SPECIAL ACTION CREDIT NUMBER 53 SL

OffICIAL

DOCUMENS

Special Action Credit Agreement(Integrated Agricultural Development Project II)

between

SIERRA LEONE

and

INTERNATIONAL DEVELOPMENT ASSOCIATIONas ADMINISTRATOR of the SPECIAL ACTION ACCOUNT

established with funds contributed bythe MEMBER STATES of the EUROPEAN ECONOMIC COMMUNITY

Dated 30 , 1980

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SPECIAL ACTION CREDIT AGREEMENT

AGREEMENT, dated A"X 30 , 1980, betweenSIERRA LEONE (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCI-ATION as ADMINISTRATOR of the Special Action Account establishedwith funds contributed by the MEMBER STATES of the EUROPEANECONOMIC COMMUNITY.

WHEREAS (A) by the Agreement, dated May 2, 1978, between theInternational Development Association (hereinafter called IDA) andthe European Economic Community and its Member States there hasbeen established by IDA a Special Action Account constitutedby the funds which shall be contributed by the Member States ofthe European Economic Community and administered by IDA, acting asAdministrator of such Special Action Account, for the purpose of,and in accordance with, the provisions of said Agreement;

(B) the Borrower has requested of the Administrator assis-tance from the resources of the Special Action Account in thefinancing of a project described in Schedule 2 to this Agreementand the Administrator has determined that such assistance would bein accordance with the provisions of the Agreement of May 2, 1978referred to above;

(C) by an agreement dated July 2, 1975 (hereinafter calledthe IDA Credit Agreement) IDA agreed to make a development credit(hereinafter called the IDA Credit) to the Borrower in an aggre-gate principal amount equivalent to $5,000,000 to assist infinancing the Integrated Agricultural Development Project II onthe terms and conditions therein set forth;

(D) by an agreement dated July 2, 1975 (hereinafter calledthe Bank Loan Agreement) the International Bank for Reconstructionand Development (hereinafter called the Bank) agreed to make aloan (hereinafter called the Bank Loan) to the Borrower in anaggregate principal amount equivalent to $5,000,000 to assist infinancing the Integrated Agricultural Development Project II onthe terms and conditions therein set forth;

WHEREAS the Administrator has agreed, on the basis interalia of the foregoing, to extend the Special Action Credit to theBorrower upon the terms and conditions hereinafter set forth.

NOW THEREFORE the parties hereto hereby agree as follows:

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ARTICLE I

General Conditions; Definitions

Section 1.01. The parties to this Agreement accept all theprovisions of the General Conditions Applicable to DevelopmentCredit Agreements of the International Development Association,dated March 15, 1974, with the same force and effect as if theywere fully set forth herein, subject, however, to the followingmodifications thereof (said General Conditions Applicable toDevelopment Credit Agreements of the International DevelopmentAssociation, as so modified, being hereinafter called the GeneralConditions):

(a) the term "Association", wherever used in the GeneralConditions, means the International Development Association actingas the Administrator of the Special Action Account referred to inthe Preamble to this Special Action Credit Agreement;

(b) the terms "Development Credit Agreement" and "Credit",wherever used in the General Coiditions are amended to read"Special Action Credit Agreement" and "Special Action Credit",respectively;

(c) Sections 4.01, 4.02, 4.03, 4.04 and the second sentenceof Section 5.01 are deleted; and

(d) in Sections 6.02 and 7.01, the term "Association" shallalso include the International Development Association acting inits own capacity.

Section 1.02. Wherever used in this Agreement, unless thecontext otherwise requires, the several terms defined in theGeneral Conditions and in the Preamble to this Agreement havethe respective meanings therein set forth and the followingadditional terms have the following meanings:

(a) "Member States" means the Member States of the EuropeanEconomic Community, i.e. Belgium, Denmark, The Federal Republic ofGermany, France, Ireland, Italy, Luxembourg, The Netherlands andThe United Kingdom;

(b) "Administrator" means the International DevelopmentAssociation acting as Administrator of the Special Action Accountreferred to in the Preamble to this Special Action Credit Agree-ment;

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(c) "EAPMU" means the project unit referred to in Section3.03 (i) of this Agreement;

(d) "NAPMU" means the project unit referred to in Section3.03 (ii) of this Agreement;

(e) "PESU" means the project evaluation and services unitreferred to in Section 3.03 (iii) of this Agreement;

(f) "FFC" means the Farmer Finance Company included inPart B (2) (d) of the Project; and

(g) "Prior Credit Agreement" means the Development CreditAgreement, 323 SL, dated June 30, 1972, between the Borrowerand IDA, as amended by the IDA Credit Agreement.

ARTICLE II

The Special Action Credit

Section 2.01. The Administrator agrees to lend to the Bor-rower on the terms and conditions in the Special Action CreditAgreement set forth or referred to, the following currencyamounts:

Two million threehundred eleventhousand Belgian francs (BF2,311,000);

Two hundred eighty-eight thousand Danish kroner (DK288,000);

One million onehundred eleventhousand Deutsche marks (DM1,111,000);

One million onehundred seventy-four thousand French francs (FF1,174,000);

Two thousand sixhundred Irish pounds (IrE2,600);

One hundred thirty-six million twohundred fortythousand Italian lire (ItLl36,240,000);

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Seventy-three thou-sand Luxembourg francs (LF73,000);

Three hundred seventhousand Netherlands guilders (Dfl 307,000);

and

Two hundred eightythree thousand onehundred Pounds sterling (E283,100).

Section 2.02. (a) The proceeds of the Special Action Creditmay be withdrawn from the Credit Account in accordance with theprovisions of Schedule 1 to this Agreement, as such Schedule maybe amended from time to time by agreement between the Borrower andthe Administrator, for expenditures made (or, if the Administratorshall so agree, to be made) in respect of the reasonable cost ofgoods and services required for the Project and to be financed outof the proceeds of the Special Action Credit.

(b) Withdrawals shall be made only on account of expendi-tures: (i) in the currency of the Borrower; or (ii) for goodsproduced in, or services supplied from, (A) any of the MemberStates and (B) any developing country which is a member of theInternational Development Association and could be the recipientof a special action credit, as determined by the Administrator.

(c) Withdrawals from the Credit Account shall be made in therespective currencies in which the expenditures to be financed outof the proceeds of the Special Action Credit have been paid or arepayable or, at the option of the Administrator, in such currencyor currencies as the Administrator shall from time to time select.

Section 2.03. Except as the Administrator shall otherwiseagree, procurement of the goods and civil works to be financed outof the proceeds of the Special Action Credit shall be governed bythe provisions of Schedule 3 to this Agreement.

Section 2.04. The Closing Date shall be June 30, 1981, orsuch later date as the Administrator shall establish. The Admini-strator shall promptly notify the Borrower of such later date.

Section 2.05. (a) The Borrower shall pay to the Administratora service charge at the rate of three-fourths of one per cent (3/4

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of 1%) per annum, on each of the various currency amounts with-drawn from the Credit Account and outstanding from time to time.The amounts of service charge in various currencies so found, andadditional service charges (if any) payable pursuant to Section3.02 of the General Conditions, shall be payable in the currencyof the United Kingdom of Great Britain and Northern Ireland, or inanother currency selected by the Administrator in accordance withthe provisions of paragraph (b) of this Section, after theirconversion into such currency on the basis of exchange ratesdetermined in accordance with the provisions of Section 4.05 ofthe General Conditions.

(b) If the Administrator shall at any time determine thatthe currency so specified or selected is not freely convertible orfreely exchangeable by the International Development Associationfor currencies of other members of the International DevelopmentAssociation for the purposes of its operations, service chargesshall be payable in such other currency as the Administrator mayselect for such purposes and shall notify in writing to theBorrower, whereupon, commencing thirty days after the date of suchnotice, service charges shall be payable in such other currency.

Section 2.06. Service charges shall be payable semiannuallyon May 1 and November 1 in each year.

Section 2.07. (a) The Borrower shall repay the principalamount of the Special Action Credit in semiannual installmentspayable on each May 1 and November 1 commencing May 1, 1990 andending November 1, 2029, each installment to and including theinstallment payable on November 1, 1999, to be one-half of one percent (1/2 of 1%) of such principal amount, and each installmentthereafter to be one and one-half per cent (1-1/2%) of suchprincipal amount.

(b) Each of the installments payable pursuant to paragraph(a) of this Section shall be the aggregate of such amounts in thevarious currencies withdrawn from the Credit Account as shall befound by multiplying the total amount in each currency so with-drawn by the applicable installment percentage as specified inparagraph (a) of this Section, unless the Administrator shallotherwise specify by notice to the Borrower prior to each paymentdate for the purpose of avoiding the payment of fractional cur-rency amounts.

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(c) If withdrawal shal have been made in a currency whichthe Administrator shall have purchased with one or more othercurrencies for the purpose of such withdrawal, the portion of theSpecial Action Credit so withdrawn shall, for the purpose of

paragraph (b) of this Section, be deemed to have been withdrawn in

the currency or currencies used by the Administrator for such

purchase in the amounts of such currency or currencies so used.

(d) The Administrator will, at the request of the Borrowerand on such terms and conditions as the Administrator shalldetermine, use its best efforts to purchase any currency needed by

the Borrower for payment of principal required under this Agree-ment upon payment by the Borrower of sufficient funds therefor ina currency or currencies to be specified by the Administrator from

time to time. In purchasing the currencies required the Adminis-trator shall be acting as agent of the Borrower and the Borrowershall be deemed to have made any payment required under this

Agreement only when and to the extent that the Administrator hasreceived such payment in the currency or currencies required.

ARTICLE III

Execution of the Project

Section 3.01. The Borrower shall carry out the Project

with due diligence and efficiency and in conformity with appro-priate agricultural, financial, administrative and engineeringpractices, and shall provide, promptly as needed, the funds,

facilities, services and other resources required for the purpose.

Section 3.02. In order to assist the Borrower in the prepara-

tion of projects in its agricultural sector, the Borrower shallemploy in its Ministry of Agriculture and Forestry consultantswhose qualifications, experience and terms and conditions of

employment shall be satisfactory to the Administrator.

Section 3.03. Except as the Borrower and the Administratorshall otherwise agree, the Borrower shall, in carrying out theProject: (i) maintain within its Ministry of Agriculture and

Forestry, as the project unit for Part B of the Project, the

project unit referred to in Section 3.04 of the Prior CreditAgreement with such responsibilities, powers and staff as are

specified in Schedule 4 to this Agreement; (ii) maintain within

its Ministry of Agriculture and Forestry as the project unit for

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Part A of the Project a second project unit with such responsibi-lities, powers and staff as are specified in Schedule 4 to thisAgreement; (iii) maintain within its Ministry of Agriculture andForestry the project evaluation and services unit included in PartC (1) of the Project with such responsibilities, powers and staffas are specified in Schedule 5 to this Agreement; and (iv) main-tain project coordinating committees, with composition and func-tions to be agreed between the Borrower and the Administrator, toadvise NAPMU and EAPMU respectively on the planning and imple-mentation of Parts A and B of the Project.

Section 3.04. The Borrower shall continue to employ, uponterms and conditions and with qualifications satisfactory to theAdministrator: (i) the Project Manager, Accountant, CommercialOfficer, Extension and Training Officer, Conservation and LandDevelopment Officer, Livestock Officer and Construction Engineerof NAPMU; (ii) the Project Manager, Accountant, CommercialOfficer, Extension and Training Officer and Conservation LandDevelopment Officer of EAPMU; (iii) the Financial Controller andCommercial Services Officer of PESU; and (iv) the General Managerof the Borrower's Daru Oil Palm Company.

Section 3.05. The Borrower shall continue to employ for thepurpose of carrying out Part A of the Project, eight qualifiedprofessional officers or experienced technical officers and thirtyagricultural field assistants.

Section 3.06. (a) The Borrower undertakes to insure, ormake adequate provision for the insurance of, the imported goodsto be financed out of the proceeds of the Special Action Creditagainst hazards incident to the acquisition, transportation anddelivery thereof to the place of use or installation, and for suchinsurance any indemnity shall be payable in a currency freelyusable by the Borrower to replace or repair such goods.

(b) Except as the Administrator shall otherwise agree,the Borrower shall cause all goods and services financed out ofthe proceeds of the Special Action Credit to be used exclusivelyfor the Project.

Section 3.07. (a) The Borrower shall furnish to the Adminis-trator, promptly upon their preparation, the plans, specifica-tions, reports, contract documents and work and procurementschedules for the Project, and any material modifications thereofor additions thereto, in such detail as the Administrator shallreasonably request.

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(b) The Borrower: (i) shall maintain records and proceduresadequate to record and monitor the progress of the Project(including its cost and, where appropriate, the benefits to bederived from it), to identify the goods and services financed outof the proceeds of the Special Action Credit, and to disclosetheir use in the Project; (ii) shall enable the Administrator'saccredited representatives to visit the facilities and construc-tion sites included in the Project and to examine the goodsfinanced out of the proceeds of the Special Action Credit and anyrelevant records and documents; and (iii) shall furnish to theAdministrator at regular intervals all such information as theAdministrator shall reasonably request concerning the Project, itscost and, where appropriate, the benefits to be derived from it,the expenditure of the proceeds of the Special Action Credit andthe goods and services financed out of such proceeds.

(c) Promptly after completion of the Project, but in anyevent not later than six months after the Closing Date or suchlater date as may be agreed for this purpose between the Borrowerand the Administrator, the Borrower shall prepare and furnish tothe Administrator a report, of such scope and in such detail asthe Administrator shall reasonably request, on the execution andinitial operation of the Project, its cost and the benefitsderived and to be derived from it, the performance by the Borrowerand the Administrator of their respective obligations under the'pecial Action Credit Agreement and the accomplishment of thepurposes of the Special Action Credit.

Section 3.08. The Borrower shall take or cauce to be takenall such action as shall be necessary to acquire as and whenneeded all such land and rights in respect of land as shall berequired for carrying out the Project and shall furnish to theAdministrator, promptly after such acquisition, evidence satisfac-tory to the Administrator that such land and rights in respect of

land are available for purposes related to the Project.

ARTICLE IV

Other Covenants

Section 4.01. (a) The Borrower shall maintain or cause tobe maintained records adequate to reflect in accordance withconsistently maintained appropriate accounting practices the

operations, resources and expenditures, in respect of the Project,

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of the departments or agencies of the Borrower responsible forcarrying out the Project or any part thereof.

(b) The Borrower shall cause NAPMU, EAPMU, PESU and FFC

to: (i) have their respective accounts and financial statements(balance sheets, statements of income and expenses and relatedstatements) for each fiscal year audited, in accordance with soundauditing principles consistently applied, by independent auditorsacceptable to the Administrator; (ii) furnish to the Administratoras soon as available, but in any case not later than four monthsafter the end of each such year, (A) certified copies of theirrespective financial statements for such year as so audited and(B) the reports of such audits by said auditors, of such scopeand in such detail as the Administrator shall have reasonablyrequested; and (iii) furnish to the Administrator such otherinformation concerning their respective accounts and financialstatements and the audits thereof as the Administrator shall fromtime to time reasonably request.

ARTICLE V

Remedies of the Administrator

Section 5.01. (a) For the purposes of Section 6.02 of theGeneral Conditions, the following additional events are specifiedpursuant to paragraph (h) thereof, namely, that subject to para-graph (b) of this Section:

(i) The right of the Borrower to withdraw the proceedsof the IDA Credit or Bank Loan shall have beensuspended, cancelled or terminated in whole or inpart, pursuant to the terms of the agreementproviding therefor, -or

(ii) the IDA Credit or Bank Loan shall have become dueand payable prior to the agreed maturity thereof.

(b) Paragraph (a) of this Section suiall not apply if: (i)such suspension, cancellation, termination or prematuring is notcaused by the failure of the Borrower to perform any of itsobligations under the IDA Credit Agreement or Bank Loan Agreement;and (ii) adequate funds for the Project are available to theBorrower from other sources on terms and conditions consistentwith the obligations of the Borrower under this Agreement.

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Section 5.02. For the purposes of Section 7.01 of the

General Conditions, the following additional event is specified

pursuant to paragraph (d) thereof namely, that the event specified

in paragraph (a) (ii) of Section 5.01 of this Agreement shall

occur.

ARTICLE VI

Termination

Section 6.01. The date _ik%wau t23 &i is hereby speci-

fied for the purposes of Section 12.04 of the General Conditions.

Section 6.02. The obligations of the Borrower under ArticleIV of this Agreement shall cease and determine on the date

on which the Special Action Credit Agreement shall terminate or on

a date fifteen years after the date of this Agreement, whichevershall be the earlier.

ARTICLE VII

Representative of the Borrower; Addresses

Section 7.01. The Minister of Finance of the Borrower or such

other person or persons appointed by such Minister in writing is

designated as representative of the Borrower for the purposes of

Section 11.03 of the General Conditions.

Section 7.02. The following addresses are specified for thepurposes of Section 11.01 of the General Conditions:

For the Borrower:

The Financial SecretaryThe Ministry of FinanceFreetownSierra Leone

Cable address:

MINFINFreetown

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For the Administrator:

Administrator of the Special Action Account(International Development Association)

1818 H Street, N.W.Washington, D.C. 20433United States of America

Cable address: Telex:

INDEVAS 440098 (ITT)Washington, D.C. 248423 (RCA) or

64145 (WUI)

IN WITNESS WHEREOF, the parties hereto, acting through theirrepresentatives thereunto duly authorized, have caused this

Agreement to be signed in their respective names in the Districtof Columbia, United States of America, as of the day and yearfirst above written.

SIERRA LEONE

By I*/l4 tot&LL~ 7Ltna uAuthorized Representative

INTERNATIONAL DEVELOPMENT ASSOCIATIONas ADMINISTRATOR of the SPECIAL ACTION ACCOUNTestablished with funds contributed bythe MEMBER STATES of the EUROPEAN ECONOMIC COMMUNITY

By //(J~r6 ~j~~bf7/WuA Regional Vice President

Western Africa

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SCHEDULE 1

Withdrawals of the Proceeds of theSpecial Action Credit

1. The table below sets forth the Categories of items to be

financed out of the proceeds of the Special Action Credit, theallocation of the amounts of the Special Action Credit to eachCategory and the percentage for items so to be financed in eachCategory:

Amount of theSpecial Action Credit % ofAllocated (Expressed Expenditures

Category in Dollar Equivalents) to be Financed

(1) Vehicles, heavy 214,000plant and equip-ment

(a) directly 100% of for-imported eign expendi-

tures

(b) imported 87%but locallyprocured

(2) Small equipment 50,000and spare parts

(a) directly 100% of for-imported eign expendi-

tures

(b) imported but 70%locallyprocured

(3) Fertilizer 348,000 100% of for-eign expendi-tures

(4) Civil works for 1,000,000 70%road construc-tion

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Amount of theSpecial Action Credit % ofAllocated (Expressed Expenditures

Category in Dollar Equivalents) to be Financed

(5) Civil works 333,000 70%other thanthose includedin Category (4),local staff andsupport services,and vehicles andplant operation

(6) Farm inputs other 55,000 100% oi foreignthan fertilizer-, expenditures orincluding seeds, 70%planting mate-rials, pesti-cides, fungi-cides, herbicides,tools, hiredlabor, sprayingmachines anddrugs

TOTAL 2,000,000

2. The total dollar amount shown in the foregoing table shall beadjusted from time to time as required to reflect the aggregatedollar equivalent of the unwithdrawn currency amounts in theCredit Account; the unallocated dollar amount shall be adjustedaccordingly.

3. For the purposes of this Schedule the term "foreign expendi-tures" means expenditures in the currency of, and for goodsproduced in or services supplied from: (i) any of the MemberStates; and (ii) any developing country, other than the Borrower,which is a member of the International Development Association andcould be the recipient of a Special Action Credit, as determinedby the Administrator.

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4. The disbursement percentages have been calculated in com-pliance with the policy of the Administrator that no proceedsof the Special Action Credit shall be disbursed on account ofpayments for taxes levied by, or in the territory of, the Borroweron goods or services, or on the importation, manufacture, procure-ment or supply thereof; to that end, if the amount of any suchtaxes levied on or in respect of any item to be financed out ofthe proceeds of the Special Action Credit decreases or increases,the Administrator may, by notice to the Borrower, increase ordecrease the disbursement percentage then applicable to such itemas required to be consistent with the aforementioned policy of theAdministrator.

5. Notwithstanding the provisions of paragraph 1 above, nowithdrawals shall be made in respect of payments made for: (i)expenditures prior to the date of this Agreement; or (ii) expendi-tures in respect of Category (4) prior to agreement being reachedbetween the Borrower and the Administrator on the design standardsfor and classification of the roads to be constructed and includedin the Project.

6. Notwithstanding the allocation of an amount of the SpecialAction Credit or the disbursement percentages set forth in thetable in paragraph 1 above, if the Administrator has reasonablyestimated that the amount of the Special Action Credit thenallocated to any Category will be insufficient to finance theagreed percentage of all expenditures in that Category, theAdministrator may, by notice to the Borrower: (i) reallocate tosuch Category, to the extent required to meet the estimatedshortfall, proceeds of the Special Action Credit which are thenallocated to another Category and which in the opinion of theAdministrator are not needed to meet other expenditures; and (ii)if such reallocation cannot fully meet the estimated shortfall,reduce the disbursement percentage then applicable to such expen-ditures in order that further withdrawals under such Category maycontinue until all expenditures thereunder shall have been made.

7. If the Administrator shall have reasonably determined thatthe procurement of any item in any Category is inconsistent withthe procedures set forth or referred to in this Special ActionCredit Agreement, no expenditures for such item shall be financedout of the proceeds of the Special Action Credit and the Admin-istrator may, without in any way restricting or limiting any otherright, power or remedy of the Administrator under the SpecialAction Credit Agreement, by notice to the Borrower, cancel such

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currency amounts of the Special Action Credit as, in the Adminis-

trator's reasonable opinion, represent the currency amounts

which would otherwise have been eligible for withdrawal out of the

proceeds of the Special Action Credit in respect of such expendi-

tures.

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SCHEDULE 2

Description of the Project

The Project will be carried out in two areas, namely thenorthern area centered on Makeni in the northern province of theBorrower, covering about 1,300 square miles with about 14,000farming families, and the eastern area centered on Kenema in theeastern province of the Borrower, covering about 4,300 squaremiles and about 65,000 farming families. The Project consists ofthe following parts:

Part A

In the northern area:

1. Civil Works

(a) Construction and upgrading of about 225 miles of feederand crop extraction roads;

(b) construction of 300 village wells;

(c) establishment of 15 market centers;

(d) construction of a training center; and

(e) construction of houses, stores and offices.

2. Farm and Crop Development

(a) Provision of extension and related farm services,including operational staff and supporting vehicles and equipment;

(b) Provision of short- and medium-term credit upon termsand conditions described in Schedule 6 to this Agreement through arevolving credit fund for labor, pesticides, fertilizers, andimproved planting material to increase the production of about6,000 acres of inland swamp rice, about 25,000 acres of uplandrice, and about 10,000 acres of groundnuts; and

(c) Development of a seed multiplication farm.

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3. Investigations and Research

(a) Investigation of the potential for future livestockdevelopment and establishment of three cattle farms; and

(b) Researching methods of increasing wood fuel productionfor tobacco farmers.

Part B

In the eastern area:

1. Civil Works

(a) Establishment of 12 market centers;

(b) Construction of houses, stores and offices; and

(c) Construction and upgrading of about 265 miles of feederand crop extraction roads.

2. Farm and Crop Development

(a) Expansion of extension and related farm services includ-ing operational staff and supporting vehicles and equipment;

(b) Provision of short-, medium- and long-term creditupon terms and conditions described in Schedule 6 to this Agree-ment for labor, pesticides, fertilizers and improved plantingmaterial to increase the production of about 1,800 acres of inlandswamp rice and up to about 36,000 acres of upland rice, to developabout 4,200 acres of inland swamp for rice production, and toestablish about 1,000 acres of cocoa and about 1,600 acres of oilpalm;

(c) Continued development and improvement of seed multipli-cation farms; and

(d) Establishment of a Farmer Finance Company to assumethe activities of the existing revolving credit fund.

Part C

Central Support Services:

1. Establishment of and staffing of a project evaluation andservices unit to assist the Borrower's Ministry of Agriculture and

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Forestry in managing EAPMU, NAPMU and FFC and the Daru Oil PalmCompany.

2. Assistance in the preparation of projects by the Borrower'sMinistry of Agriculture and Forestry by providing consultants.

The Project is expected to be completed by December 31, 1980.

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SCHEDULE 3

Procurement

A. International Competitive Bidding

1. Subject to the eligibility restrictions set forth in Section

2.02 (b) of this Agreement and except as provided in Part D

and F hereof, goods and civil works shall be procured under

contracts awarded in accordance with procedures consistent with

those set forth in the "Guidelines for Procurement under WorldBank Loans and IDA Credits" published by the Bank in March 1977(hereinafter called the Guidelines), on the basis of international

competitive bidding as described in Part A of the Guidelines.

2. For goods and works to be procured on the basis of inter-national competitive bidding, in addition to the requirements of

paragraph 1.2 of the Guidelines, the Borrower shall prepare andforward to the Administrator as soon as possible, and in any event

not later than 60 days prior to the date of availability to the

public of the first tender or prequalification documents relatingthereto, as the case may be, a general procurement notice, in such

form and detail and containing such information as the Adminis-trator shall reasonably request; the Administrator will arrangefor the publication of such notice in order to provide timely

notification to prospective bidders of the opportunity to bid for

the goods and works in question. The Borrower shall provide thenecessary information to update such notice annually so long asany goods or works remain to be procured on the basis of interna-

tional competitive bidding.

3. For the purpose of evaluation and comparison of bids forthe supply of goods to be procured on the basis of internationalcompetitive bidding: (i) bidders shall be required to state

in their bid the c.i.f. (port of entry) price for the importedgoods, or the ex-factory price or off-the-shelf price of othergoods, offered in such bid; and (ii) customs duties and otherimport taxes levied in connection with the importation, or thesales and similar taxes levied in connection with the sale ordelivery, pursuant to the bid, of the goods shall not be takeninto account in the evaluation of the bids.

B. Preference for Domestic Manufacturers

In the procurement of goods in accordance with the procedures

described in Part A of this Schedule, goods manufactured in

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Sierra Leone may be granted a margin of preference in accordancewith, and subject to, the following provisions:

1. All bidding documents for the procurement of goods shallclearly indicate any preference which will be granted, theinformation required to establish the eligibility of a bid forsuch preference and the following methods and stages that will befollowed in the evaluation and comparison of bids.

2. After evaluation, responsive bids will be classifiedin one of the following three groups:

(1) Group A: bids offering goods manufactured inSierra Leone if the bidder shall have establishedto the satisfaction of the Borrower and tiLe Admin-istrator that the manufacturing cost of such goodsincludes a value added in Sierra Leone equal to atleast 20% of the ex-factory bid price of suchgoods.

(2) Group B: all other domestic bids.

(3) Group C: bids offering any other goods.

3. In order to determine the lowest evaluated bid of eachgroup, all evaluated bids in each group shall first be comparedamong themselves, without taking into account customs duties andother import taxes levied in connection with the importation, andsales and similar taxes levied in connection with the sale ordelivery, pursuant to the bids, of the goods. Such lowest eva-luated bids shall then be compared with each other, and if, as aresult of this comparison, a bid from group A or group B is thelowest, it shall be selected for the award.

4. If, as a result of the comparison under paragraph 3above, the lowest bid is a bid from group C, all group C bidsshall be further compared with the lowest evaluated bid fromgroup A after adding to the evaluated bid price of the importedgoods offered in each group C bid, for the purpose of this furthercomparison only, an amount equal to: (i) the amount of customsduties and other import taxes which a non-exempt importer wouldhave to pay for the importation of the goods offered in suchgroup C bid; or (ii) 15% "-f the c.i.f. bid price of such goodsif said customs duties and taxes exceed 15% of such price. Ifthe group A bid in such further comparison is the lowest, it

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shall be selected for the award; if not, the bid from group C

which as a result of the comparison under paragraph 3 is the

lowest evaluated bid shall be selected.

C. Preference for Domestic Contractors

With respect to the evaluation of bids for any contract for

civil works included under Categories (4) and (5) of the table set

forth in Schedule 1 to this Agreement and to be procured in

accordance with the procedures described in Part A of this Sched-

ule, the Borrower may grant a margin of preference of 7-1/2% to

domestic contractors, in accordance with, and subject to, the

following provisions:

1. Contractors applying for such preference shall be asked

to provide, as part of the data for qualification, such informa-

tion, including details of ownership, as shall be required to

detErmine whether, according to the classification established by

the 'orrower and accepted by the Administrator, a particular firm

or g,oup of firms qualifies for a domestic preference. The bidding

documents shall clearly indicate the preference and the method

that will be followed in the evaluation and comparison of bids to

give effect to such preference.

2. After bids have been received and reviewed by the

Borrower, responsive bids will be classified into the following

groups:

(i) bids offered by domestic contractors eligible

for preference; and

(ii) bids offered by other contractors.

For the purpose of evaluation and comparison of bids an amount

equal to 7-1/2% of the bid amount shall be added to bids received

under group (ii) above.

D. Other Procurement Procedures

(a) Individual contracts not exceeding the equivalent of

$24,000 and not exceeding in the aggregate the equivalent of

$200,000, for vehicles, plant, equipment, fertilizer, pesticides,

drugs and tools shall be let on the basis of competitive bidding

advertised locally and in accordance with procedures satisfactory

to the Administrator. Contracts for other farm inputs such as

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spraying machines and planting materials, shall be let throughcompetitive bidding advertised locally.

(b) Hired labor shall be procured through procedures accept-able to the Administrator.

(c) Contracts for the construction of buildings, houses andthe purchase of construction materials and furnishings shall belet on the basis of competitive bidding advertised locally and inaccordance with procedures satisfactory to the Administrator.

E. Review of Procurement Decisions by the Administrator

1. Review of invitations to bid and of proposed awards andfinal contracts:

With respect to all contracts referred to in paragraph 1 ofSection A of this Schedule:

(a) Before bids are invited, the Borrower shall furnishto the Administrator, for its comments, the text of the invita-tions to bid and the specifications and other bidding documents,together with a description of the advertising procedures to befollowed for the bidding, and shall make such modifications in thesaid documents or procedures as the Administrator shall reasonablyrequest. Any further modification to the bidding documents shallrequire the Administrator's concurrence before it is issued to theprospective bidders.

(b) After bids have been received and evaluated, the Bor-rower shall, before a final decision on the award is made, informthe Administrator of the name of the bidder to which it intends toaward the contract and shall furnish to the Administrator, insufficient time for its review, a detailed report on the evalua-tion and comparison of the bids received, and such other informa-tion as the Administrator shall reasonably request. The Admini-strator shall, if it determines that the intended award would beinconsistent with the Guidelines or this Schedule, promptly informthe Borrower and state the reasons for such determination.

(c) The terms and conditions of the contract shall not,without the Administrator's concurrence, materially differ fromthose on which bids were asked or prequalification invited.

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(d) Two conformed copies of the contract shall be furnishedto the Administrator promptly after its execution and prior tothe submission to the Administrator of the first application forwithdrawal of funds from the Credit Account in respect of such

contract.

2. With respect to each contract not governed by the precedingparagraph, the Borrower shall furnish to the Administrator,promptly after its execution and prior to the submission to theAdministrator of the first application for withdrawal of fundsfrom the Credit Account in respect of such contract, two conformedcopies of such contract, together with the analysis of therespective bids, recommendations for award and such other inform-ation as the Administrator shall reasonably request. The Adminis-trator shall, if it determines that the award of the contract wasnot consistent with the Guidelines of this Schedule, promptlyinform the Borrower and state the reasons for such determination.

F. Procurement Without Contracting

1. Construction of roads shall be carried out by force accountby the Borrower or by agreement by an agent acceptable to theAdministrator.

2. Construction of wells shall be by villagers using materialsfinanced out of the proceeds of the Special Action Credit.

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SCHEDULE 4

EAPMU and NAPMU

A. EAPMU

1. EAPMU shall consist of:

(a) the Project Manager who shall have overall responsi-bility for the direction and coordination of the work of EAPMU andshall report directly to the Permanent Secretary of the Borrower'sMinistry of Agriculture and Natural Resources;

(b) the Accountant;

(c) the Commercial Officer;

(d) the Extension and Training Officer;

(e) the Conservation and Land Development Officer; and

(f) such supporting staff as shall be necessary for theefficient operation of EAPMU.

2. EAPMU shall be responsible, and have the necessary powers,for carrying out Part B of the Project. The head office ofEAPMU shall be located at Kenema.

B. NAPMU

1. NAPMU shall consist of:

(a) the Project Manager who shall have overall responsi-bility for the direction and coordination of the work of NAPMU andshall report directly to the Permanent Secretary of the Borrower'sMinistry of Agriculture and Forestry;

(b) the Accountant;

(c) the Commercial Officer;

(d) the Extension and Training Officer;

(e) the Conservation and Land Development Officer;

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(f) the Livestock Officer;

(g) the Construction Engineer; and

(h) such supporting staff as shall be necessary for the

efficient operation of NAPMU.

3. NAPMU shall be responsible, and have the necessary powers,

for carrying out Part A of the Project.

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SCHEDULE 5

PESU

1. PESU shall consist of:

(a) the Financial Controller;

(b) the Commercial Services Officer;

(c) the Accountant; and

(d) the Projects Economist.

2. PESU would be responsible to the Permanent Secretary of theMinistry of Agriculture and Forestry of the Borrower and wouldhave the following functions:

(a) undertaking continuous project evaluation;

(b) providing EAPMU, NAPMU and other project managementunits with information relevant to decision making;

(c) establishing priorities for new projects within theagricultural sector;

(d) forward planning;

(e) training and assisting the staff of EAPMU, NAPMU andother project management units in appropriate accounting, audit-ing, stores and procurement procedures;

(f) processing reimbursement claims;

(g) auditing EAPMU, NAPMU and other project managementunits;

(h) establishing suitable credit systems for projectfarmers;

(i) developing appropriate farm input supply systems;and

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(j) carrying out any other functions as may be assigned toit by the Borrower.

3. The Financial Controller would be head of PESU and would be amember of the project advisory committee of the Borrower.

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SCHEDULE 6

Terms and Conditions for Extension of Credit

Extension of credit by the Borrower under Part A (2) (b)and Part B (2) (b) of the Project shall be in accordance with thefollowing terms and conditions:

(a) Except as the Administrator shall otherwise agree,interest rates for development loans shall be eight per cent (8%)per annum and for seasonal loans a fixed charge of ten per cent(10%) shall be made.

(b) Amortization of the principal amount lent by way ofdevelopment loans shall be in the case of oil palm over a term ofthirteen years including four years of grace, in the case of cocoaover a term of twelve years including four years of grace, and inthe case of swamp rice over a term of five years.

(c) Interest payments shall be capitalized in the caseof development loans for oil palm and cocoa.

(d) Development loans shall be made available for theestablishment of no more than ten acres of oil palm, no more thanfour acres of cocoa and no more than about three acres of swamprice, except that in the case of such loans for the establishmentof swamp rice, such loans may be made in respect of a reasonablygreater area than three acres on condition that credit is extendedto a group of farmers.

INTERNATIONAL DEVELOPMENT ASSOCIATION

CERTIFICATE

I hereby certify that the foregoing is a true

copy of the original in the archives of the Interna-

tional Development Association.

In witness whereof I have signed this Certifi-

cate and affixed the Seal of the Association

thereunto the 1-30 day of

198 .

FOR SECRETARY