Conformed Copy - C2370 - Natural Resources Management Project - Development Credit Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2370 MLI (Natural Resources Management Project) between REPUBLIC OF MALI and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated July 15, 1992 CREDIT NUMBER 2370 MLI DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated July 15, 1992, between the REPUBLIC OF MALI (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS (A) 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; (B) the Borrower intends to contract from the German Technical Cooperation Agency (GTZ) a grant (the GTZ Grant) in an amount of SDR 900,000 to assist in financing the Project on the terms and conditions set forth in an agreement (the GTZ Agreement) to be entered into between the Borrower and GTZ; (C) the Borrower intends to contract from the Government of Norway a grant (the Norwegian Grant) in an amount of SDR 3,750,000 Page 2 to assist in the financing of the Project on terms and conditions set forth in an agreement (the Norway Agreement) to be entered into between the Borrower and the Government of Norway; and (D) the Borrower intends to contract from the United Nations Development Programme (UNDP) a grant (the UNDP Grant) in an amount of SDR 1,125,000 to assist in the financing of the Project on terms and conditions set forth in an agreement (the UNDP Agreement) to be entered into between the Borrower and UNDP; 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 Conditions) constitute an integral part of this Agreement. Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Special Account" means the Special Accounts A and B referred to in Section 2.02 (b) of this Agreement and "Second Generation Special Accounts" means the accounts referred to in Section 2.02 (c) of this Agreement; (b) "CFAFranc" means the currency of the Borrower; (c) "MAEE" means Ministcre de l'Agriculture de l'Elevage et de l'Environnement; (d) "CIMU" means Central Implementation and Monitoring Unit, established by the proposed project; (e) "CRD" means Comite Regional de Developpement; (f) "CLD" means Comite Local de Developpement; (g) "TST" means Technical Support Teams; (h) "PNCC" means Project National Coordinating Committee; (i) "Bank" means the International Bank for Reconstruction and Development; (j) "PPF" means Project Preparation Facility means the project preparation advance granted by the Association to the Borrower according to an exchange of letters dated May 27, 1992, June 24, 1992, between the Borrower and the Association; and (k) "Agricultural Services Project" means the Project funded by the Association under Credit No. 2235 MLI. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount in various currencies equivalent to fifteen million Special Drawing Rights (SDR 15,000,000). Page 3 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 CFAF two special deposit accounts in a commercial bank on terms and conditions satisfactory to the Association, including appropriate protection against set-off, seizure or attachment. (c) The Borrower shall, for the purposes of Part I. A of the Project, open and maintain in CFAF up to three second generation accounts in one or more commercial banks acceptable to the Association, on terms and conditions satisfactory to the Association (including appropriate protection against set-off, seizure or attachment), one in the name of each of the Project's Regional Coordinators of the three regions covered by the Project. The second generation accounts are replenished by the Special Account A. (d) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, withdraw 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 canceled. (e) Deposits into, and payments out of, two Special Accounts and the Second Generation Accounts shall be made in accordance with the provisions of Schedule 5 to this Agreement. Section 2.03. The Closing Date shall be June 30, 1998 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 on the principal amount of the Credit not withdrawn from time to time at a rate to be set by the Association as of June 30 of each year, but not to exceed the rate of one-half of one percent (1/2 of 1%) per annum. (b) The commitment charge shall accrue: (i) from the date sixty days after the date of this Agreement (the accrual date) to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or canceled; and (ii) at the rate set as of the June 30 immediately preceding the accrual date and at such other rates as may be set from time to time thereafter pursuant to paragraph (a) above. The rate set as of June 30 in each year shall be applied from the next date in that year specified in Section 2.06 of this Agreement. (c) 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 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 semi-annually on March 1 and September 1 in each year. Section 2.07. (a) Subject to paragraphs (b) and (c) below, the Page 4 Borrower shall repay the principal amount of the Credit in semi- annual installments payable on each March 1 and September 1 commencing September 1, 2002 and ending March 1, 2032. Each installment to and including the installment payable on March 1, 2012 shall be one percent (1%) of such principal amount, and each installment thereafter shall be two percent (2%) of such principal amount. (b) Whenever (i) the Borrower's gross national product per capita, as determined by the Association, shall have exceeded $790 in constant 1985 dollars for five consecutive years, and (ii) the Bank shall consider the Borrower creditworthy for Bank lending, the Association may, subsequent to the review and approval thereof by the Executive Directors of the Association and after due con- sideration by them of the development of the Borrower's economy, modify the terms of repayment of installments under paragraph (a) above by requiring the Borrower to repay twice the amount of each such installment not yet due until the principal amount of the Credit shall have been repaid. If so requested by the Borrower, the Association may revise such modification to include, in lieu of some or all of the increase in the amounts of such installments, the payment of interest at an annual rate agreed with the Association on the principal amount of the Credit withdrawn and outstanding from time to time, provided that, in the judgment of the Association, such revision shall not change the grant element obtained under the above-mentioned repayment modification. (c) If, at any time after a modification of terms pursuant to paragraph (b) above, the Association determines that the Borrower's economic condition has deteriorated significantly, the Association may, if so requested by the Borrower, further modify the terms of repayment to conform to the schedule of installments as provided in paragraph (a) above. Section 2.08. The currency of the French Republic is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) 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 MAEE with due diligence and efficiency and in conformity with appropriate administrative, financial and technical practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) Without limitation upon the provisions of paragraph (a) of this Section and except as the Borrower and the Association shall otherwise agree, the Borrower shall carry out the Project in accordance with the Implementation Program set forth in Schedule 4 to this Agreement. Section 3.02. Except as the Association and the Borrower 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. The Borrower shall, for the purpose of carrying out the Project, employ and maintain staff with qualifications, experience, terms and conditions of employment, all satisfactory to the Association. Section 3.04. The Borrower shall: (a) establish and maintain for the duration of the Project the Project National Coordinating Committee (PNCC) with composition and functions acceptable to the Association; (b) hire, not later than September 30, 1992, a consultant with terms of reference and qualifications acceptable to Page 5 the Association, to set up the Project's computerized management and accounting system and prepare an accounting procedures manual and train projects accountants; and (c) cause the Project Director to convene not later than December 31 of each year, a Project implementation review meeting with the Association, other co- financiers and regional and local authorities to review and approve recommendations of PNCC. Section 3.05. Without limitation upon the provisions of Section 9.01 of the General Conditions: (a) the Borrower and the Association shall not later than December 31, 1995, conduct a mid-term Project implementation review to: (i) monitor progress of Project implementation; (ii) assess the experience of land tenure arrangements, aiming at setting up an action plan to be agreed upon between the Borrower and the Association, including measures to replace, modify or implement the existing land tenure framework; (iii) evaluate the support given to the Environmental Monitoring Facility at the national level, parti- cularly concerning the elaboration of the environmental Information System to be prepared; (iv) assess the Baoule National Park mana- ment plan; and (v) evaluate the implementation of training program. (b) Not later than six weeks prior to such review, the Borrower shall furnish to the Association for its review and com- ments a report in such detail as the Association shall reasonably request, including: (i) an evaluation of progress achieved in Project implementation by the Borrower in general, and by its central, regional and local agencies, in particular; and (ii) a draft action program for the completion of the Project. (c) Promptly after completing the mid-term review, carry out recommendations of the said review as agreed upon between the Borrower and the Association. 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 Accounts and each Second Generation 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 (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 were made on the basis of statements of expenditure, the Borrower shall: Page 6 (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 Association has received the audit for the fiscal year in which the last withdrawal from the Credit 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 procedures 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 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 submitted to the Association a detailed procurement plan with timetables, satisfactory to the Association; (b) the Borrower has submitted to the Association bidding documents for subcontracting the implementation of Part I.D (a) of the Project, satisfactory to the Association; (c) contractual arrangements, satisfactory to the Association, have been concluded between the CIMU and the directorate of the Agricultural Services Project on the coordination of the two projects; (d) the Borrower has appointed an auditing firm, acceptable to the Association, to audit the Project's accounts; (e) an operation monitoring system, satisfactory to the Association, has been established for the Project; (f) the accounting and financial management system under Part I of the Project, satisfactory to the Association, has been put in place; (g) a Manuel de Procedures, satisfactory to the Association, has been adopted for the preparation, the negotiation and the implementation of villages natural resources management plans, including the necessary actions for land-tenure arrangements for villages concerned by the Project, including: (i) assessment of land-tenure rights of local population; and (ii) negotiations with the local authorities in order to implement land-tenure arrangements involving local communities participation; (h) a staffing plan for the Project, satisfactory to the Association, and a short list for the key position, have been submitted to the Association; (i) the Borrower has furnished a proof, satisfactory to the Association, establishing that the land-tenure arrangements envisaged under the Project may be implemented under legislative and regulatory framework in force in the Borrower's territory; and Page 7 (j) audits reports required under Development Credit Agreements between the Association and the Borrower for Mopti Area Development Project (Credit No. 1595 MLI), Agricultural Sector Adjustment Credit (Credit No. 2163 MLI) and Office du Niger Consolidation Project (Credit No. 1906 MLI), respectively, has been provided to the Association. Section 5.02. The date ninety (90) days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Representativeas