Development Credit Agreement Public Disclosure Authorized

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Development Credit Agreement Public Disclosure Authorized CONFORMED COPY Public Disclosure Authorized CREDIT NUMBER 939 NEP Development Credit Agreement Public Disclosure Authorized (Second Rural Development Project) between KINGDOM OF NEPAL and Public Disclosure Authorized INTERNATIONAL DEVELOPMENT ASSOCIATION Dated August 9, 1979 Public Disclosure Authorized CREDIT NUMBER 939 NEP DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated August 9, 1979, between KINGDOM OF NEPAL (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) "PDCCC" means the Panchayat Development Central Coordi- nation Committee, established and operating pursuant to the Integrated Panchayat Development Decision of the Borrower, dated November 26, 1978 and vested with overall responsibility for coordination of planning and implementation of rural develop- ment projects within the Borrower's territory; (b) "ZCC" means the Zonal Coordinating Committee to be established pursuant to the provisions of Section 3.04 (b) of this Agreement; (c) "Project Coordinator" means the Project Coordinator to be appointed pursuant to Section 3.03 (b) of this Agreement; (d) "ADBN" means the Agricultural Development Bank Nepal, of established and operating pursuant to the Borrower's Agricultural Development Act, 1967, as amended, or any successor thereto; (e) "DDC" means the Dairy Development Corporation, estab- lished and operating pursuant to the BDrrower's Corporation Act, 1964, as amended, or any successor thezeto; -2- (f) "AIC" means the Agricultural Inputs Corporation, estab- lished and operating pursuant to the Borrower's Corporation Act, 1964, as amended, or any successor thereto; (g) "Project Area" means the area comprising the Dandeld- hura, Baitadi and Darchula Districts of the Mahakali Zone; and (h) "Project Staff" means the staff to be employed pursuant to Section 3.01 (b) (iii) of this Agreement. ARTICLE II The Credit Section 2.01. 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 equiva- lent to eleven million dollars ($11,000,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Associa- tion, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Credit. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Credit, shall be governed by the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be February 28, 1985 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 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Service charges shall be payable semiannually on March 15 and September 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each March 15 and September 15 commencing September 15, 1989, and ending March 15, 2029, each installment to and including the installment payable on March 15, 1999, to be one-half of one per cent (1/2 of 1%) 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 United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out or cause to be carried out the Project with due diligence and efficiency and in t-nformity with appropriate administrative, agricultural, engi- neering, financial, public health and educational prat-tices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Without limitation or restriction upon the provisions of paragraph (a) of this Section, the Borrower shall: (i) enter into all such arrangements, satisfactory to the Association, as shall be necessary to ensure the proper carrying out of the Parts of the Project specified herein as follows: (A) with AIC with respect to Part A (1) of the Project, (B) with ADBN with respect to Parts A (2) (a) and (b) and L (6) of the Project, and (C) with DDC with respect to Part B (4) of the Project, and shall provide the proceeds of the Credit withdrawn in respect of said Parts to AIC, ADBN and DDC, respec- tively; (ii) take and cause to be taken all action necessary or appropriate to cause and enable AIC, ADBN and DDC, respectively, to perform their activities under the Project in accordance with the arrange- ments referred to in Section 3.01 (b) (i) of this Agreement, and shall not take or permit to be taken any action which would prevent or interfere with such performance; and -4- (iii) employ, promptly as and when needed, all such additional staff satisfactory to the Association, in such capacities and numbers and with such qualifications as shall be required for the timely and efficient carrying out of the Project. Section 3.02. In order to assist the Borrower in the ma-ters set forth below, the Borrower shall employ the following experts whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association: (a) a rural development specialist, to function as an assistant to the Project Coordinator and to assist in Project planning, budgeting, and implementation and in establishing systems for Project disbursements, accounting and monitoring; (b) a civil engineer, to assist in the planning, design and implementation of work programs for buildings, bridges, and trail improvement and the construction of hill terrace irri- gation under the Project; (c) a socio-economist, to assist in the establishment and implementation of policies and procedures for monitoring the progress of the Project and for evaluating its socio-economic impact on farmers and analyzing the data collected thereunder; and (d) a training and communications officer, to assist in carrying out the training of staff and farmers under the Project and in developing programs for promoting effective communication among those participating in the carrying out of the Project or any Part thereof. Section 3.03. In order to facilitate the p oper carrying out of the Project and except as the Borrower and the Association may otherwise agree, the Borrower shall: (a) maintain PDCCC in accordance with the Integrated Panchayat Development Decision referred to in Section 1.02 (a) of this Agreement; (b) appoint a full-time Project Coordinator with qualifi- cations and experience satisfactory to the Association; and (c) establish and thereafter maintain a Zonal Coordinating Committee (ZCC) to coordinate Project implementation and monitor -5'- its progress. ZCC's membership shall include the Zonal Commis- sioner as Chairman, the Project Coordinator as Member-Secretary, and representatives from the Ministry of Works and Transport, Ministry of Food, Agriculture and Irrigation, Ministry of Forestry, Ministry of Industry and Commerce, Ministry of Land Reform, Ministry of Health, the District Panchayat Chairmen of Dandeldhura, Baitadi and Darchula Districts, the Chief District Officers of Dandeldhura, Baitadi and Darchula Districts, the District Chairmen of the Back-to-Village National Campaign Committee and representatives from ADBN and AIC. Section 3.04. (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, the Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the Project. Section 3.05. (a) The Borrower shall furnish, or cause to be furnished, to the Association, promptly upon their preparation, the plans, specifications, reports, contract documents and con- struction and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Association shall reasonably request.
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