Conformed Copy - C2424 - Agricultural Extension Project - Development Credit Agreement

Page 1 CONFORMED COPY CREDIT NUMBER 2424 UG Development Credit Agreement (Agricultural Extension Project) between THE REPUBLIC OF UGANDA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated March 26, 1993 CREDIT NUMBER 2424 UG DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated March 26, 1993, between THE REPUBLIC OF UGANDA (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 Development Credit Agreements" of the Association, dated January 1, 1985, with the last sentence of Section 3.02 deleted (the Page 2 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 respective meanings therein set forth and the following additional terms have the following meanings: (a) "MAAIF" means the Borrower's Ministry of Agriculture, Animal Industry and Fisheries; (b) "DAP" means a District Action Plan referred to in paragraph A.2 of Schedule 4 to this Agreement; (c) "DFI" means District Farm Institutes; (d) "FEW" means Field Extension Worker; (e) "M&E" means Monitoring and Evaluation; (f) "MIS" means Management Information System; (g) "NARO" means the Borrower's National Agricultural Research Organization; (h) "MTAC" means the Borrower's Management Training and Advisory Center; (i) "SMS" means Subject Matter Specialist; (j) "T&V" means the Training and Visit system of management of extension; (k) "Project Account" means the account referred to in Section 3.03 of this Agreement; (l) "Project Preparation Advance" means the project preparation advance granted by the Association to the Borrower pursuant to the letter from the Association dated June 23, 1992, and confirmed by the Borrower on July 24, 1992; and (m) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount in various currencies equivalent to eleven million Special Drawing Rights (SDR 11,000,000). 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 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 deposit account in a commercial bank on terms and conditions satisfactory to the Association, including appropriate protection against set-off, seizure or attachment. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 5 to this Agreement. (c) 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 Page 3 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. 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 cancelled; and (ii) at the rate set as of the June 30 immediately preceding the accrual date or 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 payment 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 semiannually on March 1 and September 1 in each year. Section 2.07. (a) Subject to paragraphs (b) and (c) below, the Borrower shall repay the principal amount of the Credit in semi- annual installments payable on each March 1 and September 1 commencing March 1, 2003, and ending September 1, 2032. Each installment to and including the installment payable on September 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 consideration 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 Page 4 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 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. (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 MAAIF, with due diligence and efficiency and in conformity with appropriate agricultural extension, financial and administrative 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 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: (a) establish and maintain, until completion of the Project, a separate Project Account with a commercial bank, into which it shall deposit its contributions to the Project, in accordance with established budgetary procedures acceptable to the Association; and (b) at the beginning of each quarter deposit into said Project Account a sufficient amount to cover its contribution during such quarter. 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 nine months after the end of fiscal year 1993 and six months after the end of fiscal year 1994 and thereafter 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. Page 5 (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: (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 report for the fiscal year in which the last withdrawal from the Credit Account or payment 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 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 shall have appointed the Extension Adviser, the Procurement Specialist and the Financial Officer referred to in paragraphs B.5, A.3 and A.4 of Schedule 4 to this Agreement, respectively; (b) the Borrower shall have opened the Project Account referred to in Section 3.03 of this Agreement; and (c) the Borrower shall have furnished the annual work program and budget, referred to in paragraph A.2 of Schedule 4 to this Agreement, for the first year of Project Implementation. 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 Representatives of the Borrower; Addresses Section 6.01. The Minister of 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: Ministry of Finance and Economic Planning P.O. Box 8147 Page 6 Kampala, Uganda Cable address: Telex: FINSEC 61170 Kampala For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 248423 (RCA) Washington, D.C. 82987 (FTCC) 64145 (WUI) or 197688 (TRT) 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. REPUBLIC OF UGANDA By /s/ Stephen K. Katenta-Apuli Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Edward V.K. Jaycox Regional Vice President Africa 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) Civil Works 1,650,000 100% of foreign expenditures and 60% of local expenditures (2) Vehicles and 1,290,000 100% of foreign equipment expenditures and 85% of local expenditures (3) Consultants' 1,040,000 100% of foreign services expenditures and 95% of local Page 7 expenditures (4) Training 1,720,000 100% (5) Demonstration and 440,000 100% of foreign field trials expenditures and 100% of local expenditures until December 31, 1994 and 65% of local expenditures thereafter Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (6) Incremental recurrent costs (a) Field 3,160,000 100% of foreign operations expenditures and 100% of local expenditures up to December 31, 1994 and 65% of local expenditures thereafter (b) Non-field 250,000 100% of foreign operations expenditures and 65% of local expenditures (7) Refunding of 350,000 Amounts due pur- Project Prepara- suant to Section tion Advance 2.02 (c) of this Agreement (8) Unallocated 1,100,000 _________ TOTAL 11,000,000 ========== 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; (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; and (c) the term "incremental recurrent costs" means the incremental recurrent costs arising under the Project on account of the following: (i) in the case of "field operations", performance, field and travel allowances, vehicle operating costs, supplies, and maintenance of equipment and buildings; and (ii) in the case of "non-field operations", headquarters vehicle operating costs, supplies and maintenance of equipment and buildings. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made: (a) in respect of payments made for expenditures prior to the date of this Agreement; and (b) in respect of payments for expenditures under Category (1) of the table in paragraph 1 above, unless the Borrower has recruited a consultant having qualifications, experience and terms of reference acceptable to the Association, to complete necessary designs and drawings, and Page 8 thereafter supervise civil works under the Project. SCHEDULE 2 Description of the Project The broad objectives of the Project are to address the urgent needs for disease control and yield improvements and to build capacity to deliver and support effective extension services, in particular the Project shall assist the Borrower in improving (i) efficiency in the delivery of extension services in sixteen districts; (ii) training capacity and skills of extension agents and farmers; (iii) adoption of improved techniques by farmers; and (iv) efficiency in management services in MAAIF, in order to support the delivery of extension and ensure its sustainability. 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: Strengthening of the Delivery of Extension Services 1. Strengthening the capacity of MAAIF to deliver efficient and relevant extension services at farm level and development of appropriate management systems for the services. 2. Acquisition of vehicles, including bicycles, motor cycles and four wheel drive vehicles, and equipment for extension activities in the 16 districts. 3. Construction of a limited number of staff quarters for field staff mainly in remote areas. Part B: Improvement in Training Capacity and Skills 1. Acquisition of equipment, supplies, facilities and transport for regular in-service training of extension staff and periodic farmer training at the District Farm Institutes, with the involvement of research staff. 2. Rehabilitation, curriculum development and upgrading of staff capabilities at Bukalasa Agricultural College. 3. Demonstration of improved techniques through demonstration plots at the DFIs and farmer managed trials in their own fields. Part C: Strengthening of Management System 1. Training in management and team building for MAAIF staff at headquarters and in the sixteen districts. 2. Improvement in financial management, procurement and budgetary procedures. 3. Strengthening of monitoring and evaluation of extension activities. 4. Construction of new, and rehabilitation of existing offices. Part D: Studies 1. Carrying out a study to rationalize the training institutes and colleges of MAAIF, including curriculum development. 2. Carrying out a study on the efficiency and impact of alternate technology transfer mechanisms. 3. Design of a follow-on Project. * * * The Project is expected to be completed by December 31, 1997. Page 9 SCHEDULE 3 Procurement and Consultants' Services Section I. Procurement of Goods and Works Part A: International Competitive Bidding 1. Except as provided in Part D 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 May 1992 (the Guidelines). 2. To the extent practicable, contracts for goods shall be grouped into bid packages estimated to cost the equivalent of $100,000 or more. 3. Goods to be procured through international competitive bidding shall be exempted from pre-shipment price inspection by a third party. Part B: Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A.1 hereof, goods manufactured in Uganda may be granted a margin of preference in accordance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraphs 1 through 4 of Appendix 2 thereto. Part C: Preference for Domestic Contractors In the procurement of works in accordance with the procedures described in Part A.1 hereof, the Borrower may grant a margin of preference to domestic contractors in accordance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraph 5 of Appendix 2 thereto. Part D: Other Procurement Procedures 1. Items or groups of items for civil works and goods estimated to cost the equivalent of $100,000 or less per contract, up to an aggregate amount equivalent to $350,000, may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association. 2. Items or groups of items for goods estimated to cost the equivalent of $20,000 or less per contract, up to an aggregate amount equivalent to $200,000, may be procured under contracts awarded on the basis of comparison of price quotations obtained from at least three suppliers eligible under the Guidelines, in accordance with procedures acceptable to the Association. Part E: 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 $100,000 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 Page 10 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 evidence to be furnished pursuant to paragraph 4 of Schedule 5 to this Agreement. (c) The provisions of the preceding subparagraph (b) shall not apply to contracts on account of which withdrawals from the Credit Account are to be made on the basis of statements of expenditure. 2. The figure of 15% is hereby specified for purposes of paragraph 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 satisfactory 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. SCHEDULE 4 Implementation Program A. Project Coordination 1. The Permanent Secretary of MAAIF, assisted by the Directors of Agriculture and Animal Resources, shall be responsible for coordination and overall management of the Project. The Director of Agriculture shall be responsible for the supervision of the Extension Program, to be implemented by the Heads of the Departments of Extension, and Training and Information. 2. The Borrower shall by November 1 in each year furnish to the Association annual work programs and budgets, satisfactory to the Association, based on the cropping year. Such work programs shall include, inter alia, (a) the DAP for each district, (b) details on the training program for that year, including the names and qualifications of the proposed trainees, and details of the proposed training courses and course locations, and an evaluation of the previous year's training program, (c) details on the Research/ Extension linkage arrangements, (d) details on the Management Training Program, (e) details of the studies to be carried out during the year, and (f) details on projected expenditures by quarters, sources for funding and required flow of funds from the Borrower, with target dates for release. 3. MAAIF shall by March 31, 1993, create a Procurement Committee with representatives from the Central Tender Board, and Ministries of Finance and Economic Planning, and Justice and make appropriate arrangements for necessary clearances and approvals. MAAIF shall appoint and maintain during Project Implementation, a Procurement Specialist, with qualifications and experience satisfactory to the Association. 4. The Borrower shall appoint and maintain during Project Implementation, a Financial Officer, with qualifications, experience and terms of reference, satisfactory to the Association, to assist in the financial management of the Project and to strengthen financial capacity in MAAIF. B. Extension Organization and Management Page 11 1. The Borrower shall follow the T&V System of management of extension with respect to the organization of the extension service and the regularity of training, supervision and farmer visits. The FEW shall be the first point of contact with farmers and shall operate through contact groups of farmers. 2. MAAIF shall appoint County Extension Coordinators and District Extension Coordinators in accordance with predetermined criteria satisfactory to the Association. 3. The Department of Extension shall prepare for each new district, a district action plan, based on brief diagnostic surveys of farmer problems, including the special needs of women and youth, and details on staffing, training and coordination arrangements. 4. No DAP shall be approved in any district, unless the District Extension Coordinator and County Extension Coordinators have been appointed. 5. The Borrower shall appoint an Extension Adviser, with qualifications, experience and terms of reference, satisfactory to the Association, to assist in the design and implementation of the extension program. C. Research/Extension Linkages 1. The Borrower shall hold pre-seasonal workshops of SMSs at designated research centers and DFIs. 2. The Borrower shall make MAAIF's Directors of Agriculture and Animal Resources members of the Board of NARO, once NARO's Board is constituted. 3. The Borrower shall by March 31, 1993, establish a Research Extension Linkage Committee, whose membership shall include the Directors of Agriculture and Animal Resources and relevant Department Heads in MAAIF, Heads of the NARO research centers, and Deans of the Faculties of Agriculture and Veterinary Medicine at Makerere University. D. Monitoring and Evaluation The M&E Unit shall be located within the Planning Department of MAAIF. The M&E Unit shall be headed by a senior officer, assisted by a deputy and two support staff. The M&E Unit shall, inter alia, be responsible for current operational information on the extension program, as well as the evaluation of the impact of the program. In addition the M&E Unit shall conduct an Impact and Evaluation Survey at the end of each season. E. Training and Management 1. The Principals of each of the DFIs shall report to the Extension Coordinator and shall: (a) arrange for monthly/ fortnightly training of the field extension staff; (b) organize periodic training programs for farmers, extension staff and staff of other departments as per agreed work program; and (c) provide the needed facilities for the implementation of the adaptive trial program. 2. MAAIF shall, by March 31, 1993, (a) enter into a Memorandum of Understanding, acceptable to the Association, with Makerere University on the scope and implementation of the curriculum development program for Bukalasa Agricultural College; and (b) determine the modalities for the admission of private students to Bukalasa Agricultural College and other agricultural colleges, and communicate details thereof to the Association. 3. The Borrower shall carry out the Management Development Program with assistance from MTAC. MAAIF shall, by March 31, 1993, enter into a Memorandum of Understanding, acceptable to the Association with MTAC for the implementation of the Program. Page 12 F. MIS The Borrower shall establish an appropriate MIS at headquarters. In addition the Borrower shall, by March 31, 1993, establish a monitoring system at headquarters to track elapsed time and bottlenecks in financial, budgetary and procurement procedures. G. Mid-Term Review 1. The Borrower and the Association shall carry out a mid-term review of the Project by March 31, 1995. In order to facilitate this review the M&E Unit shall by December 31, 1994, prepare a mid-term report on the Project. The review shall, inter alia, evaluate: (a) the effectiveness of the unified extension system; (b) depth and coverage of the extension service; (c) its impact on agricultural production and target beneficiaries; (d) progress towards increased beneficiary participation in delivery and funding of extension; (e) effectiveness of the research/extension linkages; (f) the effec- tiveness of the adaptive on-farm research trials; (g) the relative merits of the alternative extension delivery mechanisms; (h) regularity and effectiveness of frontline staff training and SMS workshops; (i) the experience of contacting farmers as groups; and (j) need, if any, for organizational changes to adjust to the decentralized management of public services. The key indicators in assessing the impact of the Project for purposes of the mid-term review would be as set out in the Annex to this Schedule. In addition, the mid-term review, shall critically examine: (A) the adequacy of Borrower support in terms of counterpart funding, particularly incremental recurrent costs; and (B) the potential and capacity to implement a full-scale national extension project. 2. Following the mid-term review, the Borrower undertakes to act promptly and diligently in order to take any corrective action deemed necessary to remedy any shortcoming noted in the imple- mentation of the Project, or to implement such other measures as may have been agreed upon between the Borrower and the Association in furtherance of the objectives of the Project. H. Actions for Women and Young Farmers The Borrower shall undertake the following initiatives: (a) diagnostic surveys in each district which would include questions on the roles, decision making patterns and technological gaps pertaining to rural women and young farmers; (b) formation of special women and youth target groups; (c) increase the number of female extension workers; (d) improve the contact and communication between extension agents and female farmers and young farmers; (e) improve the appropriateness of the messages and technology for women and young farmers; and (f) organize special training programs for rural women and youth. I. Annual Targets The Borrower shall implement the Project in accordance with the targets set out in the Annex to this Schedule. ANNEX Annual Targets for Implementation and Impact 1993 1994 1995 1996 1997 (Cumulative totals at end of period) Page 13 I. Implementation A. Extension Delivery (i) Rehabilitation 50% 100% of DFIs (%) com- pletion (ii) Field offices and 50% 100% Houses (iii) Headquarters Con- 40% 100% struction (iv) Vehicles procured 75% 100% (v) Counties covered 52 67 67 67 67 (number) (vi) Farming families 355 474 593 710 710 contacted (000) B. Training and Skills Improvement (i) Rehabilitation of 50% 100% Bukalasa (%) (ii) Lecturers trained 15 30 (number) (iii) Person days of FEW 8 10 12 12 training (annual) (000) 1993 1994 1995 1996 1997 (Cumulative totals at end of period) (iv) Person days spent 36 50 70 100 on training by research staff (annual) C. Demonstrations (i) Number of Demon- 30 60 100 100 strations at DFIs (annual) (ii) Number of Demon- 400 450 500 500 strations in farmer fields (annual) D. Management Systems (i) Number of person 220 195 170 -- days training (annual) (ii) Number of person 186 37 180 30 days for district (annual) II. Impact (i) Adopting farm 143 214 296 392 392 families (000) (ii) Number of Adopting 14 20 40 60 60 Women and Young Farmers (000) Page 14 (iii) % of re-adopting 60% 70% 80% 90% 90% families (iv) % of adopting 3% 8% 12% 15% 15% families practicing agroforestry 1993 1994 1995 1996 1997 (Cumulative totals at end of period) (v) % of families 5% 15% 20% 25% 25% agro-pastoral systems (vi) % of families in 5% 10% 15% 20% 20% diversification activities (vii) Average percentage increase in yields from basic line levels: Crops % 10% 20% 35% 50% 50% Livestock % 10% 15% 25% 35% 35% (viii) Number of fish ponds 200 600 1200 2000 established (ix) Minimum increase 8.5 9.0 9.5 10.0 10.0 in family income (current US$) SCHEDULE 5 Special Account 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (1) through (6) 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 accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount equivalent to $500,000 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 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 shall be made as follows: (a) For withdrawals of the Authorized Allocation, the Borrower shall furnish to the Association a request or requests for a deposit or deposits which do not exceed the aggregate amount of the Authorized Allocation. On the basis of such request or requests, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account such amount or amounts as the Borrower shall have requested. Page 15 (b) (i) For replenishment of the Special Account, the Borrower shall furnish to the Association requests for deposits into the Special Account at such intervals as the Association shall specify. (ii) Prior to or at the time of each such request, the Borrower shall furnish to the Association the documents and other evidence required pursuant to paragraph 4 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account such amount as the Borrower shall have requested and as shall have been shown by said documents and other evidence to have been paid 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 amounts, as shall have been justified by said documents and other evidence. 4. For each payment made by the Borrower out of the Special Account, the Borrower shall, at such time as the Association shall reasonably request, furnish to the Association such documents and other evidence showing that such payment was made exclusively for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Schedule, the Association shall not be required to make further deposits into the Special Account: (a) if, at any time, 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 Conditions and paragraph (a) of Section 2.02 of this Agreement; or (b) once the total unwithdrawn amount of the Credit allocated to the eligible Categories, less 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 equal the equivalent of twice the amount of the Authorized Allocation. 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 an expenditure or in an amount not eligible pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association: (A) provide such additional evidence as the Association may request; or (B) 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 the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association shall have determined at any time that any amount outstanding in the Special Account will not be Page 16 required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to paragraphs 6 (a), (b) and (c) of this Schedule shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions.