CONFORMED COPY

CREDIT NUMBER 599 MLI Public Disclosure Authorized

Development Credit Agreement

(Third Highway Project) Public Disclosure Authorized

BETWEEN

REPUBLIC OF MALI

AND Public Disclosure Authorized

INTERNATIONAL DEVELOPMENT ASSOCIATION

DATED JANUARY 9, 1976 Public Disclosure Authorized CONFORMED COPY

CREDIT NUMBER 599 MLI

Development Credit Agreement

(Third Highway Project)

BETWEEN

REPUBLIC OF MALI

AND

INTERNATIONAL DEVELOPMENT ASSOCIATION

DATED JANUARY 9, 1976 DEVELOPMENT CREDIT AGREEMENT

AGREEMENT, dated January 9, 1976, between REPUBLIC OF MALI (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association).

ARTICLE I

General Conditions; Definitions

Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agreements of the Association being hereinafter called the General Conditions).

Section 1.02. Wherever used in this Agreement, 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) "First Highway Project" means the Project described in the Development Credit Agreement No. 197-MLI dated June 17, 1970, between the Borrower and the Association;

(b) "Second Highway Project" means the Project described in the Development Credit Agreement No. 383-MLI dated May 23, 1973, between the Borrower and the Association;

(c) "Directorate" means the National Directorate of Public Works of the Borrower's Ministry of Transport and Public Works;

(d) "Office" means the National Transport Office of the Borrower's Ministry of Transport and Public Works; and

(e) "Special Account" means the account referred to under Section 3.06 of this Agreement. 4

ARTICLE II

The Credit

Section 2.0.1. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equivalent to ten million dollars ($10,000,000).

Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule I to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Association, 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 and to be financed out of the proceeds of the Credit.

(b) Without limitation on the provisions of paragraph (a) of this Section the Association shall, promptly after the Effective Date, withdraw from the Credit Account and deposit in the Special Account an initial amount in the currency of the Borrower not exceeding $500,000 equivalent and shall thereafter, at the request of the Borrower, further withdraw from the Credit Account and deposit in the Special Account such amounts as shall be required to reimburse the Borrower for payments made out of the Special Account for expenditures for the Project eligible for financing under the Development Credit Agreement but only to the extent that the amount of any such deposit, together with any amount On deposit in the Special Account as of the date of such request, shall not exceed in the aggregate the equivalent of $500,000.

(c) Nothwithstanding the foregoing no further deposit shall be made to the Special Account and no other withdrawal shall be made from the Credit Account when the total amount theretofore withdrawn from the Credit Account pursuant to paragraphs (a) and (b) of this Section, together with the amount of any special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions shall have reached in the aggregate the equivalent of $9,500,000.

(d) The Borrower shall be entitled to withdraw from the Credit Account pursuant to the provisions of paragraph (a) of this Section the unwithdrawn amount of the Credit in excess of $9,500,000, it' and only to the extent that the Association shall have been satisfied that all payments were made by the Borrower out of the Special Account for expenditures eligible for withdrawal from the Credit Account. 5

(e) If the Association shall have determined that payments have been made by the Borrower out of the Special Account for expenditures not eligible for withdrawal from the Credit Account, the Borrower shall, upon notice from the Association, deposit in the Special Account an amount equal to the amount of such payments.

Section 2.03. Except as the Association shall otherwise agree, the goods, works and services (other than consultants' services) for the Project to be financed out of the proceeds of the Credit, shall be procured in accordance with the provisions of Schedule 4 to this Agreement.

Section 2.04. The Closing Date shall be June 30, 1979 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date.

Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of I ',) per annum on the principal amount of the Credit withdrawn and outstanding from time to time.

Section 2.06. Service charges shall be payable semi-annually on June I and December I in each year.

Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on cach June I and December 1 commencing .11.une 1, 1986, and eniding December 1, 2025, each installment to and including the installment payable on Deceiber 1, 1995 to be one-half of one per cent (1j2 of Ii) of such principal amount, and each installment thereafter to be one and one-half per cent ( 1-1 '2'; ) of such principal amount.

Section 2,08, The currency of the Republic of France is hereby specified for the purposes of Section 4.02 of' the General Conditions.

ARTICLE III

Execution of the Project

Section 3.01. The Borrower shall carry out Parts A, 13 and C of the Project through the Directorate and Part ) of' the Project through the Office, with due diligence and efficiency and in conformity witi appropriate administrative, financial and engineering practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. 6

Section 3.02. 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 and for such approximate periods of time as is provided by Schedule 3 to this Agreement, as such Schedule may be amended -om time to time by agreement between the Borrower and the Association.

Section 3.03. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods.

(b) Except as the Association shall otherwise agree, all goods and services financed out of the proceeds of the Credit shall be used exclusively for the Project until its completion.

Section 3.04. (a) The Borrower shall furnish to the Association, promptly upon their preparation, the plans, specifications, contract documents and work and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request.

(b) The Borrower: (i) shall maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Credit, and to disclose the use thereof in the Project; (ii) shall enable the Association's accredited representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents, and (iii) shall furnish to the Association all such information as the Association shall reasonably request concerning the Project, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds.

Section 3.05. (a) During the carrying out of the study referred to under Part D of the Project, the Borrower and the Association shall from time to time exchange views on the interim results of said study.

(b) The Borrower shall, on the basis of the abovementioned interim results and in accordance with the provisions of paragraph (d) of Section 4.03 of this Agreement, promptly prepare, in consultation with tlhe Association, a medium-term physical and financial plan for maintenance of its road network, including the renewal of necessary equipment. 7

(c) For the purpose of preparing the financing plan referred to in paragraph (b) of this Section and as an initial step towards performance budgeting, the Borrower shall establish or cause to be established within the accounting system of the Directorate bookkeeping arrangements which shall adequately reflect the accounts of its road maintenance operations with respect to the different categories of roads covered by said operations.

(d) After determination of the financing plan referred to in paragraph (b) of this Section, the Borrower shall review with the Association its priorities for new road investments.

Section 3.06. The Borrower shall, for purposes of execution of the Project, open a special account on terms and conditions satisfactory to the Association in a bank located in the territory of the Borrower and acceptable to the Association.

ARTICLE IV

Other Covenants

Section 4.01. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consistently maintained appropriate 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.

Section 4.02. The Borrower shall collect and record in accordance with appropriate statistical methods and procedures such data as are required to assess the technical, economic and financial aspects of the Borrower's road network for the proper planning of maintenance, improvements and extensions.

Section 4.03. (a) The Borrower shall cause its road network and its road maintenance equipment to be adequately maintained and shall cause all necessary repairs thereof to be made promptly, all in accordance with appropriate engineering and economic standards, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the foregoing.

(b) Without limitation on Section 3.01 of this Agreement and paragraph (a) of this Section, the Borrower shall ensure that the annual budgetary allocations of the Directorate shall be adequate to provide funds sufficient for the current operations of the Directorate. Such budgetary allocations shall include specific provisions for the operations of each one of the divisions of the Directorate. The 8

provision for the renewal of road maintenance equipment shall be separately stated and shall be readjusted annually to the extent required to cover the full costs of current renewals of such equipment.

(c) The Borrower shall ensure that its Road Fund, held in the Banque de Developpement du Mali, will at all times be managed pursuant to Ordonnance No. 5/CMLN of June 4, 1971; that such Fund will be utilized only for the purposes described in such Ordonnance; that the annual budgetary allocations to such Fund shall be sufficient to cover the expenditures referred to in Article 3 of such Ordonnance; and that the credits to such account provided for in Article 2 of such Ordonnance shall be promptly made in order to ensure the accomplishment of the purposes of the Road Fund.

(d) Except as the Association shall otherwise agree, the Borrower shall meet all road maintenance requirements out of the Road Fund resources before allocating funds for new road construction works.

Section 4.04. The Borrower shall take all necessary steps to ensure that the dimensions and axleloads of vehicles using the Borrower's road system are consistent with the structural and geometric design standards of the roads used. ARTICLE V Termination

Section 5.01. The date April 9 1976 is hereby specified for the purposes of Section 12.04 of the General Conditions.

Section 5.02. The obligations of the Borrower under Article IV of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date twenty years after the date of this Agreement, whichever shall be the earlier.

ARTICLE VI

Representative of the Borrower; Addresses

Section 7.01. The Minister in charge of finances of the Borrower 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 the purposes of Section 11.01 of the General Conditions: 9

For the Borrower:

Ministbre des Finances et du Commerce Bamako Republic of Mali

Cable address: Telex: MINIFINANCES 972-559 Bamako For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 or Washington, D.C. 248423

IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, 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 MALI

By /s / Mamadou Boubacar Kante Authorized Representative

INTERNATIONAL DEVELOPMENT ASSOCIATION

By /s/ Roger Chaufournier Regional Vice President Western Africa 10

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 9o of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Agricultural feeder roads betterment including:

(a) operating costs 3,000,000 75% of brigades (wages and sal- aries of local staff, equip- ment rental ex- cluding amorti- zation, supplies, materials and overhead); and (b) procurement of 400,000 75% two ferries (2) Road maintenance including:

(a) execution of 2,300,000 75% backlog main- tenance works on bituminous roads, namely, operating costs of brigades (wages and sal- aries of local staff, equip- ment rental ex- cluding amorti- zation, supplies, and materials and overhead); and 11

Amount of the Credit Allocated %oof (Expressed in Expenditures Category Dollar Equivalent) to be Financed

(b) procurement of 400,000 75% spare parts and equipment for workshops

(3) Centre de Perfectionne- inent of the Directorate in Bamako:

(a) Equipment 60,000 75% and supplies

(b) Vehicles 20,000 75%

(4) Consultants' 700,000 75% services relating to Parts A, B.1 and C of the Project

(5) Transport 400,000 75% Plan study

(6) Unallocated 2,720,000

TOTAL 10,000,000

2. The disbursement percentages have been calculated in compliance with the policy of the Association that no proceeds of the Credit shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect 12 of any item to be financed out of the proceeds of the Credit decreases or increases, the Association may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Association.

3. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made:

(a) in respect of expenditures prior to the date of this Agreement, except that withdrawals may be made in respect of Categories (1) and (4) above on account of expenditures incurred after January 1, 1975 in an aggregate amount not exceeding the equivalent of $1,100,000; and

(b) under Categories (1)(a) and (2)(a) above until the Association shall have approved the particular expenses to be financed pursuant to the request for withdrawal which shall contain a detailed description of the expenditures incurred and the corresponding work done.

4. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph I above, if the Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Association may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to another Category and which in the opinion of the Association 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 expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made.

5. If the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as, in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. 13

SCHEDULE 2

Description of the Project

The Project consists of the following:

Part A: The betterment of about 1,200 km of agricultural feeder roads in groundnut and cotton-growing areas under a three and one half year Program of Feeder-road Betterment (1975-1978), to continue and expand the program initiated under the First Highway Project. The details of the Program shall be as set forth in Exhibit 1, and the general design standards applicable thereto shall be as set forth in Exhibit lI', to this Schedule, as such Exhibits may be amended from time to time by agreement between the Borrower and the Association.

Part B: 1. Execution of backlog maintenance works on about 944 km of bituminous roads under a three year Program (1976-1978). The details of the Program shall be as set forth in Exhibit III to this Schedule, as such Exhibit may be amended from time to time by agreement between the Borrower and the Association.

2. Strengthening of the maintenance capacity of the Directorate by increasing the spare parts stock of its Highway Equipment Pool and by equipping two new subdivision workshops.

Part C: Assistance in the operation of the Directorate's Centre de Perfectionnement being established at Bamako under the Second Highway Project, including:

1. Procurement of office equipment, teaching materials and vehicles; and

2. Preparation of a training program and training of teaching staff.

Part D: Study of a country wide transport plan including the provision of related services.

The Project is expected to be completed by December 31, 1978. 14

EXHIBIT I TO SCHEDULE 2

Agricultural feeder roads included in Part A of the Project Agricultural Feeder Road Length in Kilometers A. Groundnut-growing Areas

Kita Mambiri-Kourouninkoto 60 Badingo-Madina 90 Kolokani Kolokani-Sirakorola 57 Massantola-Niokona 55 Niokona-Faladie 19 Kolokani-Sebekoro 42 Kirakorola-Niamina 71 Faladie-Drale 46 Banamba-Madina-Sako 31 Madina-Sako-Boron 26 Bamako Haute Vall6e Dialakorobougou-Tydld 48 Kangaba-Banankoro 60 Karan-Madina 25 Narena-Karan 18 Banankoro-Dioulafoundou 12 B. Cotton-growing Areas

Dioila Dioila-Massigui 30 Massigui-Kouale 66 Fana Nangola-Komankou 83 Koulikoro Santiguila-Fegou 21 Koutiala Bougoukouroula-Konina 22 Konina-Konseguela 29 Konseguela-Koutiala 40 M'Pessoba-Peguena 23 Peguena-Falo 46 Sirakele-Rte Koutiala 7 Tigui-Sanando 28 Sirakele-Dieraniana 35 Karangasso-N'Tokonasso 55 Kaledougou-Narena 55

TOTAL 1,200 15

EXHIBIT II TO SCHEDULE 2

Design Standards for the Agricultural Feeder Roads Included in Part A of the Project

Clearing Width 12 to 16 m

Roadway Width 4.3 m

Shoulders none

Laterite base thickness* 13 cm

Drainage Structure ditches, outlets and stone fords

* Estimated to be required on total length of not more than about 840 km. 16

EXHIBIT III TO SCHEDULE 2

Bituminous Roads to be Maintained Under Part B of the Project and Type of Works (length in kil-meters)

Patching and Reconstruction Patching and Single-Surface Roads into Patching Resealing Treatment Double-Surface

Bamako-Kati - 13.0 -

Bamako-ifienfala - 30.0 -

Bla-San - 65.0 37.0

Bla-Segou - 80.0 -

Bougouni-Sikasso - 199.0 113.0 2.0 Kimparana-San 41.0

Koutiala-Bla 41.0 32.0 -

Koutiala-Kimparana 59.0 - San-Mopti 45.5 141.0 - 25.5

Segou-Markala - 20.0 -

Total 186.5 580.0 150.0 27.5 17

SCHEDULE 3

Services of Consultants

1. About 52 man-months to assist the Directorate in the carrying out of Parts A and B of the Project;

2. About 33 man-months to assist the Directorate in the carrying out of Part C.2 of the Project; and

3. About 50 man-months to assist the Office in carrying out Part D of the Project. 18

SCHEDULE 4

Procurement

A. Procurement Procedures

1. One contract for the ferries will be awarded on the basis of competitive bidding advertised locally and in accordance with local procedures acceptable to the Association.

2. Contracts for fuel, bitumen and cement may be let on the basis of the Borrower's standard procurement practices for such supplies, provided that said procedures shall continue to be acceptable to the Association.

3. Spare parts and vehicles may be procured locally from licensed dealers.

4. Other items may be procured through comparative local shopping.

B. Review of Procurement Decisions by the Association

1. With respect to the contract for ferries:

(a) Prior to the award of such contract, the Borrower shall inform the Association of the name of the bidder to which it intends to award the contract and the reasons for the intended award and shall furnish to the Association, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, together with the recommendation for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsistent with this Schedule, promptly inform the Borrower and state the reasons for such determination.

(b) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked.

(c) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract.

2. With respect to each contract to be financed out of the proceeds of the Credit and not governed by the preceding paragraph, the Borrower shall furnish to the Association, promptly after its execution and prior to the submission to 19 the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract, together with such other information as the Association shall reasonably request. The Association shall, if it determines that the award of the contract was not consistent with this Schedule, promptly inform the Borrower and state the reasons for such determination.

3. With respect to each contract to be financed out of the proceeds of the Credit and referred to in paragraph 2 of Part A hereof, whenever a change occurs in the procurement procedures applicable thereto, the Borrower shall promptly inform the Association thereof and submit such changes to the Association for review and approval,