CREDIT NUMBER 2662 CA Project Agreement (Livestock Development and Rangeland Management Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and FEDERATION NATIONALE DES ELEVEURS CENTRAFRICAINS Dated APAA \ , 1995 CREDIT NUMBER 2662 CA PROJECT AGREEMENT AGREEMENT, dated OL.AA m \ , 1995, between INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association) and FEDERATION NATIONALE DES ELEVEURS CENTRAFRICAINS (FNEC). WHEREAS (A) by the Development Credit Agreement of even date herewith between the Central African Republic (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to eleven million five hundred thousand Special Drawing Rights (SDR 11,500,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that FNEC agree to undertake such obligations toward the Association as are set forth in this Agreement; (B) by a subsidiary financing agreement to be entered into between the Borrower and Fonds Interprofessionnel de Developpement de 1'Elevage (FIDE), part of the proceeds of the credit provided for under the Development Credit Agreement will be made available to FNEC on the terms and conditions set forth in said Subsidiary Financing Agreement; WHEREAS (C) FNEC, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Unless the context otherwise requires, the several terms defined in the Development Credit Agreement, the Preamble to this Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. FNEC declares its commitment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement and, to this end, shall carry out Parts A.8, B.4 and C.3 of the Project with due diligence and efficiency and in conformity -2- with appropriate administrative, financial and technical practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for Parts A.8, B.4 and C.3 of the Project. Section 2.02. Except as the Association shall otherwise agree, procurement of the goods, works and consultants' services required for Parts A.8, B.4 and C.3 of the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to the Development Credit Agreement. Section 2.03. FNEC shall carry out 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 the Project Agreement and Parts A.8, B.4 and C.3 of the Project. Section 2.04. (a) FNEC shall,. at the request of the Association, exchange views with the Association with regard to the progress of Parts A.8, B.4 and C.3 of the Project, the performance of its obligations under this Agreement, and other matters relating to the purposes of the Credit. (b) FNEC shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of Parts A.8, B.4 and C.3 of the Project, the accomplishment of the purposes of the Credit, or the performance by FNEC of its obligations under this Agreement. Section 2.05. FNEC shall promptly submit its annual work programs and budgets to the Comite Interprofessionnel de Coordination (CIC) for its approval. Section 2.06. FNEC shall: (a) carry out, no later than December 31, 1997, jointly with the Borrower and the Association, a mid-term review of the Project which shall cover, in particular, the issues listed in Section 3.12 of the Development Credit Agreement; (b) thereafter carry out such corrective action as the Borrower and the Association shall have determined in accordance with a time schedule satisfactory to the Association; and (c) in order to facilitate this review, prepare and submit to the Association, not later than four weeks before the scheduled - 3 - date of this review, a report of activities on Parts A.8, B.4 and C.3 of the Project of such scope and in such detail as the Association shall have reasonably requested. ARTICLE III Management and Operations of FNEC Section 3.01. FNEC shall carry on its operations and conduct its affairs in accordance with sound administrative, financial, technical and environmental practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. Section 3.02. FNEC shall at all times operate and maintain its plant, equipment and other property, and from time to time, promptly as needed, make all necessary repairs and renewals thereof, all in accordance with sound technical and financial practices. Section 3.03. FNEC shall take out and maintain with responsible insurers insurance against such risks and in such amounts as shall be consistent with appropriate insurance practice. Section 3.04. FNEC shall consult the Borrower and the Association prior to any modification of its statutes. ARTICLE IV Financial Covenants Section 4.01. (a) FNEC shall maintain records and accounts adequate to reflect in accordance with sound accounting practices its operations and financial condition. (b) FNEC shall: (i) have its records, accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; -4- (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 its financial statements for such year as so audited, and (B) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records, accounts and financial statements as well as the audit thereof, as the Association shall 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 statements of expenditure, FNEC shall: (i) maintain, or cause to be maintained, in accordance with paragraph (a) of this Section, records and 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 or payment out of the Special 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 audit referred to in paragraph (b) (i) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the 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. - 5 - ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 5.02. (a) This Agreement and all obligations of the Association and of FNEC thereunder shall terminate on the earlier of the following two dates: (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) the date 10 years after the date of this Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify FNEC of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions. ARTICLE VI Miscellaneous Provisions Section 6.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall have been delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or at such other address as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: - 6- For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 197688 (TRT), Washington, D.C. 248423 (RCA), 64145 (WUI) or 82987 (FTCC) For FNEC: F6deration Nationale des Eleveurs Centrafricains B.P. 588, BANGUI R6publique Centrafricaine Section 6.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of FNEC may be taken or executed by the President of FNEC or such other person or persons as FNEC shall designate in writing, and FNEC shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 6.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. -7- IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, 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. INTERNATIONAL DEVELOPMENT ASSOCIATION By V1-1k . C.AVAVC Regional ice President Africa FEDERATION NATIONALE DES ELEVEURS CENTRAFRICAINS By Rep resenativ Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Development Association. FOR SECRETARY