Rwanda - Sectoral And Pre-Investment Studies Project : Credit 1796 - Credit Agreement - Conformed

OFFICIAL L0r1 n r. i CREDIT NUMBER 1796 RW Development Credit Agreement (Sectoral and Pre-Investment Studies Project) between RWANDESE REPUBLIC and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1987 CREDIT NUMBER 1796 RW DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated , 1987, 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; 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 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, with the last sentence of Section 3.02 deleted (the General Condi- tions) 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) "MINIPLAN" means the Borrower's Ministry of Planning; (b) "Planning and International Cooperation CIC" means the Borrower's Interministerial Coordinating Committee for planning and international cooperation, established pursuant to Presi- dential Arrdte No. 630/06 dated October 12, 1984; (c) "Fiscal Year" means the Borrower's fiscal year which runs from January 1 to December 31; (d) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement; and (e) "FR" means Francs Rwandais, the currency of the Borrower. - 2 - ARTICLE II The Credit Section 2.01. The Association agrees to lend co the Borrower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount in various currencies equivalent to five million nine hundred thousand Special Drawing Rights (SDR 5,900,000). 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 (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement for expenditures made (or, if the Association shall so agree, to be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 dollars a special account at Banque Nationale du 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. Section 2.03. The Closing Date shall be December 31, 1994, 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 withdrawn 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. -3- Section 2.05. The Borrower shall pay to the Association a service charge at te rate of three-fourths of one percent (3/4 of 1%) 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 May 15 and November 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each May 15 and November 15 commencing May 15, 1997, and ending November 15, 2036. Each installment to and including the installment payable on November 15, 2006, shall be one-half of one percent (1/2 of 1%) of such principal r-mount, and each installment thereafter shall be one and one-half percent (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 Agreement, and, to this end, shall carry out the Project through its MINIPLAN with due diligence and efficiency and in conformity with appropriate planning, administrative and financial 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. Without any limitations to the provisions of Section 3.01 of this Agreement and for purposes of financing the cost of goods and services required to carry out the Project not financed out of the proceeds of the Credit, the Borrower shall: (a) opep and thereafter maintain in FR an account (the counterpart funds account) at Bangue Nationale du Rwanda; (b) deposit into such. counterpart funds account an initial deposit in FR equivalent to $21,000; (c) thereafter deposit every quarter in said account an amount in FR equal, unless the Borrower and the Association shall otherwise agree, to the aforementioned amount; and (d) furnish to the Association for its review and comments quarterly reports on the use of said counterpart funds in sucti detail as the Association shall reasonably request. Section 3.04. For purposes of carrying out Part A of the Project, the Borrower shall: (a) not later than September 1, 1988, cause its MINIPLAN to prepare and propose to the Association a first four monthly program of strategic sectoral and subsectoral studies, prefeasi- bility, feasibility, engineering and other preinvestment studies to be carried out by the various Ministries of the Borrower. Such program shall be prepared following the procedures and in accor- dance with the selection criteria set forth in Schedule 5 to this Agreement; (b) thereafter not later than January 1, May 1, and September 1, in each lear furnish to the Association such program for review and comments within a reasonable delay; and (c) based on such comments, finalize such pro-ram. Section 3.05. For purposes of carrying out Part B of the Project, the rower shall: (a) not later than September 1 in each year prepare and furnish to the Association for review and comments a proposed annual training plan for MINIPLAN's staff and the st,-iff of the various departments of the Borrower responsible for the identifi- cation, preparation and execution of such studies for the following year; (b) based on such comments, make a12 the necessary changes in such plan; (c) not later than March 1 in each year with respect to such each annual plan, review with the Association, the progress achieved in carrying out such plan during the past six months; and (d) based on such review, if necessary, make adjustments in the implementation of such plan for the remainder of the year. - 5 - Section 3 06. The Borrower shall prepare and furnish to the Association for its approval a list of books, periodicals and educational materials to be procured under Part C of the Project togethei with the proposed schedule for the procurement thereof. Section 3.07. The Borrower shall: (a) not later than December 31, 1988, furnish to the Association a description of its planning, programming and investments budgeting structures; (b) based on the experience gained in the execution of the four monthly programs of studies, not later than December 31, each year, starting December 31, 1988, assess with the Association whether the methods and procedures adopted for the carrying out of such studies improved the functioning of the structures mentioned in paragraph (a) above; and (c) based on such review, take all appropriate actions. 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 records and accounts referred to in paragraph (a) of this Section including those for 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 said auditors, of such scope and in such detail as the Association shall have reasonably requested; and -6- (iii) furnish to the Association such other information concerning said records, accounts and the audit thereof as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account or payments out of the Special Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the comple- tion of the audit for the fiscal year in which the last withdrawal from the Credit Account or payments out of the Special Account was made, 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 records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the proce- dures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. ARTICLE V Effective Date; Termination Section 5.01. The following event is specified as an addi- tional condition to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions, namely that the counterpart funds account referred to in Section 3.03 (a) of this Agreement has been opened and the initial deposit referred to in paragraph (b) of said Section has been made. -7- Section 5.02. The date one hundred twenty (120) days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Minister of Finance and Economy 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 B.P. 158 Kigali Rwanda Cable address: Telex: MINIFINECO 502 MINAFET 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 w-4 <9"- Regional Vice President 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) Consultants' 5,670,000 90% of foreign services under expenditures and Part A of the 75% of local Project expenditures in year one, two and three, 80% of foreign expendi- tures and 75% of local expendi- tures thereafter (2) Vehicles, equip- 4,000 5% ment and mate- rials under Part D of the Project (3) Materials and 2,000 5% equipment under Part C of the Project (4) Training under 200,000 100% Part B of the Project (5) Unallocated 24,000 TOTAL 5,900,000 - 10 - 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; (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; (c) the term "year one" in the column setting forth the percentages of expenditures to be financed out of the Credit for Category (1) means the first year after effectiveness; (d) the term "year two" in the column setting forth the percentages of expenditures to be financed out of the Credit for Category (1) means the second year after effectiveness; and (e) the term "year three" in the column setting forth the percentages to be financed out of the Credit for Category (1) means the third year after effectiveness. 3. 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; and (b) expenditures for books, periodicals and educational materials under Category (3) other than those books, periodicals and educational materials included in the list approved by the Association pursuant to Section 3.06 of this Agreement. - 11 - SCHEDULE 2 Description of the Project The objective of the Project is to assist the Borrower in strengthening its planning and investment capacities by the financing of strategic sectoral, subsectoral and feasibility studies for investment projects to enable the Borrower to: (i) better define its development objectives and determine the strategies to be adopted to reach such objectives; (ii) continue improving the quality of investment projects presented to foreign donors; and (iii) strengthen the Borrower's departments respon- sible for the preparation of investment projects. Part A: Studies Identification, preparation and execution of strategic sectoral and subsectoral studies, prefeasibility, feasibility, engineering and other preinvestment studies proposed by the Borrower. Part B: Training Carrying out a training program for the staff of different departments of the Borrower responsible for the identification, preparation and execution of such studies including: (a) seminars in public investment planning and project preparation and evaluation; and (b) on-the-job training in appropriate institutions abroad. Part C: Documentation Center Provision of books, specialized periodicals and educational materials to MINIPLAN's Documentation Center. Part D: Logistical Support Provision of about 4 vehicles and office equipment to the Planning Directorate, Projects Directorate and to MINIPLAN's Documentation Center. The Project is expected to be completed by June 30, 1994. - 12 - SCHEDULE 3 Procurement and Consultants' Services Section I. Procurement of Goods Part A: Procurement Procedures 1. Contracts for equipment and vehicles estimated to cost the equivalent of $20,000 or less each may be awarded on the basis of: (a) competitive bidding, in accordance with the applicable procedures of the Borrower; and (b) comparison of price quotations from at least three suppliers eligible under the Guidelines, in accordance with the procedures referred to in paragraph 3.4 of the Guidelines. 2. Such equipment and vehicles estimated to cost less than $20,000 each may also be purchased through regular commercial and other local channels at a reasonable price, account being taken of relevant factors such as the availability of spare parts and time of delivery. Part B: 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. Where payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract required to be furnished to the Association pursuant to said paragraph 2 (d) shall be furnished to the Association prior to the making of the first payment out of the Special Account in respect of such contract. (b) With respect to each contract not governed by the preceding paragraph, the procedures set forth in paragraphs 3 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract together with the other information required to be furnished to the Association pursuant to said paragraph 3 shall be furnished to the Association as part of the - 13 - evidence to be furnished pursuant to paragraph 4 of Schedule 4 to this Agreement. (c) The provisions of the preceding subparagraphs (a) and (b) shall not apply to contracts on account of which the Association has authorized withdrawals from the Credit Account on the basis of statements of expenditure. Such contracts shall be retained in accordance with Section 4.01 (c) (ii) of this Agreement. 2. The figure of 15% is hereby specified for purposes of para- graph 4 of Appendix 1 to the Guidelines. Section II. Employment of Consultants 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 satis- factory to the Association. 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. In accordance with the principles set forth in such Guidelines and more specifically in paragraphs 1.11 to 1.14, the Borrower shall include in the shortlist to be prepared for each study one or several local consultants firms if such firms are qualified to execute the task which are prescribed, either on their own or in association with foreign firms. 14 - SCHEDULE 4 Special Account 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (1), (2), (3) and (4) 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 the eligible Categories in accor- dance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount equiva- lent to $200,000 to be withdrawn from the Gredit Account and deposited in the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Except as the Association shall otherwise agree, payments out of the Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Association has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals 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 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 or in such minimum amounts 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 expenditures. All such deposits shall be withdrawn by the Association from the Credit Account under the respective eligible Categories, and in the respective equivalent - 15 - amounts, as shall have been justified by the evidence furnished pursuant to paragraph 4 of this Schedule. 4. For each payment made by the Borrower out of the Special Account, the Borrower shall furnish to the Association, prior to or with any request for replenishment or upon request of the Association, such documents and other evidence as the Association shall reasonably request, showing that such payment was made for eligible expenditures. 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 should be made by the Borrower directly from the Credit Account in accordance with the provisions of Article V of the General Condi- tions and paragraph (a) of Section 2.02 of this Agreement; or (ii) the total unwithdrawn amount of the Credit allocated to the eligible Categories, minus the amount 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 the eligible Categories shall follow such procedures as the Association shall specify by notice to the Borrower. Such further withdrawals shall be made only after and to the extent that the Association shall have been satisfied that all such amounts remaining on deposit in the Special Account as of the date of such notice 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 - 16 - to the Association) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. 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 for crediting to the Credit Account. - 17 - SCHEDULE 5 Program of Studies MINIPLAN coordinates the preparation of a four monthly program of proposed strategic sectoral and subsectoral studies, prefeasibility, feasibility, engineering and other preinvestment studies and monitors the carrying out of such studies. Such studies are selected following the procedures and in accordance with the criteria set forth below: A. Procedures for the selection of studies to be included in the four monthly program. 1. The various Ministries of the Borrower will submit study proposals to MINIPLAN for their review. 2. Thereafter, MINIPLAN will submit such proposals to the Planning and International Cooperation CIC for further review. 3. The Minister of Planning after reviewing the recommendations of the Planning and International Cooperation CIC prepares a four monthly program of studies to be furnished to the Association for its approval pursuant to the provisions of Section 3.04 of this Agreement. B. Selection criteria for the inclusion of a proposed study in the four monthly program. 1. To be included in such program, any strategic sectoral and subsectoral study, prefeasibility, feasibility, engineering and other preinvestment study shall meet the following criteria: (a) be part of the Borrower's public investment program; and (b) unless the Borrower and the Association shall otherwise agree, the cost for each individual study as financed under Cate- gory (1) of Schedule 1 to this Agreement shall not exceed $250,000 in 1987 prices. 2. In addition, depending on its classification any such study may have to meet the following criteria: (a) feasibility studies: Such studies shall be intended for investment projects included in the Borrower's public investment program or - 18 - in sector programs for which a source of financing has been identified. (b) engineering studies: Such studies shall be related to investment projects which soundness has been demonstrated by a feasibility study. (c) rehabilitation studies: Such studies shall be for public enterprises which economic and financial viability has been demonstrated. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Development Association. FOR SECRETARY