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CONFORMED COPY
CREDIT NUMBER 3447 UNI
Development Credit Agreement
(Community Based Poverty Reduction Project)
between
FEDERAL REPUBLIC OF NIGERIA
and
INTERNATIONAL DEVELOPMENT ASSOCIATION
Dated April 20, 2001
CREDIT NUMBER 3447 UNI
DEVELOPMENT CREDIT AGREEMENT
AGREEMENT, dated  April 20, 2001, between FEDERAL REPUBLIC OF NIGERIA (the 
Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association).
WHEREAS (A) the Borrower, having satisfied itself as to the feasibility and 
priority of the project described in Schedule 2 to this Agreement (the Project), has 
requested the Association to assist in the financing of the Project;
(B)
the Project will be carried out by Abia, Cross River, Ekiti, Kebbi, Kogi 
and Yobe States of Nigeria and such other two States as are agreed between the 
Borrower and the Association (Project States) respectively with the Borrower's 
assistance and, as part of such assistance, the Borrower will make the proceeds of the 
credit provided for in Article II of this Agreement (the Credit) available to the 
Project States, as set forth in this Agreement; 
(C)
the Borrower intends to contract from the African Development Bank (AfDB) 
a loan in an amount approximately equivalent to $27,000,000 (the AfDB Loan) to assist 
in financing the Project on terms and conditions set forth in an agreement to be 
entered into between the Borrower and AfDB (the AfDB Loan Agreement); 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 and in the agreements of even date herewith between the Association and 
Abia, Cross River, Ekiti, Kebbi, Kogi and Yobe States of Nigeria respectively (the 
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Project Agreements);
NOW THEREFORE the parties hereto hereby agree as follows:
ARTICLE I
General Conditions; Definitions
Section 1.01. The "General Conditions Applicable to Development Credit 
Agreements" of the Association, dated January 1, 1985 (as amended through October 6, 
1999), with the modifications set forth below (the General Conditions), constitute an 
integral part of this Agreement: 
(a)
a new paragraph (12) is added to Section 2.01 to read as set forth below, 
and the existing paragraphs (12) through (14) of the said Section are accordingly 
renumbered as paragraphs (13) through (15):
"12.
‘Participating Country’ means any country that the Association 
determines meets the requirements set forth in Section 11 of Resolution No. 
194 of the Board of Governors of the Association, adopted on April 8, 1999; 
and ‘Participating Countries’ means, collectively, all such countries." ; and
(b)
The second sentence of Section 5.01 is modified to read:
"Except as the Borrower and the Association shall otherwise agree, no 
withdrawals shall be made: (a) on account of expenditures in the territories 
of any country which is not a Participating Country or for goods produced in, 
or services supplied from, such territories; or (b) for the purpose of any 
payment to persons or entities, or for any import of goods, if such payment or 
import, to the knowledge of the Association, is prohibited by a decision of 
the United Nations Security Council taken under Chapter VII of the Charter of 
the 
United Nations."
Section 1.02. Unless the context otherwise requires, the several terms defined 
in the General Conditions and in the Preamble to this Agreement have the respective 
meanings therein set forth and the following additional terms have the following 
meaning:
(a)
"Beneficiary" means a community or "Communities" including a village, a 
group of villages duly represented by a community based organization, established 
pursuant to the Borrower’s  laws, which is  recipient of a Grant (as hereinafter 
defined);
(b)
"CDD" means the community-driven development approach;
(c)
"Financial Management Manual for NPC" means a manual in form and 
substance satisfactory to the Association containing, inter alia, financial management 
arrangements to be followed by NPC for the implementation of Part A of the Project;
(d)
"Financial Procedure Manual for Communities" means a manual related to 
Micro-projects in form and substance satisfactory to the Association containing, inter 
alia, financial procedures to be followed by the each State Agency for Poverty 
Reduction for the implementation of Part B of the Project;
(e)
"Grant" means a grant made or proposed to be made by an SAPR (as 
hereinafter defined) to finance a Micro-project under Part B of the Project;
(f)
"Grant Agreement" means an agreement to be entered into between a SAPR 
(as hereinafter defined) and a Beneficiary for the purpose of carrying out a 
Micro-project;
(g)
"IEC" means information, education and communication;
(h)
"LGA" means local government authorities established and operating 
pursuant to the Borrower’s Constitution dated May 29, 1999;
(i)
"Micro-project" means a specific development project financed or to be 
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financed through a Grant extended under Part B of the Project;
(j)
"Naira" means the currency of the Borrower;
(k)
"NPC" means the Borrower’s National Planning Commission;
(l)
"PIM" or "Project Implementation Manual" means each or all the Project 
Implementation  Manuals adopted by the Borrower and each of the Project States, and 
giving details of procurement and disbursement arrangements, performance indicators 
and other administrative, financial and organizational arrangements, including a 
financial management and accounting system as well as the details for the 
implementation of the Micro-projects, as shall have been agreed with the Association 
for purposes of the implementation of activities under the Project, as same may be 
amended from time to time, and such term includes any schedules to the Project 
Implementation Manual or Manuals including the Financial Procedure Manual for 
Communities and the Financial Management Manual for NPC;
(m)
"Project Agreement" means any of the agreements between the Association 
and the Project States of even date herewith, as the same may be amended from time to 
time, and such term includes all schedules and agreements supplemental to the Project 
Agreement; 
(n)
"Project Management Report" means each report prepared in accordance with 
Section 4.02 of this Agreement;
(o)
"Project Preparation Advance" means the project preparation advance 
granted by the Association to the Borrower pursuant to the letter agreement signed on 
behalf of the Association on May 24, 2000, and on behalf of the Borrower on July 5, 
2000; 
(p)
"Project State" means the States in whose territories activities under 
Part B of the Project will be carried out;
(q)
"Project States" means the following States of Nigeria, Abia, Cross 
River, Ekiti, Kebbi, Kogi, Yobe, during the first phase of the Project and any two of 
the following during the second phase of the Project, Benue, Delta, Enugu, Gombe, Osun 
or Zamfara; 
(r)
"SAPR" or "State Agency for Poverty Reduction" means any of the State 
agencies for poverty reduction, which will be carrying out project activities under 
Part B of the Project at the State level;
(s)
"Special Accounts" means the accounts referred to in Section 2.02 (b) of  
this Agreement;
(t)
"State" means any of the States of Nigeria, as provided for in the 
Borrower’s Constitution dated May 29, 1999; and
(u)
"Subsidiary Financing Agreement" means any of the agreements to be 
entered into between the Borrower and each of the Project States pursuant to Section 
3.01 (c) of this Agreement, as the same may be amended from time to time, and such 
term includes all schedules to the Subsidiary Financing Agreement.
ARTICLE II
The Credit
Section 2.01. The Association agrees to lend to the Borrower, on the terms and 
conditions set forth or referred to in the Development Credit Agreement, an amount in 
various currencies equivalent to forty-seven million Special Drawing Rights (SDR 
47,000,000).
Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit 
Account in accordance with the provisions of Schedule 1 to this Agreement for: (i) 
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; and (ii) amounts paid (or if the Association shall 
so agree, amounts to be paid) by the Borrower on account of withdrawals made for the 
benefit of a Beneficiary under a Grant, to meet the reasonable cost of goods, works 
and services required for such Micro-project and in respect of which a withdrawal from 
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the Credit Account is requested.
(b)
The Borrower may, for the purposes of the Project, open or cause to be 
opened and maintain or cause to be maintained in dollars seven special deposit 
accounts (the NPC Special Account and six Project State Special Accounts) in 
commercial banks on terms and conditions satisfactory to the Association, including 
appropriate protection against set-off, seizure or attachment. Deposits into, and 
payments out of, each respective Special Account shall be made in accordance with the 
provisions of Schedule 5 to this Agreement.
(c)
Promptly after the Effective Date, the Association shall, on behalf of 
the Borrower, withdraw from the Credit Account and pay to itself the amount required 
to repay the principal amount of the Project Preparation Advance withdrawn and 
outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn 
balance of the authorized amount of the Project Preparation Advance shall thereupon be 
canceled.
Section 2.03. The Closing Date shall be February 28, 2006, or such later date as 
the Association shall establish. The Association shall promptly notify the Borrower of 
such later date.
Section 2.04. (a) The Borrower shall pay to the Association a commitment charge 
on the principal amount of the Credit not withdrawn from time to time at a rate to be 
set by the Association as of June 30 of each year, but not to exceed the rate of 
one-half of one percent (1/2 of 1%) per annum.
(b)
The commitment charge shall accrue: (i) from the date sixty days after 
the date of this Agreement (the accrual date) to the respective dates on which amounts 
shall be withdrawn by the Borrower from the Credit Account or canceled; and (ii) at 
the rate set as of the June 30 immediately preceding the accrual date and at such 
other rates as may be set from time to time thereafter pursuant to paragraph (a) 
above. The rate set as of June 30 in each year shall be applied from the next date in 
that year specified in Section 2.06 of this Agreement.
(c)
The commitment charge shall be paid: (i) at such places as the 
Association shall reasonably request; (ii) without restrictions of any kind imposed 
by, or in the territory of, the Borrower; and (iii) in the currency specified in this 
Agreement for the purposes of Section 4.02 of the General Conditions or in such other 
eligible currency or currencies as may from time to time be designated or selected 
pursuant to the provisions of that Section.
Section 2.05. The Borrower shall pay to the Association a service charge at the 
rate of three-fourths of one percent (3/4 of 1%) per annum on the principal amount of 
the Credit withdrawn and outstanding from time to time.
Section 2.06. Commitment charges and service charges shall be payable 
semiannually on June 1 and December 1 in each year.
Section 2.07. (a)  Subject to paragraphs (b), (c) and (d) below, the Borrower 
shall repay the principal amount of the Credit in semiannual installments payable on 
each June 1 and December 1 commencing June 1, 2011 and ending December 1, 2035. Each 
installment to and including the installment payable on December 1, 2020 shall be one 
and one-fourth percent (1-1/4%) of such principal amount, and each installment 
thereafter shall be two and one-half percent (2-1/2%) of such principal amount.
(b)
Whenever: (i) the Borrower's per capita gross national product (GNP), as 
determined by the Association, shall have exceeded for three consecutive years  the 
level established annually by the Association for determining eligibility to access 
the Association's resources; and (ii) the Bank shall consider the Borrower 
creditworthy for Bank lending, the Association may, subsequent to the review and 
approval thereof by the Executive Directors of the Association and after due 
consideration by them of the development of the Borrower's economy, modify the 
repayment of installments under paragraph (a) above by: (A) requiring the Borrower to 
repay twice the amount of each such installment not yet due until the principal amount 
of the Credit shall have been repaid; and (B) requiring the Borrower to commence 
repayment of the principal amount of the Credit as of the first semiannual payment 
date referred to in paragraph (a) above falling six months or more after the date on 
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which the Association notifies the Borrower that the events set out in this paragraph 
(b) have occurred, provided, however, that there shall be a grace period of a minimum 
of five years on such repayment of principal.
(c)
If so requested by the Borrower, the Association may revise the 
modification referred to in paragraph (b) above to include, in lieu of some or all of 
the increase in the amounts of such installments, the payment of interest at an annual 
rate agreed with the Association on the principal amount of the Credit withdrawn and 
outstanding from time to time, provided that, in the judgment of the Association, such 
revision shall not change the grant element obtained under the above-mentioned 
repayment modification.
(d)
If, at any time after a modification of terms pursuant to paragraph (b) 
above, the Association determines that the Borrower's economic condition has 
deteriorated significantly, the Association may, if so requested by the Borrower, 
further modify the terms of repayment to conform to the schedule of installments as 
provided in paragraph (a) above.
Section 2.08. The currency of The United States of America is hereby specified 
for the purposes of Section 4.02 of the General Conditions.
ARTICLE III
Execution of the Project
Section 3.01. (a) The Borrower declares its commitment to the objectives of the 
Project as set forth in Schedule 2 to this Agreement, and, to this end:
(i)
shall carry out Part A of the Project with due diligence and 
efficiency and in conformity with appropriate financial, 
administrative, environmental and community development practices, 
and shall provide, promptly as needed, the funds, facilities, 
services and other resources required for the Project; and 
(ii) 
without any limitation or restriction upon any of its other 
obligations under the Development Credit Agreement, shall cause 
each of the Project States to perform in accordance with the 
provisions of their respective Project Agreement all the 
obligations of such Project States therein set forth, shall take 
and cause to be taken all action, including the provision of 
funds, facilities, services and other resources, necessary or 
appropriate to enable such Project States to perform such 
obligations, and shall not take or permit to be taken any action 
which would prevent or interfere with such performance.
(b)
Without limitation upon the provisions of paragraph (a) of this Section 
and except as the Borrower and the Association shall otherwise agree, the Borrower 
shall carry out the Project in accordance with the Implementation Program set forth in 
Schedule 4 to this Agreement.
(c)
The Borrower shall relend the proceeds of the Credit allocated to Part B 
of the Project to the Project States under subsidiary financing agreements to be 
entered into between the Borrower and each Project State, on the same terms as this 
Agreement. 
(d)
The Borrower shall exercise its rights under the Subsidiary Financing 
Agreements in such manner as to protect the interests of the Borrower and the 
Association and to accomplish the purposes of the Credit, and, except as the 
Association shall otherwise agree, the Borrower shall not assign, amend, abrogate or 
waive any Subsidiary Financing Agreement or any provision thereof.
Section 3.02. Except as the Association shall otherwise agree, procurement of 
the goods, works and consultants’ services required for the Project and to be financed 
out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to 
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this Agreement. 
Section 3.03. For the purposes of Section 9.06 of the General Conditions and 
without limitation thereto, the Borrower shall:
(a)
prepare, on the basis of guidelines acceptable to the Association, and 
furnish to the Association not later than six (6) months after the Closing Date or 
such later date as may be agreed for this purpose between the Borrower and the 
Association, a plan for the sustainability of the Project; and
(b)
afford the Association a reasonable opportunity to exchange views with 
the Borrower on the said plan.
Section 3.04. Without limitation to its obligations under Section 3.01 of this 
Agreement, the Borrower shall:
(a)
open and thereafter maintain, until the completion of the Project, an 
account (the NPC Project Account) in Naira, in a commercial bank, on terms and 
conditions satisfactory to the Association;
(b)
promptly thereafter make an initial deposit in Naira of an amount 
equivalent to US$60,000 (Initial Deposit) into such account to finance the Borrower’s 
contribution to the Project;
(c)
thereafter deposit into the NPC Project Account by January 1 each year 
during Project implementation such amounts as shall be required and agreed upon with 
the Association to timely replenish the Project Account back to the amount of the 
initial deposit referred to in paragraph (b); and
(d)
use the funds in the NPC Project Account exclusively to finance 
expenditures under the Project.
Section 3.05.  The Borrower and the Association hereby agree that the 
obligations set forth in Sections 9.03, 9.04, 9.05, 9.06, 9.07 and 9.08 of the General 
Conditions (relating to insurance, use of goods and services, plans and schedules, 
records and reports, maintenance and land acquisition, respectively) in respect of 
Part B of the Project shall be carried out by the Project States pursuant to Section 
2.03 of the Project Agreement.
ARTICLE IV
Financial Covenants
Section 4.01. (a) The Borrower shall maintain a financial management system, 
including records and accounts, and prepare financial statements in a format 
acceptable to the Association, adequate to reflect the operations, resources and 
expenditures related to Part A of  the Project.
(b)
The Borrower shall:
(i)
have the records, accounts and financial statements referred to in 
paragraph (a) of this Section and the records and accounts for the 
Special Accounts for each fiscal year audited, in accordance with 
auditing standards acceptable to the Association, consistently 
applied, by independent auditors acceptable to the Association;
(ii)
furnish to the Association as soon as available, but in any case 
not later than six months after the end of each such year: (A) 
certified copies of the financial statements referred to in 
paragraph (a) of this Section for such year as so audited; and (B) 
an opinion on such statements, records and accounts and report of 
such audit, by the said auditors, of such scope and in such detail 
as the Association shall have reasonably requested; and
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(iii)
furnish to the Association such other information concerning such 
records and accounts, and the audit thereof, and concerning the 
said auditors, as the Association may from time to time reasonably 
request.
(c)
For all expenditures with respect to which withdrawals from the Credit 
Account were made on the basis of Project Management Reports or  statements of 
expenditure, the Borrower shall:
(i)
maintain or cause to be maintained, in accordance with paragraph 
(a) of this Section, records and separate accounts reflecting such 
expenditures;
(ii)
retain, until at least one year after the Association has received 
the audit report for the fiscal year in which the last withdrawal 
from the Credit Account was made, all records (contracts, orders, 
invoices, bills, receipts and other documents) evidencing such 
expenditures;
(iii)
enable the Association’s representatives to examine such records; 
and
(iv)
ensure that such records and accounts are included in the annual 
audit referred to in paragraph (b) of this Section and that the 
report of such audit contains a separate opinion by the said 
auditors as to whether the Project Management Reports or 
statements of expenditure submitted during such fiscal year, 
together with the procedures and internal controls involved in 
their preparation, can be relied upon to support the related 
withdrawals.
Section 4.02. (a) Without limitation upon the provisions of Section 4.01 of this 
Agreement, the Borrower shall carry out a time-bound action plan acceptable to the 
Association for the strengthening of the financial management system referred to in 
paragraph (a) of the said Section 4.01 in order to enable the Borrower, not later than 
June 30, 2002, or such later date as the Association shall agree, to prepare quarterly 
Project management reports, acceptable to the Association, each of which:
(i) 
(A) sets forth actual sources and applications of funds for the 
Project, both cumulatively and for the period covered by the said 
report, and projected sources and applications of funds for the 
Project for the six-month period following the period covered by 
the said report; and (B) shows separately expenditures financed 
out of the proceeds of the Credit during the period covered by the 
said report and expenditures proposed to be financed out of the 
proceeds of the Credit during the six-month period following the 
period covered by the said report;
(ii)
(A) describes physical progress in Project implementation, both 
cumulatively and for the period covered by the said report; and 
(B) explains variances between the actual and previously forecast 
implementation targets; and
(iii) sets forth the status of procurement under the Project and 
expenditures under contracts financed out of the proceeds of the 
Credit, as at the end of the period covered by the said report.
(b)
Upon the completion of the action plan referred to in paragraph (a) of 
this Section, the Borrower shall prepare, in accordance with guidelines acceptable to 
the Association, and furnish to the Association not later than 45 days after the end 
of each calendar quarter a Project Management Report for such period.
ARTICLE V
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Remedies of the Association
Section 5.01. Pursuant to Section 6.02 (l) of the General Conditions, the 
following additional events are specified:
(a)
Any of the Project States shall have failed to perform any of its 
obligations under its respective Project Agreement.
(b)
As a result of events which have occurred after the date of the 
Development Credit Agreement, an extraordinary situation shall have arisen which shall 
make it improbable that any of the Project States will be able to perform its 
obligations under the Project Agreement.
(c)
(i)
Subject to subparagraph (ii) of this paragraph: 
(A) 
the right of the Borrower to withdraw the proceeds of any 
loan made to the Borrower for the financing of the Project 
shall have been suspended, canceled or terminated in whole 
or in part, pursuant to the terms of the agreement providing 
therefore; or
(B) 
any such loan shall have become due and payable prior to the 
agreed maturity thereof.
(ii)
Subparagraph (i) of this paragraph shall not apply if the Borrower 
establishes to the satisfaction of the Association that: (A) such 
suspension, cancellation, termination or prematuring is not caused 
by the failure of the Borrower to perform any of its obligations 
under such agreement; and (B) adequate funds for the Project are 
available to the Borrower from other sources on terms and 
conditions consistent with the obligations of the Borrower under 
this Agreement.
Section 5.02. Pursuant to Section 7.01 (h) of the General Conditions, the 
following additional events are specified:
(a)
any events specified in paragraph (b) of Section 5.01 of this Agreement 
shall occur and shall continue for a period of 30 days after notice thereof shall have 
been given by the Association to the Borrower; and
(b)
the event specified in paragraph (c) (i) (B) of Section 5.01 of this 
Agreement shall occur, subject to the proviso of paragraph (c) (ii) of that Section.
ARTICLE VI
Effective Date; Termination
Section 6.01. 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 Subsidiary Financing Agreements for at least two Project States have 
been executed on behalf of the Borrower and such Project States; 
(b)
the Borrower has adopted the PIM, including a financial management and 
accounting system, in form and substance acceptable to the Association; 
(c)
the Borrower has appointed a Project Accountant and the Auditors referred 
to in Section 4.01 (b) of this Agreement, all under terms and conditions acceptable to 
the Association, and in accordance with the provisions of section II of Schedule 3 to 
this Agreement;
(d)
the NPC Project Account has been opened and the initial amount of 
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US$60,000 equivalent as requested in Section 3.04 of this Agreement has been 
deposited; 
(e)
two Project States have adopted their PIM in form and substance 
satisfactory to the Association; and
(f)
two Project States have opened their Project Accounts and the initial 
amount of US$60,000 equivalent as requested in Section 2.04 of the respective Project 
Agreement has been deposited.
Section 6.02. The following are specified as additional matters, within the 
meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion 
or opinions to be furnished to the Association:
(a)
that Project Agreements have been duly authorized or ratified by two 
Project States, and are legally binding upon such Project States in accordance with 
their terms; and
(b)
that Subsidiary Financing Agreements have been duly authorized or 
ratified by the Borrower and two Project States and are legally binding upon the 
Borrower and such Project States in accordance with their terms. 
Section 6.03. The date ninety (90) days after the date of this Agreement is 
hereby specified for the purposes of Section 12.04 of the General Conditions.
ARTICLE VII
Representative of the Borrower; Addresses
Section 7.01.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.
Section 7.02. The following addresses are specified for the purposes of Section 
11.01 of the General Conditions:
For the Borrower:
The Honorable Minister
Federal Ministry of Finance
P. M. B. 14
Garki, Abuja
Nigeria
Cable address:
Telex:
FEDMINFIN
21248 (ITT)
Abuja
For the Association:
International Development Association
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address:
Telex:
Facsimile:
INDEVAS
248423 (MCI) or
(202) 477-6391
Washington, D.C.
 64145 (MCI)
IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized 
representatives, have caused this Agreement to be signed in their respective names in 
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Abuja, Federal Republic of Nigeria, as of the day and year first above written.
FEDERAL REPUBLIC OF NIGERIA
By /s/ Adamu Ciroma
Authorized Representative
INTERNATIONAL DEVELOPMENT ASSOCIATION
By /s/ Mark D. Tomlinson
Acting Regional Vice President
Africa
SCHEDULE 1
Withdrawal of the Proceeds of the Credit
1.
The table below sets forth the Categories of items to be financed out of the 
proceeds of the Credit, the allocation of the amounts of the Credit to each Category 
and the percentage of expenditures for items so to be financed in each Category:
Amount of the
Credit Allocated
   % of
(Expressed in Expenditures
Category
SDR Equivalent)
to be Financed
(1)
Goods
   1,400,000
100% of foreign
expenditures and 
90% of local
expenditures
(2)
Consultants’
   2,900,000
100% of foreign
services, training,
expenditures and
workshops
90% of local
and audits
expenditures
(3)
Grants
100% of amounts
disbursed
(a)
Abia State           3,925,000
(b)
Cross River State    3,925,000
(c)
Ekiti State          3,925,000
(d)
Kebbi State          3,925,000
(e)
Kogi State           3,925,000
(f)
Yobe State           3,925,000
(4)
Operating costs
   6,500,000
80%
(5)
Refunding of
     800,000
Amount due pursuant
Project Preparation
to Section 2.02 (c) of
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Advance
this Agreement
(6)
Unallocated
  11,850,000
TOTAL
  47,000,000
2.
For the purposes of this Schedule:
(a)
the term "foreign expenditures" means expenditures in the currency of any 
country other than that of the Borrower for goods or services supplied from the 
territory of any country other than that of the Borrower; 
(b)
the term "local expenditures" means expenditures in the currency of the 
Borrower or for goods or services supplied from the territory of the Borrower; and
(c)
the term "operating costs" means the incremental operating costs arising 
under the Project on account of local contractual staff salaries, travel and other 
allowances, maintenance of buildings, office equipment and vehicles, office rental, 
materials and supplies, utilities, communications’ expenses and vehicle insurance, but 
excluding salaries of officials of the Borrower’s civil service;
3.
Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be 
made in respect of payments made for expenditures: (a) prior to the date of this 
Agreement; and (b) under Category (3) in the table in paragraph 1 above unless (i) the 
Subsidiary Financing Agreement for the Project State concerned has been executed by 
the Borrower and the Project State concerned and is binding on the Borrower and the 
Project State concerned in accordance with their terms; (ii) the Project State 
concerned has established a financial management system, satisfactory to the 
Association;  (iii) the Grants have been made in accordance with the eligibility 
criteria, procedures and terms and conditions set forth or referred to in paragraph 3 
of Schedule 1 to the respective Project Agreement; (iv) the Project State has adopted 
its PIM in form and substance satisfactory to the Association; and (v) the Project 
State has opened its Project Account and the initial amount of US$60,000 equivalent as 
requested in Section 2.04 of the respective Project Agreement has been deposited.
4.
The Association may require withdrawals from the Credit Account to be made on 
the basis of statements of expenditure for expenditures under: (a) contracts for 
goods, services provided by consulting firms and workshops not exceeding $100,000 
each; (b) contracts for consultants’ services provided by individuals, not exceeding 
$50,000 each and (c) operating costs, all under such terms and conditions as the 
Association shall specify by notice to the Borrower.
SCHEDULE 2
Description of the Project
The objectives of the Project are to (i) improve the access of the poor in the 
Borrower’s territories to social and economic infrastructure; and (ii) increase the 
availability and management of development resources at the community level.
The Project consists of the following parts, subject to such modifications 
thereof as the Borrower and the Association may agree upon from time to time to 
achieve such objectives:
Part A:
Capacity Building
1.
Strengthening the  institutional capacity of the NPC to enable it to oversee the 
implementation of the Project, through the provision of technical advisory services 
and training.
2. 
Strengthening the  institutional capacity of the NPC to  undertake  poverty 
monitoring and project development activities. 
3.
Carrying out advocacy programs for the community-driven development approach in 
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all States.
4.
Carrying out the following activities at the  State level:
(a) 
carrying out activities on capacity building and awareness raising on CDD 
for stake holders and staff at community, LGA and State level;
(b) 
monitoring of trends in poverty and the impact of State programs on 
poverty using qualitative and  quantitative techniques; and
(c) 
carrying out preparatory work towards establishing community-based 
initiatives in six additional States.
Part B:  
Community-based initiatives in Basic Social and Economic
Infrastructure
1. 
Establishment of State-level social funds in Project States to provide funding 
for community-initiated activities.
2.
Carrying out of IEC campaigns on community-based project activities.
3.
Support for community identification of needs and priorities.
4.
Soliciting, financing, supervising and evaluating Micro-projects developed and 
implemented by community-based groups.
5.
Monitoring and evaluating Micro-projects.
* * *
The Project is expected to be completed by August 31, 2005.
SCHEDULE 3
Procurement and Consultants’ Services
Section I.
Procurement of Good and Works
Part A:
General
1.
Goods and works shall be procured in accordance with: (a) the provisions of 
Section I of the "Guidelines for Procurement under IBRD Loans and IDA Credits" 
published by the Bank in January 1995 and revised in January and August 1996, 
September 1997 and January 1999 (the Guidelines); and  (b) the provisions of the 
following Parts of this Section I.
2.
In paragraphs 1.6 and 1.8 of the Guidelines, the references to "Bank member 
countries" and "member country" shall be deemed to be references, respectively, to 
"Participating Countries" and "Participating Country".
Part B:
International Competitive Bidding
1.
Except as otherwise provided in Part C of this Section, goods and works shall be 
procured under contracts awarded in accordance with the provisions of Section II of 
the Guidelines and paragraph 5 of Appendix 1 thereto.
2.
The following provisions shall apply to goods to be procured under contracts 
awarded in accordance with the provisions of paragraph 1 of this Part B.
(a)
Grouping of contracts
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To the extent practicable, contracts for goods shall be grouped in bid packages 
estimated to cost $100,000 equivalent or more each.
(b)
Preference for domestically manufactured goods
The provisions of paragraphs 2.54 and 2.55 of the Guidelines and Appendix 2 
thereto shall apply to goods manufactured in the territory of the Borrower. 
Part C:
Other Procurement Procedures
1.
National Competitive Bidding
Goods estimated to cost less than $100,000 equivalent per contract, up to an 
aggregate amount not to exceed $4,000,000 equivalent, may be procured under contracts 
awarded in accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines.
2.
National Shopping
Goods estimated to cost less than $30,000 equivalent per contract, up to an 
aggregate amount not to exceed $6,000,000 equivalent, may be procured under contracts 
awarded on the basis of national shopping procedures in accordance with the provisions 
of paragraphs 3.5 and 3.6 of the Guidelines.
3.
Force Account
Works which meet the requirements of paragraph 3.8 of the Guidelines, and 
costing $5,000 equivalent or less in the aggregate, may, with the Association's prior 
agreement, be carried out by force account in accordance with the provisions of the 
said paragraph of the Guidelines.
4.
Community Participation
Goods and works required for Part B of the Project shall be procured in 
accordance with procedures acceptable to the Association.
5.
Procurement of Works
In the case of works contract packages estimated to cost US$50,000 equivalent or 
more, but not exceeding US$500,000 equivalent, up to an aggregate amount not to exceed 
US$6,000,000 equivalent, the method of procurement to be used shall be National 
Competitive  Bidding. For individual contract packages with an estimated value of 
US$500,000 or more, the method of procurement to be used shall be International 
Competitive Bidding. 
Small works estimated to cost less than US$50,000 equivalent per contract, up to 
an aggregate amount not to exceed US$20,500,000 equivalent, may be procured under 
lump-sum, fixed-price contracts awarded on the basis of quotations obtained from three 
(3) qualified domestic contractors in response to a written invitation. The invitation 
shall include a detailed description of the works, including basic specifications, the 
required completion date, a basic form of agreement acceptable to the Association, and 
relevant drawings, where applicable. The award shall be made to the contractor who 
offers the lowest price quotation for the required work, and who has the experience 
and resources to complete the contract successfully.
Part D:
Review by the Association of Procurement Decisions
1.
Procurement Planning
Prior to the issuance of any invitations to prequalify for bidding or to bid for 
contracts, the proposed procurement plan for the Project shall be furnished to the 
Association for its review and approval, in accordance with the provisions of 
paragraph 1 of Appendix 1 to the Guidelines. Procurement of all goods and works shall 
be undertaken in accordance with such procurement plan as shall have been approved by 
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the Association, and with the provisions of the said paragraph 1.
2.
Prior Review
(a)
With respect to each contract for goods and works estimated to cost the 
equivalent of $100,000 or more, as well as the first three contract packages of NPC 
and the first three contract packages of each Project State irrespective of value for 
goods and services the procedures set forth in paragraphs 2 and 3 of Appendix 1 to the 
Guidelines shall apply.
3.
Post Review
With respect to each contract not governed by paragraph 2 of this Part, the 
procedures set forth in paragraph 4 of Appendix 1 to the Guidelines shall apply.
Section II.
Employment of Consultants
Part A:
General
1.
Consultants’ services shall be procured in accordance with: (a) the provisions 
of the Introduction and Section IV of the "Guidelines:  Selection and Employment of 
Consultants by World Bank Borrowers" published by the Association in January 1997 and 
revised in September 1997 and January 1999, subject to the modifications thereto set 
forth in paragraph 2 of this Part A (the Consultant Guidelines); and (b) the 
provisions of the following Parts of this Section II.
2.
In paragraph 1.10 of the Consultant Guidelines, the references to "Bank member 
countries" and "member country" shall be deemed to be references, respectively, to 
"Participating Countries" and "Participating Country".
Part B:
Quality- and Cost-based Selection
1.
Except as otherwise provided in Part C of this Section, consultants’ services 
shall be procured under contracts awarded in accordance with the provisions of Section 
II of the Consultant Guidelines, paragraph 3 of Appendix 1 thereto, Appendix 2 
thereto, and the provisions of paragraphs 3.13 through 3.18 thereof applicable to 
quality- and cost-based selection of consultants.
2.
The following provisions shall apply to consultants’ services to be procured 
under contracts awarded in accordance with the provisions of the preceding paragraph.  
The short list of consultants estimated to cost less than $100,000 equivalent per 
contract, may comprise entirely national consultants in accordance with the provisions 
of paragraph 2.7 of the Consultant Guidelines.
1.
Selection Based on Consultants’ Qualifications
Services estimated to cost less than $100,000 equivalent per contract may be 
procured under contracts awarded in accordance with the provisions of paragraphs 3.1 
and 3.7 of the Consultant Guidelines.
2.
Individual Consultants
Services for tasks that meet the requirements set forth in paragraph 5.1 of the 
Consultant Guidelines shall be procured under contracts awarded to individual 
consultants in accordance with the provisions of paragraphs 5.1 through 5.3 of the 
Consultant Guidelines.
Part D:
Review by the Association of the Selection of Consultants
1.
Selection Planning
Prior to the issuance to consultants of any requests for proposals, the proposed 
plan for the selection of consultants under the Project shall be furnished to the 
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Association for its review and approval, in accordance with the provisions of 
paragraph 1 of Appendix 1 to the Consultant Guidelines.  Selection of all consultants’ 
services shall be undertaken in accordance with such selection plan as shall have been 
approved by the Association, and with the provisions of the said paragraph 1.
2.
Prior Review
(a)
With respect to each contract for the employment of consulting firms 
estimated to cost the equivalent of $100,000 or more, the procedures set forth in 
paragraphs 1, 2 (other than the third subparagraph of paragraph 2(a)) and 5 of 
Appendix 1 to the Consultant Guidelines shall apply.
(b)
With respect to each contract for the employment of individual 
consultants estimated to cost the equivalent of $50,000 or more, the qualifications, 
experience, terms of reference and terms of employment of the consultants shall be 
furnished to the Association for its prior review and approval.  The contract shall be 
awarded only after the  said approval shall have been given.
3.
Post Review
With respect to each contract not governed by paragraph 2 of this Part, the 
procedures set forth in paragraph 4 of Appendix 1 to the Consultant Guidelines shall 
apply.
SCHEDULE 4
Implementation Program
1.
The Borrower shall, by December 31, 2000, appoint and thereafter maintain a 
cross-sectoral steering committee, with a membership as stipulated in the PIM, to 
coordinate Part A of the Project.  NPC shall act as its Secretariat.  The committee 
shall  meet at least quarterly.
2.
The Poverty Unit within NPC shall be responsible for the day to day 
implementation of Part A of the Project.
3.
The Borrower shall carry out Part A of the Project in accordance with the 
provisions of the PIM, and shall not amend or waive any provision thereof which, in 
the opinion of the Association, will materially or adversely affect the implementation 
of the Project.
4.
The Borrower shall:
(a)
maintain policies and procedures adequate to enable it to monitor and 
evaluate on an ongoing basis, in accordance with indicators satisfactory to the 
Association, the carrying out of the Project and the achievement of the objectives 
thereof;
(b)
prepare, under terms of reference satisfactory to the Association, and 
furnish to the Association, on or about March 31, 2003, a report integrating the 
results of the monitoring and evaluation activities performed pursuant to paragraph 
(a) of this Section, on the progress achieved in the carrying out of the Project 
during the period preceding the date of the said report and setting out the measures 
recommended to ensure the efficient carrying out of the Project and the achievement of 
the objectives thereof during the period following such date; and
(c)
review with the Association, by September 30, 2003, or such later date as 
the Association shall request, the report referred to in paragraph (b) of this 
Section, and, thereafter, take all measures required to ensure the efficient 
completion of the Project and the achievement of the objectives thereof, based on the 
conclusions and recommendations of the said report and the Association’s views on the 
matter.
SCHEDULE 5
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Special Accounts
1.
For the purposes of this Schedule:
(a)
the term "eligible Categories" means Categories (1) (2) and (4) set forth 
in the table in paragraph 1 of Schedule 1 to this Agreement for the NPC Special 
Account in respect of Part A of the Project; and Category 3 (a) for the Abia State 
Special Account, Category 3 (b) for the Cross River State Special Account, Category 3 
(c) for the Ekiti State Special Account, Category 3 (d) for the Kebbi State Special 
Account, Category 3 (e) for the Kogi State Special Account, and Category 3 (f) for the 
Yobe State Special Account, in respect of Part B of the Project;
(b)
the term "eligible expenditures" means expenditures in respect of the 
reasonable cost of goods and services required for the Project and to be financed out 
of the proceeds of the Credit allocated from time to time to the eligible Categories 
in accordance with the provisions of Schedule 1 to this Agreement; and
(c)
the term "Authorized Allocation" means an amount equivalent to US$750,000 
in respect of the NPC Special Account for Part  A of the Project; an amount equivalent 
to US$500,000 in respect of the Abia Special Account for Part B of the Project, an 
amount equivalent to US$500,000 in respect of the Cross River State Special Account 
for Part B of the Project, an amount equivalent to US$500,000 in respect of the Ekiti 
State Special Account for Part B of the Project, an amount equivalent to US$500,000 in 
respect of the Kebbi State Special Account for Part B of the Project, an amount 
equivalent to US$500,000 in respect of the Kogi State Special Account for Part B of 
the Project, and an amount equivalent to US$500,000 in respect of the Yobe State 
Special Account for Part B of the Project, to be withdrawn from the Credit Account and 
deposited into the Special Accounts pursuant to paragraph 3 (a) of this Schedule.
2.
Payments out of the respective Special Account shall be made exclusively for 
eligible expenditures in accordance with the provisions of this Schedule.
3.
After the Association has received evidence satisfactory to it that the 
respective Special Account has been duly opened, withdrawals of the Authorized 
Allocation and subsequent withdrawals to replenish the respective Special Account 
shall be made as follows:
(a)
For withdrawals of the Authorized Allocation, the Borrower shall furnish 
to the Association a request or requests for deposit into the respective Special 
Account of an amount or amounts which do not exceed the aggregate amount of the 
Authorized Allocation. On the basis of such request or requests, the Association 
shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into 
the respective Special Account such amount or amounts as the Borrower shall have 
requested.
(b)
(i)
For replenishment of the respective Special Account, the Borrower 
shall furnish to the Association requests for deposits into the 
respective Special Account at such intervals as the Association 
shall specify.
(ii)
Prior to or at the time of each such request, the Borrower shall 
furnish to the Association the documents and other evidence 
required pursuant to paragraph 4 of this Schedule for the payment 
or payments in respect of which replenishment is requested. On the 
basis of each such request, the Association shall, on behalf of 
the Borrower, withdraw from the Credit Account and deposit into 
the respective Special Account such amount as the Borrower shall 
have requested and as shall have been shown by the said documents 
and other evidence to have been paid out of the respective Special 
Account for eligible expenditures. All such deposits shall be 
withdrawn by the Association from the Credit Account under the 
respective eligible Categories, and in the respective equivalent 
amounts, as shall have been justified by the said documents and 
other evidence.
4.
For each payment made by the Borrower out of the respective Special Account, the 
Borrower shall, at such time as the Association shall reasonably request, furnish to 
Page  17
the Association such documents and other evidence showing that such payment was made 
exclusively for eligible expenditures.
5.
Notwithstanding the provisions of paragraph 3 of this Schedule, the Association 
shall not be required to make further deposits into any Special Account:
(a)
if, at any time, the Association shall have determined that all further 
withdrawals should be made by the Borrower directly from the Credit Account in 
accordance with the provisions of Article V of the General Conditions and paragraph 
(a) of Section 2.02 of this Agreement;
(b)
if the Borrower shall have failed to furnish to the Association, within 
the period of time specified in Section 4.01 (b) (ii) of this Agreement, any of the 
audit reports required to be furnished to the Association pursuant to the said Section 
in respect of the audit of the records and accounts for the Special Accounts;
(c)
if, at any time, the Association shall have notified the Borrower of its 
intention to suspend in whole or in part the right of the Borrower to make withdrawals 
from the Credit Account pursuant to the provisions of Section 6.02 of the General 
Conditions; or
(d)
once the total unwithdrawn amount of the Credit allocated to the eligible 
Categories for the respective Special Account minus the total amount of all 
outstanding special commitments entered into by the Association pursuant to Section 
5.02 of the General Conditions with respect to the Project, shall equal the equivalent 
of twice the amount of the Authorized Allocation.
Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of 
the Credit allocated to the eligible Categories shall follow such procedures as the 
Association shall specify by notice to the Borrower. Such further withdrawals shall be 
made only after and to the extent that the Association shall have been satisfied that 
all such amounts remaining on deposit in the respective Special Account as of the date 
of such notice will be utilized in making payments for eligible expenditures.
6.
(a)
If the Association shall have determined at any time that any payment out 
of any Special Account: (i) was made for an expenditure or in an amount not eligible 
pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence 
furnished to the Association, the Borrower shall, promptly upon notice from the 
Association: (A) provide such additional evidence as the Association may request; or 
(B) deposit into the respective Special Account (or, if the Association shall so 
request, refund to the Association) an amount equal to the amount of such payment or 
the portion thereof not so eligible or justified. Unless the Association shall 
otherwise agree, no further deposit by the Association into any Special Account shall 
be made until the Borrower has provided such evidence or made such deposit or refund, 
as the case may be.
(b)
If the Association shall have determined at any time that any amount 
outstanding in any 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.
(c)
The Borrower may, upon notice to the Association, refund to the 
Association all or any portion of the funds on deposit in the Special Accounts.
(d)
Refunds to the Association made pursuant to paragraphs 6 (a), (b) and (c) 
of this Schedule shall be credited to the Credit Account for subsequent withdrawal or 
for cancellation in accordance with the relevant provisions of this Agreement, 
including the General Conditions.
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