Public Disclosure Authorized Public Disclosure Authorized

CREDIT NMBER 1669 RW

Development Credit Agreement

Public Disclosure Authorized

Public Disclosure Authorized

(Gitara~a Agricultural Production and MINAGRI Institutional. Development Project) RWANDESE REPUBLIC

and

INTERNATIONAL DEVELOPMENT ASSOCIATION

Dated

2.3

,

1986

CREDIT NUMBER 1669 RW DEVELOPMENT CREDIT AGREEMENT

AGREEMENT, dated =,23 , 1986, between the RWANDESE REPUBLTC (the Borrower) and the INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS

the

Borrower,

having

satisfied

itself

feasibility and priority of the Project described in

as

to

the

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 Development 1985,

eral

Creditp Agreements" of the Association, dated January 1, with the second sentence of Section 2.03 deleted (the GenConditions), 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) "Ministry" and "MINAGRI" responsible for agriculture; (b)

"ISAR"

means

the

mean

Institute

the Borrower's Ministry

of

Agronomic

Sciences

of

Rwanda;

(c) "Special Account" means the Section 2.02 (b) of this Agreement; and

account

referred

to

in

(d) "Project Preparation Advance" means the project preparation advance (P 347) granted by the Association to the Borrower pursuant to an exchange of letters dated September 13, 1985 and November 5, 1985 between the Borrower and the Association.

-2ARTICLE II The Credit to lend to the BorSection 2.01. The Association agrees set forth or referred to in rower, on the terms and conditions amount in various currencies the Development Credit Agreement, an hundred thousand Special equivalent to eleven million seven Drawing Rights (SDR 11,700,000). may be withdrawn Section 2.02. (a) The amount of the Credit with the provisions of this from the Credit Account in accordance as such Schedule may Section and of Schedule 1 to this Agreement, between the Borrower be amended from time to time by agreement (or, if the made for expenditures Association, the and made) in respect of the Association shall so agree, to be for the Project reasonable cost of goods and services required and to be financed out described in Schedule 2 to this Agreement of the proceeds of the Credit. of the Project, The Borrower shall, for the purposes (b) the National Bank of Rwanda or another open and maintain in the Association a special banking institution acceptable to satisfactory to the account in dollars on terms and conditions the Special out og, Association. Deposits into, and payments with the provisions of Account shall be made in accordance Schedule 3 to this Agreement. the Association Promptly after the Effective Date, (c) withdraw from the Credit shall, on behalf of the Borrower, the amount required to repay the prinAccount and pay to itself Advance withdrawn and cipal amount of the Project Preparation all unpaid charges outstanding as of such date and to pay the authorized amount of the thereon. The unwithdrawn balance of be cancelled. Project Preparation Advance shall thereupon be September 30, 1991 Section 2.03. The Closing Date shall The shall establish. or such later date as the Association later such of Borrower the Association shall promptly notify date. pay to the Association Section 2.04. (a) The Borrower shall of one per cent (1/2 one-half a commitment charge at the rate of the Credit not withof of 1%) per annum on the principal amount shall accrue from charge commitment drawn from time to time. The

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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. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourtiis of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Commitment charges and service charges shall be payable semiannually on May 1 and November 1 in each year.

Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each May 1 1996, and ending November 1, and Novembedr 1 commencing May 1,

2035. Each installment to and including the installment payable on November 1, 2005, shall be one-half of one per cent (1/2 of 1%)

of

such

principal

amount,

and

each

installment

shall be one and one-half per cent (1-1/2%)

thereafter

of such principal

amount.

is

Section 2.08. The currency of the United States of America 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

the Ministry with due diligence and efficiency and in conformity with appropriate administrative, economic, financial and agricultural practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project.

of paragraph (a) (b) Without limitation upon the provisions shall carry out the Project in of this Section, the Borrower Program set forth in Schedaccordance with the Implementation from as such Schedule may be amended ule 4 to this Agreement, AssociaBorrower and the time to time by agreement between the and Budgets prepared by tion, and with the Annual Work Programs as provided in such Association the by the Borrower and approved Schedule. of funds for (c) In order to facilitate the availability Borrower shall maintain two the Project as and when needed, the one in an the National Bank of Rwanda, Project Accounts in I of the Project and the initial amount of RF 15 million for Part II of the amount of RF 5 million for Part other in an initial be replenished quarterly Project. Each such Project Account shall at all times at average in advance so as to maintain the accounts for the respective requirements levels equal to the estimated Parts of the Project for three months, shall otherwise Section 3.02. Except as the Association services consultants' and agree, procurement of the goods, works proceeds the of out financed required for the Project and to be 5 Schedule of provisions the by of the Credit shall be governed to this Agreement. that the new extenSection 3.03. The Borrower shall ensure Part I A.1 of the under sion and agricultural service organized after two years' evaluated Project: (a) be freely reviewed and by the Prcject; covered Sub-prefecture operation in the first the Associawith thereon and (b) after an exchange of views Gitarama by of Prefecture entire tion, be extended to cover the December 31, 1988. that the housing Section 3.04. The Borrower shall ensure staff of the field constructed and made available to higher-level at available made so be Ministry under Part I of the Project of maintenance of cost the rentals sufficient to cover at least than basis, annual an on such housing, but in any event not less, be collected by the rental such that and cost, 2% of investment Part I of the Project person responsible for accounting under and be used exclusively for such maintenance. that the higherSection 3.05. The Borrower shall ensure Part II of the of out level personnel assigned to the carrying and that experience Project has the necessary qualifications and

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the Association be given the opportunity to comment on the proposed terms of reference for all technical assistants to be recruited for Part II of the Project. Section 3.06. Prior to December 31, 1987, the Borrower shall evaluate the results of the activities comprising Part II of the Project and shall take all measures to strengthen the structural and operational capacity of the ministry shown to be necessary by such evaluation. The terms of reference for, and the conclusions of, such evaluation, shall be furnished to the Association for an exchange of views with the Borrower. Section 3.07. The Borrower shall cause the Ministry to prepare, as part of the information to be furnished to the Association pursuant to Section 9.01 of the General Conditions, semi-annual reports on the progress in carrying out the Project. Section 3.03. The Borrower shall establish procedures to that credits provided to extension staff for the ensure: (i) purchase of mopeds and motorcycles under Part I A of the Project be made under procedures requiring repayments to be automatically deducted and withheld from the salaries of the purchasers; and (ii) that such repayments be held by the Ministry in a bank account to -be used exclusively for the purchase of new vehicles for such staff. Section 3.09. The Borrower shall, by March 31, the Ministry to define the terms and conditions of butions of the communes to the agricultural sector.

1986, cause the contri-

Section 3.10. Promptly following the signature of this Agreement, the Borrower shall, through the Ministry, enter into arrangements satisfactory to the Association with the Office of Industrial Crops of Rwanda - Coffee (OCIR-Caf ), the Cooperative Research and Training Center, (IWACU), the Banques Populaires and the International Labor Organization or another agency satisfactory to the Association, defining the respective roles of such parties in carrying out Parts I A. and E.(2), (3) and (4) of the Project. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained separate records and accounts adequate to reflect in

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accounting practices the operations, accordance with sound of each part of the resources and expenditures, in respect the Borrower of agencies the departments or Project, of thereof. part any or responsible for carrying out the Project (b)

The Borrower shall: (i)

(a) of have the accounts referred to in paragraph Account, Special the this Section, including with audited for each fiscal year in accordance consistently principles auditing appropriate to the applied, by independent auditors acceptable Association;

(ii)

(iii)

furnish to the Association, as soon as available, after but in any case not later than six months the of copy certified the end of each such year, a such of auditors, report of such audit by said shall scope and in such detail as the Association have reasonably requested; and information furnish to the Association such other thereof audit the concerning the said accounts and from shall and said records as the Association C time to time reasonably request.

to which withdrawals (c) For all expenditures with respect out of the Special Account from the Credit Account or payments expenditure, the Borrower were made on the basis of statements of shall: (i)

(ii)

(iii)

in accordance maintain or cause to be maintained, separate with paragraph (a) of this Section, expenditures; records and accounts reflecting such Association has retain until one year after the year in received the audit report for the fiscal Credit the from disbursement which the last of the Account or, if later, the last payment out Special Account was made, all records (contracts, docuorders, invoices, bills, receipts and other ments) evidencing such expenditures; Association's the enable examine such records; and

representatives

to

-7-

(iv)

ensure that such separate accounts be included in the annual audit referred to in paragraph (b) of this Section and that the report thereof contain, in respect of such separate accounts, a separate opinion by said auditors as to whether the proceeds of the Credit withdrawn from the Credit Account or paid out of the Special Account in respect of such expenditures were used for the purposes for which they were provided. ARTICLE V Effective Date; Termination

4)

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 initial deposits into the Project Accounts have been made as specified in Section 3.01 (c) of this Agreement; (b) an*agricultural officer for the first Sub-prefecture, a promotion officer and two certified accountants, all satisfactory to the Association and employed under terms and conditions satisfactory to the Association, have been hired; and (c) the Ministry and ISAR have entered into arrangements satisfactory to the Association defining each of their roles in the adaptive research included in Part I.B of the Project. 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 the Borrower responsible for finance is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions.

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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 Economy B.P. 158 Kigali, Rwanda Telex:

Cable address:

502 MINAFFET

MINIFINECO For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C.

Telex: 440098 (ITT) 248423 (RCA) or 64145 (WUI)

IN WITNESS WHEREOF, the parties hereto, acting through their to be duly authorized representatives, have caused this Agreement signed in their respective names in the District of Columbia, above United States of America, as of the day and year first written. RWANDESE REPUBLIC

By Authorized Representative

INTERNATIONAL DEVELOPMENT ASSOCIATION

By Regional Vice President Eastern and Southern Africa

9

SCHEDULE 1 Withdrawal of the Proceeds of the Credit The table below sets forth the Categories of items to be 1. 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

Category (1)

Civil works,

% of

Expenditures to be Financed

(Exprnssed in SDR Equivalent)

70%

1,560,000

Part I of the Project

(2)

Vehicles and

100% of foreign

Equipment

expenditures and

(a)

(b)

Part I of

1,560,000

the Project, except for

)

ISAR

)

for ISAR, Part I.B of

(3)

Part II of

30,000

) ) )

650,000

)

the Project

)

Consultants' and

)

experts' services

)

(a)

Part I of

90% of local expenditures

)

the Project

(c)

)

2,650,000

)

the Project, except for

)

ISAR

)

)

(b)

for ISAR, Part I.B of the Project

150,000

) ) )

(c)

Part II of the Project, including audits

280,000

) ) )

100%

-

Category (4)

10 -

Amount of the Credit Allocated (Expressed in SDR Equivalent)

% of Expenditureto be Financed

Training (a)

Part I of the Project

530,00

) )

(b)

Part II of the Project

750,000

) )

(5)

Agricultural inputs

(6)

Operating costs (a)

Part I of the Project, other than of ISAR

(b)

of ISAR under Part I.B of the Project (excluding salaries)

80,000

500,000

30,000

(7)

Nyabarongo Study Part I.F of the Project

1,200,000

(8)

Refunding of Project Preparation Advance

900,000

(9)

Unallocated

830,000

TOTAL

11,700,000

100% of foreign exoenditures and 90% of local expenditures

100% of foreign expenditures and 90% of local expenditures

40% until SDR 330,000 has been disbursed and 20% thereaftere 40% until SDR 20,000 has been disbursed and 20% thereafter 100%

Amount due under Section 2.02 (c) of this Agreement

-

2.

11

-

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 from the Credit Account or payments out of the Special Account shall be made in respect of expenditures made prior to the date of this Agreement;

-

12

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SCHEDULE 2 Description of the Project The Project's overall objectives are to stimulate agricultural production, employment and income in Rwanda and to improve the management of the agricultural sector. The Project includes two major components: Part I, the Gitarama Agricultural Production component, designed to increase agricultural production and farmers' income in the prefecture of Gitarama, and to constitute a test for a model of agricultural services and agricultural promotion to be replicable at the national level; and Part II, the MINAGRI Institutional Development component designed to reinforce the systems, and develop the procedures and competence, necessary to improve ag7icultural sector planning and management. Specifically, the project comprises subject to such modifications thereof as Association may agree upon from time to objectives: Part I.

the following parts, the Borrower and the time to achieve such

The Gitarama Agricultural Production Component

A. Reorganization of and logistical support to the Agricultural Extension Service, including training of agents, coastruction of office space and housing, expansion of two- and four-wheeled vehicles fleet and of stocks of equipment and supplies. B. Carrying out with the participation of the Institute of Agronomic Sciences of Rwanda (ISAR) of a program of on-farm adaptive research, with a view to identifying specific technical recommendations designed to increase agricultural productivity and to increase farm income in Gitarama. C. Organization of and support to services in the Prefecture, including:

selected

agricultural

(1)

production, material;

(2)

erosion control activities;

(3)

production, quality control and sales of forest and fruit tree seedlings; and formulation of plans for communal forestry development (plans forestiers communaux); and

quality control and sale of improved plant

-

(4)

13

-

provision of animal health services (veterinary facilities and initial stock of veterinary products).

D. Carrying out by the MINAGRI of a limited program of procurement and initial sales of agricultural inputs and implements in Gitarama. E. Carrying out a program of support to institutions involved in agricultural training and 'research, the promotion and financing of agriculture, farm input supply and agro-processing and marketing in Gitarama, including: (1)

establishment and maintenance of an Investment Promotion Office and the construction of office space necessary therefor;

(2)

assistance to cooperatives and farmers' groups;

(3)

support to the Banques Populaires in Gitarama for its promotional and credit agricultural of programs activities, including the construction of necessary buildings to be put at the disposal of such Bank for a stipulated term; and

(4)

support to artisans agricultural sector.

and

private

enterprises

in

the

of Carrying out technical, economic and financial studies F. various alternatives for the development of the Nyabarongo Valley. Part II.

MINAGRI Institutional Development Component

Carrying out by the MINAGRI of a program designed to improve A. its capacity in the following areas: (1)

sector planning and project preparation;

(2)

monitoring and evaluation of projects and agricultural services;

(3)

financial accounting, projects and services;

(4)

documentation and diffusion of and other information;

management

and

control

of

technical publications

-

14

-

(5)

general administration, including personnel management, budgeting, correspondence and archives; and

(6)

computerization of operations in the Ministry.

Carrying out by the MINAGRI of B. staff.

The 1990.

Project

is

expected

to

a training program for its

be completed

by December

31,

-

15 -

SCHEDULE 3 Special Account 1.

For the purposes of this Schedule:

(a) the term "eligible Categories" means Categories (1) through (7) set forth in the table in paragraph I of Schedule 1 to this Agreement, except for Categories 2 (b), 3 (b), and 6 (b); the term "eligible expenditures" means expenditures in (b) 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 the term "Authorized Allocation" means an amount of (c) $1,000,000 to be withdrawn from the Credit 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 in0accordance with the provisions of this Schedule. After the Association has received evidence satisfactory to 3. 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 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 expenditures. All such deposits shall be withdrawn by the

-

16

-

Association from the Credit Account under the respective eligible amounts, as shall Categories, and in the respective equivalent the request for supporting evidence the by have been justified of this Schedule. such deposit furnished pursuant to paragraph 4 the Special For each payment made by the Borrower out of 4. pursuant to replenishment requests Borrower Account for which the furnish to shall Borrower the paragraph 3 (b) of this Schedule, such request, such of time the at or the Association, prior to reasonably shall Association the documents and other evidence as expenrequest, showing that such payment was made for eligible ditures. of this Notwithstanding the provisions of paragraph 3 (a) 5. be shall Account Special the into deposit Schedule, no further situations following the of either made by the Association when first arises: (i)

the Association shall have determined that all further withdrawals should 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 0

(ii)

the total unwithdrawn amount of the Credit minus the amount of any 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.

the Thereafter, withdrawal from the Credit Account of (b) such follow remaining unwithdrawn amount of the Credit shall notice to the procedures as the Association shall specify by after and only made be Borrower. Such further withdrawals shall that satisfied to the extent that the Association shall have been as Account Special the all such amounts remaining on deposit in payments making of the date of such notice will be utilized in for eligible expenditures. (a) If the Association shall have determined at any time 6. that any payment out of the Special Account (i) was made for any expenditure or in any amount not eligible pursuant to paragraph 2 was not justified by the evidence of this Schedule, or (ii) furnished pursuant to paragraph 4 of this Schedule, the Borrower

-

17 -

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. 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.

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SCHEDULE 4 Implementation Program A.

Organization and Administration

coordination The Borrower shall carry out the administrative Secr tariatthe through of the implementation of the Project adminisand coordination day G n ral of the Ministry. Day to fonctionnaire a to tration of activities shall be delegated the Project: (a) the dirigeant for each of Parts I and II of Agricultural Ministry's Director of Agricultural Promotion in the Agricultural Gitarama the I, Production Directorate for Part of Studies and PlanProduction Component; and (b) the Director Institutional MINAGRI the ning (DEP) of the Ministry for Part II, of the implementation Development Compe ent. The management and two Parts shall rEnain separated: (1)

(2)

ComPart I: The Gitarama Agricultural Production activiout carrying ponent. The responsibilitie- for MINAGRI's ties under this component si 11 remain with fecture Pr Gitarama organizational structure; at the responshave shall level, the Prefectorial Coordinator of the ibility for managing the various services represenof composed Ministry. A Management Committee Ministries tatives of the MINAGRI and including the the planning, and responsible for finance, economy the by headed Pr fecture and the Sub-pr fectures and meet shall Director of this Part of the Project, issues. Part regularly to review progess and discuss in the research I.B of the Project (program of adaptive the by out Gitarama pr fecture) shall be carried of Sciences Ministry and the Institute of Agronomic be to Rwanda (ISAR) in accordance with work programs agreed upon annually between them. ComPart II: The MINAGRI Institutional Development and A II (Parts component this under ponent. Activities by managed and out carried be shall B of the Project) the Ministry's organizational structure. The Director for of Studies and Planning shall have responsibility under the coordination and administration of activities subsequent and preparation coordinate Project. He shall activities monitoring of the annual work plan for such reports. periodic appropriate and preparation of

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B.

Annual Work Programs and Budgets

Annual work programs and budgets shall be prepared for each component of the Project. They shall detail the objectives and targets of the component for the year in question, the specific activities to be carried out and the required human and financial resources. Annual work programs shall include the following: (a) a brief evaluation of the previous year's performance as compared to objectives and a comparison of results obtained and how they are related to the new program; (b) detailed investment and operating budgets; (c) a description of the program of activities including quantified implementation objectives, output performance and project impact indicators where appropriate; (d) staffing and training plans with a statement of specific objectives; (e) a financing plan; and (f) a procurement plan. Annual work programs shall be approved by the Minister responsible for agriculture by October 31 of each year and shall be submitted to the Association for approval.

1

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20

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SCHEDULE 5 Procurement and Consultants' Services Procurement of Goods and Works

Section I. Part 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 May 1985 (the Guidelines). Part B.

Other Procuarement Procedures

1. Contracts for the purchase of equipment, vehicles and agricultural inputs estimated to cost the equivalent of less than $100,000, as well as all contracts for civil works, may be procured under local competitive bidding procedures as described in paragraph 3.3 of the Guidelines. 2. Contracts for the purchase of equipment estimated to cost the equivalent of less than $50,000 may be procured on the bas s of the lowest of at least three competing Oquotations, as described in paragaph 3.4 of the Guidelines. 3. Contracts estimated at less than $1,000 negotiated directly with suppliers. Part C.

equivalent may be

Review by the Association of Procurement Decisions

With respect to each contract for civil works estimated to 1. cost the equivalent of $100,000 or more and each contract for the purchase of goods 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. 2. ing

With respect to each contract not governed by the precedparagraph, the procedures set forth in paragraphs 3 and

9

- 21 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 3 to this Agreement. 3. 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 or payment out of the Special Account on the basis of statements of expenditure. Such contracts shall be retained in accordance with Section 4.01 (c) (ii) of this Agreement. 4. The figure of 15% is hereby specified for purposes of paragraph 4 of Appendix 1 to the Guidelines. Section II.

Employment of Consultants

In carrying out of the Project, the Borrower shall employ consultants and experts, 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.

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. In witness whereof I have signed this Certificate and affixed the Seal of the Association thereunto the 2 1 A day of

198 1.

FOR SECRETARY

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