Rwanda - Technical Assistance Project For The Improvement Of Public Finance Management : Credit 1565 - Credit Agreement - Conformed

,q J F1V i ,CREDIT NUMBER 1565 RW Development Credit Agreement (Technical Assistance Project for the Improvement of Public Finance Management) between RWANDESE REPUBLIC and INTERrATIONAL DEVELOPMENT ASSOCIATION Dated , 1985 CREDIT NUMBER 1565 RW DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated , 1985, between RWANDESE REPUBLIC (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS the Borrower, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Association to assist in the financing of the Project; 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 set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The General Conditions Applicable to Develop- ment Credit Agreements of the Association, dated January 1, 1985, (the General Conditions) constitute an integral part of this Agreement. Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions have the respec- tive meanings therein set forth and the following additional terms have the following meanings: (a) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement; (b) "Project Preparation Advance" means the project prepa- ration advance granted by the Association to the Borrower pursuant to an exchange of letters dated October 27, 1984 and December 10, 1984 between the Borrower and the Association; (c) "MINIFINECO" means the Borrower's Ministere des Finances et de l'Economie; (d) "State Investment Control Directorate" means the Direction du Contr;1e des Placements de 1'Etat within the Borrower's Inspectorate General of Finance (Direction Gen6rale, -2- Inspection Gdngrale des Finances), as established pursuant to ArrAt6 Pr6sidentiel No. 173/06, dated February 23, 1984; (e) "Interministerial Coordinating Committee on Economic Policy" means the Borrower's Comit6 Interministeriel de Coordination en matiare de Politique Economique, established pursuant to Arr@t6 Pr6sidentiel No. 630/06, dated October 12, 1984; and (f) "FY" means the fiscal year of the Borrower which corresponds to the : alendar year. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Bor- rower, on the terms and conditions set forth.'or referred to in the Development Credit Agreement, an amount in various currencies equivalent to four million nine hundred thousand Special Drawing Rights (SDR 4,900,000). 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 described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Credit. (b) The Borrower shall, for the purposes of the Project, open and maintain in US dollars a special account in the National Bank of Rwanda on terms and conditions satisfactory to the Association. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 4 to this Agreement. (c) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, w,'ithdraw from the Credit Account and pay to itself the amount required to repay the principal amount of the Project Preparation Advance withdrawn and outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advance shall thereupon be cancelled. -3- Section 2.03. The Closing Date shall be December 31, 1989 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.04. (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 Agree- ment 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. 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 1D) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Commitment charges and 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, 1995 and ending December 15, 2034. Each installment to and including the installment payable on December 15, 2004 shall be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter shall 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 declares its commitment to the objectives of the Project as set forth in Schedule 2 to this -4- Agreement, and, to this end, shall carry out the Project through MINIFINECO with due diligence and efficiency and in conformity with appropriate administrative practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. Section 3.02. Except as the Association shall otherwise agree, procurement of the goods, works and consultants' services required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to this Agreement. Section 3.03. (a) During execution of the Project, the Borrower shall maintain a project account with the National Bank of Rwanda for the purposes of making available the Borrower's contribution for the Project. (b) By April 1 and October 1 of each year during execution of the Project, the Borrower shall deposit the equivalent of $70,000 into such project account. Section 3.04. During execution of the Project, the Borrower shall: (a) employ, at all times, a national project coordinator whose qualifications and experience shall be acceptable to the Association; and (b) ensure that the Secretary Gener:l in charge of finance within MINIFINECO coordinate all technical assistance received by MINIFINECO. Section 3.05. (a) By November 1, 1985, the Borrower shall take legal measures acceptable to the Association to establish the training center referred to in Part A.1 of the Project and employ a suitably qualified director for such training center. (b) By June 1, 1986, the Borrower shall submit to the Association for approval course syllabi for all courses to be held at the training center during execution of the Project. -5- Section 3.06. During execution of the Project, the Borrower shall assign qualified national staff in adequate numbers to participate in the carrying out of the Project. Section 3.07. The Borrower shall, for purposes of carrying out the Project, prepare yearly work programs specifying the individual contribution of consultants and local staff and providing timetables for the completion of planned activities and shall consult from time to time with the Association thereon. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound 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: (i) have the accounts referred to in paragraph (a) of this Section and the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association, as soon as available, but in any case not later than six months after the end of each such year, a certified copy of the report of such audit by the 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 the said accounts and the audit thereof and said records as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals are requested from the Credit Account on the basis of statements of expenditure, the Borrower shall: - 6 - (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, separate records and accounts reflecting such expenditures; (ii) retain, until one year after the Closing Date, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association's representatives to examine such records; and (iv) ensure that such separate accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report thereof contains, in respect of such separate accounts, a separate opinion by the said auditors as to whether the proceeds of the Credit withdrawn in respect of such expenditures have been used for the purpose for which they were provided. ARTICLE V Effectiveness Section 5.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the Borrower has deposited an initial amount of the equivalent of $70,000 into the project account referred to in Section 3.03 (b) of this Agreement; and (b) the Borrower has employed a national project coordinator whose experience and qualifications are acceptable to the Association. Section 5.02. The date 120 days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. -7- ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The minister 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: Ministere des Finances et de 1'Economie Botte Postale 158 Kigali Rwanda Cable address: Telex: MINIFINECO 502 MINAFFET Rwanda 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) -8- IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, 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. RWANDESE REPUBLIC By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By By P&TRegional Vice President EAtern and Southern Africa -9- 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) Training center under Part A of the Project: (a) rehabili- 300,000 100% of foreign tation works expenditures and equip- and 80% of local ment expenditures (b) operating 220,000 costs: (i) FY 1986 100% (ii) FY 1987 60% (iii) FY 1988 40% (iv) FY 1989 10% (2) Training under 710,000 100% Part B of the Project (3) Consultants' 2,410,000 100% services (4) Computer 520,000 100% of foreign equipment and expenditures and works under 50% of local Part C.2 of expenditures the Project - 10 - Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (5) Equipment, 200,000 100% of foreign vehicles and expenditures and operating 80% of local cost under expenditures Parts C, D and E of the Project (6) Special Account 70,000 Amount to be deposited pur- suant to para- graph 3 (a) of Schedule 4 to this Agreement (7) Refunding of 460,000 Amount due pur- Project Prepara- suant to Section tion Advance 2.02.(b) of this Agreement (8) Unallocated. 10,000 TOTAL 4,900,000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: - 11 - (a) payments made for expenditures prior to the date of this Agreement; and (b) payments made for expenditures under Category (1) before the Borrower shall have complied with the provisions of Section 3.05 (a) of this Agreement to the satisfaction of the Association. - 12 - SCHEDULE 2 Description of the Project The objectives of the Project are to improve the Borrower's control over public finance, to improve its procedures for budget preparation and execution and to strengthen the Borrower's capabilities for economic policy making. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Association may agree upon from time to time to achieve such objectives: Part A: MINIFINECO Training Center 1. Establishment of a training center in MINIFINECO, including renovation of premises and provision of furniture, vehicles and equipment. 2. Start-up operation of the training center and provision of technical assistance therefor. Part B: Remedial Training Program 1. Training of selected staff of MINIFINECO and other departments of the Borrower following training modules prepared for specialized functions. 2. Training of selected staff of MINIFINECO through participa- tion in seminars abroad and participation in study tours. Part C: Improvement of Budgetary and Accounting Procedures in MINIFINECO 1. Provision of technical assistance to MINIFINECO to improve budgetary procedures, budget management and accounting procedures and to facilitate coordination of the Project. 2. Gradual introduction of automated data processing into MINIFINECO and provision of training, technical assistance and computer equipment therefor. 3. Provision of vehicles and office equipment. - 13 - Part D: Management of Public Sector Portfolio Provision of technical assistance to the State Investment Control Directorate for the design of control procedures and standardized methods for the analysis of the performance of public enterprises. Part E: Economic Decision Making Provision of technical assistance to the secretariat of the Interministerial Coordinating Committee on Economic Policy. The Project is expected to be completed by June 30, 1989. - 14 - SCHEDULE 3 Procurement and Consultants' Rervices I. Procurement of Goods and Works A. International Competitive Bidding Except as provided in Part B hereof, goods and works shall be procured under contracts awarded in accordance with procedures consistent with those set forth in Sections I and II of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in August 1984 (the Guidelines). B. Other Procurement Procedures 1. Goods, estimated to cost the equivalent of $100,000 or less may be procured under contracts awarded on the basis of evalua- tion and comparison of bids invited from a list of at least three local suppliers acceptable to the Association, in accordance with procedures acceptable to the Association. 2. Contracts for works shall be procured on the basis of com- petitive bidding, advertised locally, in accordance with proce- dures satisfactory to the Association, provided, however, that works may be carried out by force acct>rnt if approved by the Association. C. Review by the Association of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract estimated to cost the equivalent of $50,000 or more, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. (b) With respect to each contract not governed by the pre- ceding paragraph, the procedures set forth in paragraphs 3 and 4 of Appendix 1 to the Guidelines shall apply. (c) The provisions of the preceding subparagraphs (a) and (b) shall not apply to contracts on account of which the Associa- tion has authorized withdrawals from the Credit Account on the basis of statements of expenditure. Such contracts shall be - 15 - retained in accordance with Section 4.01 (c) (ii) of this Agree- ment. 2. The figure of 15% is hereby specified for purposes of para- graph 4 of Appendix 1 to the Guidelines. II. Employment of Consultants 1. In order to assist the Borrower in carrying out the Project, the Borrower shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. 2. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. - 16 - SCHEDULE 4 Special Account 1. For the purposes of this Schedule: (a) the term "Category" means a category of items to be financed out of the proceeds of the Credit as set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (b) the term "eligible expenditures" means expenditures 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 allocated from time to time to Categories (2), (3) and (5) in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount in US dollars equivalent to the amount allocated to Category (6) which is to be withdrawn from the Credit Account and deposited in the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Payments out of the Special Account shall be made exclu- sively for eligible expenditures in accordance with the provi- sions of this Schedule. 3. After the Association has received evidence satisfactory to the Association that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdra- wals to replenish the Special Account may be made as follows: (a) On the basis of a request or requests by the Borrower for a deposit or deposits which add up to the aggregate amount of the Authorized Allocation, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit in the Special Account such amount or amounts as the Borrower shall have requested. (b) The Borrower shall furnish to the Association requests for replenishment of the Special Account at such intervals as the Association shall specify. On the basis of such requests, the Association shall withdraw from the Credit Account and deposit into the Special Account such amounts as shall be required to replenish the Special Account with amounts not exceeding the amount of payments made out of the Special Account for eligible - 17 - expenditures. Except as the Association may otherwise agree, each such deposit shall be withdrawn by the Association from the Credit Account under the respective Categories (2), (3) and (5), and in the respective equivalent amounts, as shall have been justified by the evidence supporting the request for such deposit furnished pursuant to paragraph 4 of this Schedule. 4. For each payment made by the Borrower out of the Special Account for which the Borrower requests replenishment pursuant to paragraph 3 (b) of this Schedule, the Borrower shall furnish to the Association, prior to or at the time of such request, such documents and other evidence as the Association shall reasonably request, showing that such payment was made for eligible expen- ditures. 5. (a) Notwithstanding the provisions of paragraph 3 of this Schedule, no further deposit into the Special Account shall be made by the Association when either of the following situations first arises: (i) the Association shall have determined that all further withdrawals can be made directly by the Borrower from the Credit Account in accordance with the provisions of paragraph (a) of Section 2.02 of this Agreement; or (ii) unless otherwise agreed by the Association, when the total unwithdrawn amount of the Credit allo- cated to Categories (2), (3) and (5) for the Project, minus the amount of any outstanding qualified agreement to reimburse made by the Association and of any outstanding special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions with respect to the Project, shall be equal to the equivalent of twice the amount of the Authorized Allocation. (b) Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to Cate- gories (2), (3) and (5) for the Project shall follow such procedures as the Association shall specify by notice to the Borrower. Except as the Association shall otherwise agree, such further withdrawals shall be made only after and to the extent that the Association shall have been satisfied that all such - 18 - amounts remaining on deposit in the Special Account as of the date of such notice have been or will be utilized in making payments for eligible expenditures. 6. (a) If the Association shall have determined at any time that any payment out of the Special Account (i) was made for any expenditure or in any amount not eligible pursuant to paragraph 2 of this Schedule, or (ii) was not justified by the evidence furnished pursuant to paragraph 4 of this Schedule, the Borrower shall, promptly upon notice from the Association, deposit into the Special Account (or, if the Association shall so request, refund to the Association) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. Unless otherwise agreed by the Association, no further deposit by the Association into the Special Account shall be made until the Borrower has made such deposit or refund. (b) If the Association shall have determined at any time that any amount outstanding in the Special Account will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. 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 , 198 5. FOR SECRETARY