Niger - Industrial Development Project : Credit 1225 - Credit Agreement - Conformed

L.DMMT CREDIT NUMBER 1225 NIR Development Credit Agreement (Industrial Development Project) between REPUBLIC OF NIGER and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1982 CREDIT NUMBER 1225 NIR DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated / 0 , 1982, between REPUBLIC OF NIGER (hereinafter called the Borrower) and INTER- NATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Associa- tion). 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 Project will be carried out by Banque de D6veloppe- ment de la R6publique du Niger (hereinafter called BDRN), Office de Promotion de l'Entreprise Niferienne (hereinafter called OPEN), and Centre des Metiers d'Art du Niger (hereinafter called CMAN) with the Borrower's assistance, and as part of such assistance, the Borrower will make available to BDRN, OPEN and CMAN the proceeds of the Credit as hereinafter provided; and (C) the Association is willing to make the Credit available upon the terms and conditions set forth hereinafter and in the Project Agreement of even date herewith between the Association and BDRN; 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 June 30, 1980, with the same force and effect as if they were fully set forth herein, subject, however, to the following modifications thereof (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions): (a) The following subparagraph is added to Section 2.01: "14. The term 'Project Agreement' has the meaning set forth in paragraph (a) of Section 1.02 of the Development Credit Agreement." -2- (b) The words "Investment P,ojects" are added after the words "the Project" at the end of Section 5.03. (c) Section 6.03 is deleted and replaced by the following new Section: "Section 6.03. Cancellation by the Association. If (a) the right of the Borrower to make withdrawals from the Credit Account shall have been suspended with respect to any amount of the Credit for a continuous period of thirty days or (b) by the date specified in Section 2.02 (e) of the Project Agreement no applications for approval or requests for authorization to withdraw from the Credit Account in respect of any portion of the Credit shall have been received by the Association, or having been so received, shall have been denied or (c) after the Closing Date an amount of the Credit shall remain unwithdrawn from the Credit Account, the Association may, by notice to the Borrower, terminate the right to request such approvals and authorizations or to make withdrawals from the Credit Account, as the case may be, with respect to such amount or portion of the Credit. Upon the giving of such notice such amount or portion of the Credit shall be cancelled." (d) The words "and the Project Agreement" are added after the words "the Development Credit Agreement" in Section 6.06; and (e) The words "or the Project Agreement" are added after the words "the Development Credit Agreement" in Section 10.02. 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) "Project Agreement" means the agreement of even date herewith between the Association and BDRN, as such agreement may be amended from time to time. (b) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and BDRN pursuant to Section 3.Ol (b) of this Agreement, and "Subsidiary Loan" means the loan provided for in the Subsidiary Loan Agreement. -3- (c) "Sub-loan" means a loan or credit made or proposed to be made by BDRN to an Investment Enterprise for an Investment Project out of the equivalent of the proceeds of the Credit relent to BDRN under the Subsidiary Loan Agreement, and "free-limit Sub-loan" means a Sub-loan, as so defined, which qualifies as a free-limit Sub-loan purOuant to the provisions of Section 2.02 (b) of this Agreement. (d) "Investment" means an investment other than a Sub-loan, made or proposed to be made by BDRN in an Investment Enterprise for an Investment Project out of the equivalent of the proceeds of the Credit relent to BDRN under the Subsidiary Loan Agreement. (e) "Investment Enterprise" means an enterprise to which BDRN proposes to make or has made a Sub-loan or in which it proposes to make or has made an Investment, and "Small-Scale Investment Enterprise" means an Investment Enterprise carrying out a new development project or an extension of an existing develop- ment project valued at not more than FCFA 50,000,000 or any other amount satisfactory to the Association. (f) "Investment Project" means a specific development project to be carried out by an Investment Enterprise utilizing the proceeds of a Sub-loan or Investment, and "labour intensive Investment Project" means an Investment Project in which the investment cost of each job to be created by it does not exceed FCFA 4,500,000 or any other amount satisfactory to the Asso- ciation. (g) "CFA Francs" and "FCFA" mean the currency of the Borrower and for purposes of paragraphs (e) and (f) above mean CFA Francs in terms of CFA Francs on December 31, 1981. (h) "Statutes" means the Statuts of BDRN approved on May 29, 1961, as amended to date and as further amended from time to time. (i) "By-laws" means the Riglement int6rieur of BDRN as adopted and approved by its General Assembly on March 1, 1978, as amended to date and as further amended from time to time. (j) "Prior Credit Agreement" means the development credit agreement between the Borrower and the Association dated June 7, 1978, and "Prior Credit" means the credit provided for therein. -4- (k) "Subsidiary" means any company of which a majority of the outstanding voting stock or other proprietary interest is owned or effectively controlled by BDRN or by any one or more subsidiaries of BDRN or by BDRN and one or more of its subsi- diarIes. (1) "Ordonnance" means Ordonnance No. 78-34, dated Novem- ber 3, 1978, of the Borrower establishing OPEN. (m) "Dcret" means Dfcret 78-120, dated November 3, 1978, of the Borrower containing the statutes of OPEN. (n) "CMAN's Statutes" means the statutes of CMAN referred to in paragraph 4 (e) of Schedule 1 to 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 equiv- alent to fourteen nill!on Special Drawing Rights (SDR 14,000,000). 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 tirne 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; provided, however, that, no amount shall be withdrawn from the Credit Account in respect of an Investment Project unless (A) the Sub-loan or Investment for such Investment Project shall have been approved by the Association or (B) the Sub-loan shall be a free-limit Sub-loan for which the Association shall have authorized withdrawals from the Credit Account. (b) A free-limit Sub-loan shall be a Sub-loan for an Invest- ment Project in an amount to be financed under the Development Credit Agreement which, together with any other amount or amounts previously financed for the same Investment Project under the Development Credit Agreement or under the Prior Credit Agreement, and not repaid, shall not exceed in the aggregate the equivalent -5- of $200,000 and which, when added to all other free-limit Sub- loans financed under the Development Credit Agreement, shall not exceed in the aggregate the equivalent of $4,000,000, the foregoing amounts being subject to change from time to time as determined by the Association. (c) Except as the Association shall otherwise agree, no withdrawals shall be made on account of: (i) expenditures made in respect of a Sub-loan subject to the Association's approval, or of an Investment, more than ninety days prior to the date on which the Association shall have received the application and informa- tion required under Section 2.02 (b) of the Project Agreement; (ii) expenditures made in respect of a free-limit Sub-loan more than ninety days prior to the date on which the Association shall have received the request and information required by Section 2.02 (c) of the Project Agreement or; (iii) expenditures made in respect of an Investment Project with an economic rate of return of less than 10%. Section 2.03. BDRN is designated as representative of the Borrower for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. Section 2.)4. The Borrower shall cause OPEN and CMAN to procure the goods and civil works required for Parts B and C of the Project and to be financed out of the proceeds of the Credit on the basis of local procurement procedures satisfactory to the Association. Section 2.05. (a) The Borrower shall pay to the Association a commitment charge at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of the Credit not with- drawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Development Credit Agreement to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or shall be cancelled. (b) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without restrictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. -6- Sectior 2.06. The Closing Date shall be December 31, 1987 or such later date as the Association shall establish. The Association shall promptly notify the Borrower and BDRN of such later date. Section 2.07. 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 2.08. Service and commitment charges shall be payable semi-annually on Jaruary 15 and July 15 in each year. Section 2.09. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each Jan- uary 15 and July 15 commencing July 15, 1992, and ending Jan- uary 15, 2032, each installment to and including the install- ment payable on January 15, 2002, to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment there- after to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.10. The currency of the French Republic is hereby specified for the purposes of Section 4.02 of the General Condi- tions. ARTICLE III Execution of the Project; Use of Proceeds of the Credit Section 3.01. (a) Without limitation or restriction upon any of its other obligations under the Development Credit Agree- ment, the Borrower shall: (i) cause BDRN, OPEN and CMAN to carry out Parts A, B and C of the Project, respectively, and EDRN to perform in accordance with the provisions of the Project Agreement all the obligations therein set forth; (ii) take and cause to be taken all action, including the provisions of funds, facilities, services and other resources, necessary or appropriate for these purposes; and (iii) not take or permit to be taken any action which would prevent or interfere with the carrying out by BDRN, OPEN and CMAN of their respective Part of the Project or the performance of BDRN of its obligations under the Project Agree- ment. -7- (b) The Borrower shall: (i) relend to BDRN the equivalent amount of the proceeds of the Credit allocated to and withdrawn for Part A.1 of the Project under a Subsidiary Loan Agreement to be entered into between the Borrower and BDRN containing terms and conditions which shall have been approved by the Association, including a term of 18 years, incluJing 3 years of grace, interest at the rate of 7-1/2% per annum on the outstanding principal amount of the Subsidiary Loan to be relent to Investment Enter- prises which qualify as small-scale Investment Enterprises or for labour-intensive Investment Projects, and at the rate of 10% per annum on the outstanding principal amount of the Subsidiary Loan to be relent to other Investment Enterprises, a commitment fee of 1/2% per annum on the unwithdrawn amount of the Subsidiary Loan, and the assumption by the Borrower of the foreign exchange risk against the payment by BDRN to the Borrower of a fee of 1/2% per annum on the outstanding principal amount of the Subsidiary Loan; and (ii) make available to BDRN, as a grant, the equivalent amount of the proceeds of the Credit allocated to and withdrawn for Part A.2 of the Project. (c) The Borrower shall transfer to OPEN, as a grant, the equivalent amount of the proceeds of the Credit allocated to and withdrawn for Part B of the Project. (d) The Borrower shall transfer to CMAN, as a grant, the equivalent amount of the proceeds of the Credit allocated to and withdrawn for Part C of the Project. (e) The Borrower shall exercise its rights under the Sub- sidiary Loan Agreement and the Financing Agreement in such manner as to protect the interests of the Borrower and the Association and to accomplish the purposes of the Credit, and except as the Association shall otherwise agree, the Borrower shall not assign, nor amend, abrogate or waive the Subsidiary Loan Agreement or the Financing Agreement or any provision thereof. Section 3.02. In order to assist in the carrying out of Parts B and C of the Project, the Borrower shall cause OPEN and CMAN to employ consultants whose selection, qualifications, experience and terms and conditions of employment shall be satisfactory to the Association in accordance with the principles and procedures described in the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" pub- lished by the Bank in August 1981. -8- Section 3.03. (a) The Borrower undertakes to cause the imported goods for Parts B and C of the Project to be financed out of the proceeds of the Credit to be insured, or that adequate provision for the insurance there,3f is made, against hazardr 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) 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, including OPEN's semi-annual progress reports in respect of Part B of the Project and CMAN's quarterly progress reports in respect of Part C of the project, contract documents and construc- tion and procurement schedules for Parts B and C of 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 main- tained records and procedures adequate to record and monitor the progress of Parts B and C of the Project (including their cost and the benefits to be derived from them), to identify the goods and services for Parts B and C of the Project 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 faciliti.s 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 at regular intervals all such information as the Association shall reasonably request concerning Parts B and C of the Project, their cost and, where appropriate, the benefits to be derived from them, 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. -.9- (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 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 performance by the Association and BDRN of their respective obligations under the Project Agreement and the accomplishment of the purposes of the Credit. Section 3.05. For purposes of carrying out Part B of the Project, the Borrower shall cause OPEN: (a) to establish the Technical Assistance Unit included in paragraph 4 thereof and construct the facilities included in paragraph 5 thereof, all in accordance with designs satisfactory to the Association; (b) to furnish to the Association, not later than Septem- ber 31 in each year, the proposed budget for OPEN for the follow- ing year, including the proposed use of the proceeds of the Credit allocated to OPEN, and afford the Association an opportunity to comment thereon; and (c) in respect of Part B.3 of the Project, to enter into contractual arrangements, satisfactory to the Association, with each one of the institutions competent to assist OPEN in providing the training concerned. Section 3.06. For purposes of carrying out Part C of the Project, the Borrower shall: (a) furnish to the Association a three year plan of action and proposed budget therefor satisfactory to the Association; and (b) cause CMAN: (i) to make the loans included in Part C.2 of the Project on terms and conditions satisfactory to the Association; and (ii) to deposit in the revolving fund established under the Prior Credit Agreement any amounts accruing to OMAN from carrying out Part C.2 of the Project. - 10 - ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall cause OPEN and CMAN to conduct their respective operations and affairs, with due dili- gence and efficiency and in conformity with appropriate economic, financial and administrative standards and practices, with quali- fied and experienced management and, in the case of OPEN, in accordance with the Ordonnance and the Decret, and, in the case of CMAN, in accordance with CMAN's statutes. (b) The Borrower shall, not later than December 31, 1983, provide OPEN three additional qualified persons as part of OPEN's management. Section 4.02, The Borrower shall cause OPEN and CMAN to maintain procedures and records adequate to monitor and record the progress of Parts B and C of the Project, respectively, (including their cost and the benefits to be derived from them) and to reflect in accordance with consistently maintained appropriate accounting practices the operations and financial condition of OPEN and CMAN, and shall enable the Association's representatives to examine such records. Section 4.03. The Borrower shall cause OPEN and CMAN: (i) to have their accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors accept- able to the Association; (ii) to 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 audit 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 financial statements and the audit thereof as the Association shall from time to time reasonably request. Section 4.04. (a) The Borrower shall cause the facilities included in Parts B and C of the Project to be staffed and oper- ated in accordance with appropriate policies and practices and with due regard to economy. - 11 - (b) The Borrower shall cause such facilities to be ade- quately inspected and maintained, cause all necessary repairs and renewals thereof to be made in accordance with sound administra- tive and technical standards, and provide, promptly as needed, the funds, facilities and services and other resources required for the purpose. Section 4.05. The Borrower shall: (a) not later than June 30, 1984, review the Borrower's investment promotion policies and procedures and furnish to the Association the results of such review; (b) afford the Association a reasonable opportunity to comment thereon; and (c) carry out, promptly thereafter, any action to improve such policies and procedures which may be necessary or advisable in the light of said review after giving due consideration to the Association's views. Section 4.06. The Borrower shall take all action necessary on its part to ensure that: (a) not later than June 30, 1983, the Equity Participation and Guarantee Funds managed by OPEN adopt statutes satisfactory to the Association; and (b) such statutes remain thereafter in effect. 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) a default shall occur in the performance of any obliga- tion of BDRN under the Project Agreement or under any other project agreement between the Association and BDRN; (b) the Statutes shall have been amended so as to affect materially and adversely the operations or financial condition of BDRN; (c) the Ordonnance or the Dfcret shall have been amended so as to affect materially and adversely the operations or finan- cial condition of OPEN; - 12 - (d) CMAN's Statutes shall have been amended so as to affect materially and adversely the operations or financial condition of CMAN; (e) BDRN shall be unable to pay its debts as they mature or any action or proceeding shall have been undertaken whereby any of the property of BDRN shall or may be distributed among its creditors; (f) any part of the principal amount of any loan to BDRN having an original maturity of one year or more shall, in accor- dance with its terms, have become due and payable in advance of maturity, as provided in the relative contractual instruments, or any security for any such loan shall have become enforceable; (g) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of BDRN, OPEN or CMAN or for the suspension of its opera- tions; and (h) a Subsidiary or any other entity shall have been created or acquired or taken over by BDRN, if such creation, acquisition or taking over would adversely affect the conduct of BDRN's business, its financial situation, the efficiency of its management and personnel or the carrying out of the Project. 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), (b), (c), (d) or (h) of Section 5.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower and BDRN; and (b) any event specified in paragraphs (e), (f) or (g) of Section 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following event is specified as an addi- tional condition to the effectiveness of the Development Credit - 13 - Agreement within the meaning of Section 12.01 (b) of the General Conditions, namely, that the Subsidiary Loan Agreement has been entered into by the Borrower and BDRN, respectively. Section 6.02. The following are specified as additional matters, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association: (a) that the Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, BDRN, and constitutes a valid and binding obligation of BDRN in accord- ance with its terms; and (b) that the Subsidiary Loan Agreement has been duly author- ized or ratified by, and constitutes a valid and binding obliga- tion of, the Borrower and BDRN in accordance with its terms. Section 6.03. The date -.20,/9eZ, is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.04. The provisions of paragraphs (a) through (f) of Section 5.01 of this Agreement and those of paragraphs (a) and (b) of Section 5.02 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date 18 years after the date of this Agreement, whichever shall be the earlier. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. Subject to the provisions of Section 2.03 of this Agreement, the Ministre du Plan 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: Ministgre du Plan B.P. 862 Niamey Niger - 14 - Cable address: Telex: MINIPLAN 5230 CDN Niamey 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) 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 city of Niamey, Niger, as of the day and year first above written. REPUBLIC OF NIGER By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By President - 15 - 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) Goods and services 100% of foreign for Investment expenditures Projects: and 85% of local expend- itures (a) Small-scale 2,180,000 Investment Enterprises and Labour- intensive Investment Projects (b) Other Invest- 8,280,000 ment Projects (2) Training and consul- 700,000 100% of foreign tants' services expenditures (BDRN) (3) Part B of the 100% Project (except Part B.5): (a) Studies and 440,000 training - 16 - Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (b) Goods and ser- 90,000 vices for OPEN's operations (c) Technical unit 660,000 (Part B.4) (4) Goods and services 470,000 70% for Part B.5 of the Project (5) Part C of the 100% Project: (a) Training 210,000 (b) Common 580,000 Services (c) Technical 260,000 Assistance (6) Unallocated 130,000 TOTAL 14,000,000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from - 17 - the territory of the Borrower; provided, however, that if the currency of the Borrower is also that of another country from the territory of which goods or services are supplied, expenditures in such currency for such goods or services shall be deemed to be "foreign expenditures". 3. 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 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. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) payments made for expenditures prior to the date of this Agreement; (b) payments made for Part B.5 of the Project unless the Association has been furnished with the designs therefor referred to in Section 3.05 (a) of this Agreement; (c) payments for training in a specific subject under Part B.3 of the Project unless the Association has been furnished with the arrangements referred to in Section 3.05 (c) of this Agreement with the institution responsible to assist OPEN in providing such training; and (d) payments made for Part C of the Project unless: (i) the Association has been furnished with the plan and budget referred to in Section 3.06 (a) of this Agreement; (ii) CMAN has adopted "Statutes" satisfactory to the Association; (iii) the Association has been furnished with CMAN's audited financial statements for fiscal year 1981; and (iv) CMAN has established an adequate accounting system to reflect its operations, resources and expen- ditures, and purchasing and inventory procedures satisfactory to the Association. - 18 - 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in para- graph 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. 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 expenditures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restric- ting or limiting any other right, power or remedy of the Associa- tion under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as, in the Associa- tion's reasonable opinion, represents the amount of such expendi- tures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 19 - SCHEDULE 2 Description of the Project The purpose of the Project is to assist the Borrower in financing such productive facilities and resources in Niger as will contribute to the economic and social development of the country. The Project consists of: Part A: BDRN 1. Financing by BDRN of specific development projects through loans to or investments in enterprises in Niger, in furtherance of the corporate purposes of BDRN as set forth in the Statutes and By-laws. 2. (a) Strengthening of BDRN's Development Department; (b) Establishment of a training unit in BDRN, and acquisi- tion and utilization of equipment therefor; and (c) Improvement of BDRN's computerized data processing. Part B: OPEN 1. Improvement of OPEN's organization and strategy in assisting small- and medium-scale enterprises and artisans. 2. (a) Studies to assess Vthe Borrower's imports and the Borrower's opportunities for import substitution and exports. (b) Studies to determine the type of artisan products to be made and the form of assistance most appropriate for the artisan sector. 3. Training of workers in technical subjects such as book- keeping, woodworking, electricity and plumbing. 4. Establishment of a technical assistance unit to provide technical assistance to civil works contractors in Niger. 5. Construction and equipping of new facilities for the use of OPEN. - 20 - Part C: CMAN 1. Establishment and equipping of training facilities for leathercraft. 2. Provision of common services to artisans, including granting of small loans in kind to artisans for raw materials and tools from bulk purchases made by CMAN, and marketing services. 3. Improvement of CMAN's management, and CMAN's commercial and marketing operations. Parts A.2, B and C of the Project are expected to be com- pleted by December 31, 1986. INTERNATIONAL DEVELOPMENT ASSOCIATION g&ITIFICATE 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 198 A. FOk SECRETARY