 below. Part B: Acquisition of agricultural tools and implements and their use in the tool banks of the Ministry. Part C: Expansion of the capacity of the Ministry's nurseries to produce coffee seedlings. Part D: Construction of 16 storage centers averaging about 120 m2 each for storage of inputs and to be developed into farm service centers to be operated by resident extension agents. The Project is expected to be completed by July 31, 1982. - 13 - SCHEDULE 3 Procurement A. International Competitive Bidding 1. Except as provided in Part B hereof, goods and civil works shall be procured under contracts awarded in accordance with procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in March 1977 (hereinafter called the Guidelines), on the basis of international competitive bidding as described in Part A of the Guidelines. 2. For goods and works to be procured on the basis of inter- national competitive bidding, in addition to the requirements of paragraph 1.2 of the Guidelines, the Borrower shall prepare and forward to the Association as soon as possible, and in any event not later than 60 days prior to the date of availability to the public of the first tender or prequalification documents relating thereto, as the case may be, a general procurement notice, in such form and detail and containing such information as the Association shall reasonably request; the Association will arrange for the publication of such notice in order to provide timely notification to prospective bidders of the opportunity to bid for the goods and works in question. The Borrower shall provide the necessary information to update such notice annually so long as any goods or works remain to be procured on the basis of international compe- titive bidding. 3. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of international competitive bidding: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for the imported goods, or the ex-factory price or off-the-shelf price of other goods, offered in such bid; and (ii) customs duties and other import taxes levied in connection with the importation, or the sales and similar taxes levied in connection with the sale or delivery, pursuant to the bid, of the goods shall not be taken into account in the evaluation of the bids. B. Other Procurement Procedures Tools and implements, materials for the expansion of nur- series and contracts for the construction of storage centers will be procured under the Borrower's applicable procedures. - 14 - C. keviewof Procurement Decisions by the Association 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for fertilizers: (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 request. 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 sufficient time for its review, a detailed report on the evalua- tion and comparison of the bids received, and such other informa- tion as the Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsis- tent 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, without 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 withdrawal of funds from the Credit Account in respect of such contract. 2. With respect to each contract not governed by the preceding paragraph 1, 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 respec- tive bids, recommendations for award and such other information as - 15 - the Association shall reasonably 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. 3. Before agreeing to any material modification or waiver of the terms and conditions of a contract, or granting an extension of the stipulated time for performance of such contract, or issuing any change order under such contract (except in cases of extreme urgency) which would increase the cost of the contract by more than 10% of the original price, the Borrower shall inform the Association of the proposed modification, waiver, extension or change order and the reasons therefor. The Association, if it determines that the proposal would be inconsistent with the provisions of this Agreement, shall promptly inform the Borrower and state the reasons for its determination. - 16 - Schedule 4 Lending and Operating Policies and Procedures of the Bureau A. Purposes of the Credits The Bureau's regional offices in the area of the Project (Thiotte, Jacmel, Fond des Negres, Jeremie, Port-au-Prince) will make short-term credits to eligible farmers and to Agricul- tural Credit Societies for expenditures for inputs such as fertil- izers, seeds, pesticides and hired labor, which are related to coffee and food crops affected by the hurricane. B. Eligibility In order to be eligible to receive a credit, a farmer must have a credit record satisfactory to the Bureau. Priority, however, will be given to Agricultural Credit Societies operating in the hurricane-affected area. C. Terms and Conditions 1. The Bureau will be responsible for extending cash credits, administering credits in kind for fertilizer and other inputs supplied by the ministry, and for recovery of all credits. 2. The credits extended will be short-term, to be repaid within one year. 3. All credits will bear interest at the rate of 9% per annum and will carry a 1% service charge or higher if the Bureau makes the decision to increase it. 4. The funds repaid will be retained by the Bureau for use in its further agricultural credit operations. D. Procedures 1. Individual applications for credits on behalf of members of Agricultural Credit Societies will be consolidated by the Societies. The credit agents of the Bureau will review all applications, including the individual - 17 - farmers's farm plans and budgets, financing require- ments, repayment abilities, debts and family needs, and the technical recommendations of the Agricultural Extension Service. The applications, with comments and recommendations on the basis of such reviews, will be submitted to the regional office of the Bureau for approval within two weeks of such submission. 2. Credits will be disbursed, to the extent possible, in kind, that is, in the form of fertilizers, pesticides and seeds. E. Supervision 1. The Bureau's credit agents will be responsible for the supervision of the Credits, including the verification of their use and the repayments from the borrowers. 2. Extension agents will regularly visit borrowers to ensure that farmers effectively carry out improved practices and make effective use of the inputs supplied under the credit. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the day of 198A-. FOR SECRETARY