Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698073463316.pdf (Guyana)
LOAN NO.

2000001704 GRANT NO.
2000001705 FINANCING AGREEMENT Hinterland Environmentally Sustainable Agricultural Development Project (Hinterland Project) between the COOPERATIVE REPUBLIC OF GUYANA and the INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT Signed in Rome, Italy on 21 March 2017 1 ~ FINANCING AGREEMENT Loan Number: 2000001704 Grant Number: 2000001705 Project Title: Hinterland Env ironmentally Sustainable Agricultural Development Project (the "Hinterland Project" or " the Project") The Cooperative Republic of.
Guyana (the "the Borrower/Recipient") and The International Fund for Agricultural Development (the "Fund" or "!FAD") (each a " Party" and both of them collectively the "Parties") HEREBY agree as follows: Section A The following documents collectively form this Agreement: this document, the 1.

Project Description and Implementation Arrangements (Schedule 1) and the Allocation Table (Schedule 2).

The Fund's General Conditions for Agricultural Development Financing dated 2.
29 Aprll 2009, amended as of April 2014, and as may be amended hereafter from time to time (the "General Conditions") are annexed to this Agreement, and all provi,sions thereof shall apply to this Agreement.

For the purposes of this Agreement the terms defined in the General Conditions shall have the meanings set forth therein.
The Fund shall provide a Loan and Grant- 3. to t he Borrower/Recipient (the "Financing"), which the Borrower/Recipient shall use to implement t he Project in accordance with the terms and conditions of this Agreement.

Section B 1.

A.

The amount of the Loan US dollars (USO 7.96 million).

is seven million nine hundred sixty tho d usan B.

The amount of (USD Q_.50 million).


the Grant is five hundred t housand us d 11 0 ars Th.e Loan is granted on blend t erms, and shall be subject to interest on the principal 2. amount outstanding at a fixed rate of 1.25 per cent and in addition .
a service charge of Q,75 per cent per annum payable semiannually in the Loan Service Payment Currency and shall have a maturity period of twenty five (25) years, including a g race period of five (5) years, starting from the date of approval by the Executive Board.

2 3.

The Loan Service Payment Currency shall be the US dollar.

4.

The first day of the applicable Fiscal Year shall be 1 January.

Payments of principal, interest and service charge shall be payable on each 5. and 15 December.
· · 15 J une There shall be a designated account denominated in US dollars opened by and h 6. in the name of the Borrower/Recipient in the Central Bank of Guyana.

This desigh ;'~ a e account shall be used exclusively for the deposit of Financing proceeds.

There shall be a Project Account opened by and held in 7.

Borrower/Recipient in a bank selected by the Borrower/Recipient.
It shall be in Guyane e Dollars and this is where resources from_}he _ Designated AccoJJnt and counterpart fun~: shall be deposited .

the name of th The Borrower/Recipient shall provide counterpart financing for th e Project In an 8. thirty thousand us dollars amount equivalent to two million (USD 2 430 000) in cash and in kind, including covering of taxes and duties In an amount equivalent to one million four hundred and eighty USO dollars (USO 1 480 000).

four hundred and \ ....

Section C 1.


The Lead Project Agency shal l be the Ministry of Agriculture.

The Project Completion Date shall be the sixth anniversary of the date of entry Into 2. force of this Agreement.

Section D 1.

The Financing will be administered and the Project supervised by the Fund.
Section E The following is designated as an additional ground for suspension of the right of 1. the Borrower/Recipient to request withdrawals from the Loan and th e Grant Accounts: ', (a) the Project Implementation Manual (PIM) referred to in pa~agraph 10 of Schedule 1 hereto, or any provision thereof, has been waived, suspended, terminated, amended or otherwise modified without the prior consent of the that such waiver, suspension, Fund, and termination, amendment or modification has had, or is likely to have, a material adverse effect on the Project.
the Fund has determined The 2. withdrawal: following are designated as additional general :conditions precedent to (a) The Project Management Unit (PMU) shall have been duly established and the recruitment of key personnel such as the Project Coordinator, a Finance Officer, Procurement Officer and M&E Officer shall have been completed; (b) The Borrower/Recipient shall have prepared a draft PIM in form and substance satisfactory to the Fund; and · (c) The Baseline study for Region 9 shall have been completed.
· ~ 3 3.

The withdrawal for expenditures related to Component 2 in Region 1: following are designated as additional specific conditions precedent to (a) The detailed value chains study for spices in Region 1 shall have been completed; (b) The SOFA study in Mabaruma and Moruca sub regions of Region 1 shall have been completed; (c) The Baseline study for Region 1 shall have been completed .
The following are the designated representatives and addresses to be used for any 3. communication related to this Agreement: l 1· r For the Borrower/Recipient: Minister of Finance Ministry of Finance 49 Main and Urquhart Streets Georgetown, Guyana For the Fund: President International Fund for Agricultural Development Via Paolo di Dono 44 00142 Rome, Italy This Agreement, dated 21 March 2017, has been prepared in the English language in two (2) original copies, one (1) for the Fund and one (1) for the the Borrower/Recipient.
COOPERATIVE REPUBLIC OF GUYANA r·· ,held ated the ' iese rnds an lars lunt nto of of id, he I 1n, a to 1e :e :e 4 \ ·-.

Schedule 1 Project Description and Implementation Arrangements I.

Project Description 1.

Project Area.

The Project will operate in Region 9 and in the Mabaruma and Mor sub-regions of Region 1.

It will foll?~ IF~D's geo~raphic targeting approach as It ~fi address the needs of the rural poor living In the ProJect area.
The beneficiaries will com from approximately 80 of the 128 existing villages and communities in Regions 1 and ; (60 communities in Region 9 and 20 communities f is sufficient time to · !=ISSist village~ communities will be used communities, and producer groups with __ the implementation.

of their Investment and Business Plans.

Considering the remoteness, vastness and low population density of the region, a phased implementation approach will be adopted for Region 9.
The Project will initially only focus on North Rupununi, so as to capitalize on current government efforts to exploit the significant agricultural potential of this sub-region.

Lessons learned from Project implementation in North Rupununi will later be applied to Central and south Rupununi.

in Region 1).

Phasing-In to ensure there · 2.

Target Population.
Target Population.

The target group includes poor indigenous and non-Indigenous rural households living in the Project area, whose livelihoods are threatened by economic and environmental risks.

The targe~ group will include 6,000 poor households receiving Project services, which is equivalent to 94 per cent of the existing poor households In the Project area .

At least 15 per· cent of these (900 households) would be female-headed households as this reflects the reality in the Project area.
The 6,000 households represent a total number of direct and indirect beneficiaries of approxima'tely.30,000 men and women of different age groups.

The Project will ensure that the most vulnerable groups have access to services and facilitating the participation of indigenous peoples, youth, and women .

At least .

75 per cent of the Project beneficiaries would be from Amerindian tribes.

At least 30 per cent would be from the age group 15-44 years old and at least 50 per cent would be women.
Due to the adoption of a phased approach, figures for the target population may be revised at the mid-term review.

investment, empowering and throLJgh Objective.

The Development Objective of the Project is "Improved livellhood 3. resilience to assets, .

improved nutrition and adaptation to climate variability".

Livelihood resilience will be strengthened by Increasing income-generating opportunities; improving access to public goods, knowledge and technologies; and enhancing food security and nutrition.
income generation, access 4.

Components.

In order to achieve Project objectives and outcomes, the Project includes two main components: (a) Strengthening of communities and producer groups' investment planning; and (b) Implementation of investments plans.

A third component will be dedicated to Project and knowledge management and coordination.

4.1.

Component 1: Strengthening of community and produc~r groups Investment planning.
The objective of this component is to ·support Village and Communl~ Counci ls (in Region 9), value chain roundtat;>les (in Region 1) and Region; for t e Development Councils development of local value chains1 and rnsilient communities and livelihoods.
Th~ expected outcome is that communities and producer groups have strengthene in planning and prioritizing investments 1 In the case of Region 1 there is significant potential for the production and marketing of species where other local eod national market, there Is a significant potential on international markets 5 - - - - - capacities to identify investment opportunities and manage economic and climat_e change risks.
The main instruments tha~ will be developed by this component are Community Production Development Plans (CPDP) for Region 9 and Value Chain Action Plans (VCAP) for Region 1.

These overall medium-term plans will be the basis for the development of three types of concrete investment plans to be Implemented with the project support: Public/Collective Investment Plans (P/CIP), Community Training Plans (CTP), and Business Plans (BP).

I 4.1.1.
I 4.1.1.

Through the IFAD grant, under Component 1 the Project will finance a SOFA study for Region 1 that builds on the methodology and approach already adopted in Region 9, Likewise, to obtain a better understanding of the spices value chains the grant .

will also finance value chain studies.


These studies will include an identification of key constraints and opportunities for the development of the value chains with the inclusion of ,Amerindian and small holder farmers including transport costs, produce volume and quality constraints compared to market demands.

In order to avoid delays in project implementation for Region 1, resources for the SOFA and the value chain studies can be anticipated by the GOG as soon as the loan agreement has been signed.
E;xpenses incurred for the SOFA study will be considered as retroactive expenses, and will therefore be the effectiveness and disbursement of the Financing Agreement are fulfilled .

in production ·and reimbursed once the conditions for 4.2.

Component 2: Implementation of jnvestment plans.

While Component 1 will provide training, studies and capacity building needed to develop investment plans, Component 2 will support their actual implementation.
Under Component 2 an Investment Fund will be established to finance, through non-reimbursable mechanisms, public and common goods and services in the following categories of Investments that may be included in the different types of investment plans: (a) investments in public and common goods and services that contribute to the reduction of climate and investment risks, included in P/CIPs; (b) services for training, related capacity-building and awareness-raising activities, and background studies, that contribute to the reduction of climate, economic and nutritional risks1 included in CTPs; (c) technical assistance and services to favor activities that have positive spillover effects on the hosting communities since they contribute to the diffusion of models, knowledge, technologies and capacities that improve the climate, economic and nutritional risks, included in BPs, livelihood resilience by reducing 4.2.1.
The administration and execution of the Investment Fund will be arranged through an agreement signed between MOA and a Financial Institution(s) with presence in the regions.

The selection of the Financial Institution(s) will be through a competitive bidding process .

The PMU will be responsible for monitoring the implementation of the Investment Fund and evaluating the performance of the Financial Institution as·well as the results achieved.

4.3.
4.3.

Component 3: Project and knowledge management and coordination.

The purpose of the third component is to establish management and administrative procedures including accounting and auditing as well as setting up monitoring and evaluation mechanisms IFAD and · national guidelines.
Specific evidence-based knowledge products will be developed on the basis of Project experiences in order to extract lessons and best practices, up-scale innovative solutions, and achieve better outcomes and greater impact from development resources.

Also, coordination and activities to link project and regional planning will be supported.

in accordance with 6 .

I .

·I !I 1 i '-,_ 1: 1: I 1111 I 111, I• l ij'I I l1 ~I II.

Implementation Arrangements 5.

The Lead Project Agency.

5 .1.

5.2.
The Lead agency for the implementation of the Hinterland Project will be the Mi its Agr~culture's S~ctor Development Unit (ASDU nlstrv of Agriculture through activities such as consultative village planning processes, agricultural tech \ For and technical assistance, natural resource management and regional Inv;~ ogles planning, the MOA would be assisted by the MIPA, MNE, MOC, MOB and ~~nt government agencies, Non-Governmental Organizations (NGOs), Community-Bo er ased Organizations (CBOs) and local educational institutes.
The Project Management Unit {_PMU) will comprise the office at the MOA 1 Georgetow~ and regi?nal offices in · Regions 1 and 9.

T_he PMU in Georgetown wl~ have a ProJect Coordinator, a Procurement Officer, a Finance Officer, and an 'M&E Officer.

The latter will be located at the M&E Unit of the MOA.

In each regional office, the Project will be supported by a Regional Project Officer (RPO) and Field Facilitators.
· The office in Region 9 will also have a Social Inclusion and Gender Specialist who w ill assist both Regional Project Officers in this particular area of expertise.

5.3.

Effective coordination with other line ministries, Regional Democratic Councils and private sector initiatives in the regions is essential to create synergies and ensure sustainability of Project results.
To this end, a National Steering Committee (NSC) and Regional Management Committees (RMC) will be established to provide policy direction and support for implementation, advise on the Annual Workplan and Budget, and encourage inter-organizational coordination and linkages.

5.4.
5.4.

The NSC is comprised of representatives from the: Ministry of Finance (MOF), Ministry of Agriculture (MOA), Ministry of Indigenous People's Affairs (MOIPA), Ministry of Natural Resources (MNR), Ministry of Business (MOB), Ministry of Public Health (MOPH), Ministry of Communities (MOC), Ministry of Social Protection (MSP), Office of Climate Change at the Ministry of th e Presidency, and two Representatives from the beneficiaries (one from Region 1 and one from Region 9).
The roles, responsibilities and composition of the NSC shall be detailed in th e PIM.

The RMCs will include, inter alia, the following representatives: (i) a regional chairman; (II} a regional representative of the Ministry of Indigenous People's Affairs; (iii) a regional representative of the MNR; (iv) a regional representative of each · NAREI (National Agricultural Research and Extension (Guyana L'lvestock Development Authority); and (v) a regional representative of the Program targeted beneficiaries.
The roles and responsibilities and composition of the RMC shall be detailed in the PIM and shall include, inter alia to: (i) support the implementation of the Program at the Regional level; (ii) support the ASDU in the implementation of the Annual Workplan; and (iii) collaborate in coordinating with local and community leaders.

Institute) or GLDA 5.5.


The Project will provide support to strengthen the capacity of the MOA M&E Unit, and ensure that Project implementation monitoring is linked to MOA performance monitoring and feeds into existing Agriculture Strategy indicators.

Monitoring and evaluation will be conducted using a participatory approach; data collection will be kept simple and not time-consuming, focusing on the reliability and usefulness of collected data .
Evidence-based knowledge products will be developed to extract lessons and best practices from project experiences, replicate innovative solutions, ·maximize outcomes and impact from development resources, and disseminate generated knowledge to support national, regional and local decision making and policy processes.

The Baseline Study will be carried out immediately after the approval of the Financing Agreement by IFAD's Executive Board and before implementation.

7 - -~-.- ------ Ananclal management.


Financial Management (FM) and Procurement of the Project II be undertaken by the ASDU, which has adequate capacity, an appropriate accounting ;tern and an extensive experience in implementing internationally funded projects.

A ,aflfied Finance Officer will be recruited through a competitive process as a condition of ;bursement from the loan and grant accounts.

, Procurement.
, Procurement.

Project procurement of goods and services will be carried out by ASDU accordance to national regulation as long as it is compatible with IFAD Project 'procurement Guidelines and , in accordance with the provisions of the financing agreement.

.A procurement officer, exclusively assigned to the Hinterland Project will be hired by ASDU.

The annual consolidated ,8, Audit.


financial statements of the Proje~ will be :Independently audited, pursuant to the agreed terms of reference and In accordance with the International Standards on Auditing-apd the IFAD Guidelines on Project Audits.
In line with Its mandate as per the Guyana Audit Act 2004, the Auditor General shall be responsible for conducting ,financial, compliance, performance and value-for-money audits with respect to the accounts of all projects funded by the way of loans or grants by any foreign state or organization.

In this regard, the Guyana Auditor General Audit Office will conduct the audit of the Project financial statements.
Annual audit reports will be stJbmltted to IFAD within the six months of the end of the each fiscal year.

9, Supervision.

IFAD will provide direct supervision for the Project, complemented by Implementation support missions.

One supervision mission is generally planned for each year.
The first supervision mission, undertaken approximately six months after the dat e of entry Into force, will monitor progress in relation to the timeframe defined In the Implementation plan, and will assess advancements in fiduciary aspects, expenditures, contribution of funds from the counterpart and compliance with the terms of the financi ng agreement.

Implementation support missions will be planned to cover the , themes and_ areas recommended by supervision missions.

10.
10.

Project Implementation Manual (PIM).

The PIM shall be prepared by the PMU and approved by the Permanent Secretary, who will have the responsibility to send to IFAD for Its non-objection.

The PIM may be amended or otherwise modified from time to time only with the prior consent of t he Fund.

The PIM provides the basis for the implementation of Hinterland Environmentally Sustainable Agriculture Development Project (Hinterland Project).
It will establish the Strategic and Institutional Framework and provide guidance for the overall planning and implementation of activities.

It will detail the collaborative framework for project Implementation, the institutional and management arrangements; the administrative, fiduciary and contractual procedures; monitoring, evaluation and reporting.
The Manual will establish effective implementatfon procedures and mechanisms, which will ensure the achievement of the overall objectives as outlines in the Project's design document and log-frame.

8 Schedule 2 Allocation Table 1.

Allocation of Proceeds.


The Table below sets forth the Categories of Eliglbl Expenditures to be financed by the Loan and Grant and the ·allocation of th: f amounts of the Loan and Grant to each Category and the percentages 0 expenditures for items to be financed in each Category: I.

Vehicles and equipment II.

Training 170 000 550 000 - - 100% net of taxes 100% net of taxes III.

Consultancy services 2 620 000 450 000 100% net of taxes IV.
Grants (for Sub-prqjects) 2 880 000 V. Salaries and operating 940 000 expenses - - 100% net of taxes 100% net of taxes Retroactive Financing .

As an exception to section 4 .08(a)(ii) of the General 2.
Conditions, specific eligible expenditures incurred from the date of approval by the Executive Board until the date of entry into force of this Agreement shall be considered eligible up to an amount equivalent to three hundred thousand US dollars (USD 300 000) for activities relating to: (i) recruitment of key personnel, (ii) baseline study for Region 9 and Region 1, (iii) detailed value chains study for spices in Region 1, (iv) SOFA study in Mabaruma and Maruca sub regions of Region 1.
Activities to be financed by retroactive financing and their respective category of expenditures and source of financing will requi re prior no objection from IFAD to ·be considered eligible.

These amounts may be reimbursed after the general conditions precedent to withdrawal have been met Start-up Costs.

Withdrawals in respect of expenditures for start-up costs for the 3. same activities indicated in the previous paragraph can be made before the satisfaction of the conditions precedent to withdrawal.
Start-up costs shall not exceed an aggregate amount equ ivalent to three hundred thousand US dollars (USD 300 000) .

Activities to be financed by start-up costs and their respective categories of expenditures and source of financing will require prior no objection from IFAD to be considered eligible .

'-.... \ .

9 1li: .

.

L !

j1i :11 fl \t t ' .I 11 ~,I i ----- - - - - - - - - AflTICLE I - APPLICATION Section l,01.
Application of General Conditions These General Conditions apply to all Financing Agre_ements.

They apply to other agreep,ents only if the agreement expressly so provides.

ARTICLE Il - DEFINITIONS Section 2.01, General D efinitions .

h the fo\\ow·,ng me.anings wherever used in these General The fo\\owmg terms ave Conditions: · 'Mreement" means a Financing Agreement or other agree~ent sub3ect to these Genera\ Conditions. '
f..nnual w orl<.plan and Budget" or 11 A\JIJP'B" means the ann~al ~ot'\<.plan and budget for can'1lng out a Pro}ect during a particular Project '(ear, which mc\udes the Procurement Plan. '

Borrower" means the party designated as such in an Agreement. '

Coercive practice" means impairing or harming, or threatening to impair or harm, dlrectly or lndlrectly, any party or the property of the party to influence improperly the actions of a party .
"Colluslve pract ice" means an arrangement between two or more parties designed to achieve an Improper purpose, including influencing improperly the actions of another party. '

Cooperating Institution" means an inst it ution designated as such in a Financing Agreement as responsible for the administration of the Financing and/or the supervision of the Implementat ion of the Project.
"Cooperation Agreem ent" means an agreement or agreements between the Fund and a Cooperating Instit ution by which a Cooperat ing Institution agrees to act as such.

"Corrupt practice" means offering, giving, receiving or soliciting, directly or indirectly, anything of value to improperly influence the actions of another party.

"Currency" of a State or a territory means t he currency that is legal tender for the payment of public and private debts in such State or territory.
1e ~01 1 In 1: on t: ,of 2 These General Cond itions for Agricult ural Development Financing wer e ado pted by IFAD's Executiv e Board on 29 April 2009.

Sections 2.01, 4 .0B(a) and 5 .0 1 wer e amended by decision of the Executive Board on 17 September 2010 .

Sectio n 5.01 was further amended In 2013 further to GC Resolution 178/XXXVI.
I n Aprll 2014, the Executive Board approved additional amendments to Sections 1.01, 2.01, 4.01, 4.09, 5 .01, 5.02, 5.04, 6.01, 6.02, 6.03, 7.02, 7.03, 8 .02 , 11.02 , 14 .04 , 14.05, 15.0 5.

These General Conditions, as amended, apply to all Financing Agreement s for projects and programmes approved by the Executive Board during and subsequent to its 112th session i n September 2014.
10 "Denomination Currency" means, with respect to a Loan or Grant, the currency (~hi may also be the SDR) in which such Loan or Grant is d enomi nated, as specified in thch e Financing Agreement.

"Designated Account" means an account designated for advance withdrawals by the Borrower/Recipient in accordance with Section 4.04(d) .

"Eligible Ex penditure" means an expenditure that complies with Section 4.08.
"Euro" or "EUR" each means the lawful currency of the member states of the European Union that adopt the single currency in accordance with the Treaty establishing the European Community, as amended by the Treaty on European Union·.

,.

"Financing" means a Loa n, a Grant, or a c_ombination thereof.

"Financing Agreement" means a Project Financing Agreement or Programme Financing Agreement, pursuant to which the Fund agrees to extend Financing to the Borrower/Recipient. '
--- "Financing Closing Date" means the date on which the right of the Borrower/Recipient to request withdrawals from the Loan Account and/or Grant Account ends, which is six (6) months after.

the Project Completion Date or such later date as the Fund may d esignate by notice to the Borrower/Recipient.

"Fiscal Year" means the twelve-month period designated as such in an Agreement.
"Fraudulent practice" means any action or omission, including a misrepresentation, that knowingly or recklessly misleads, or attempts to mislead, a party to obtain a .financial or other benefit or to avoid an obligation.

"Freely convertible currency" means any currency so designated by the Fund at ar)Y time.

"Fund" means the International Fund for Agricultura l Development.

"Grant" means a grant extended to a Recipient pursuant to a Financing Agreement or other Agreement.
\... "Grant Account" means the account in the books of the Fund opened in the name of the Recipient to which the amount of the Grant is credited.

"Guarantee Agreement" means an agreement between a Member State and the Fund by which such Member State guarantees the performance of another Agreement.

"Guarantor" means any Member State designated as such in a Guarantee Agreement.
"!FAD Procurement Guidelines" means the Procurement Guidelines approved by the Fund's Executive Board in December 2004 (for Financing approved by the Fund's Executive Board prior to September 2010) or the Project Procurement Guidelines approved by the Fund's Executive Board in September 2010 (for Financing approved by the Fund's Executive Board after September 2010) as such guidelines may be amended by the Fund.
"!FAD Reference Interest Rate" means the rate determined periodically by the Fund as Its reference rate for the computation of interest on its Loans.

"Lead Pr oject Agency" means the entity designated as such in an Agreement, which has overall responsibility for the execution of a Project.

11 I , I Ii I'" I :W I ~1111~ I: I I I I: I 11 , I 11 !II !.Ill I 'loan" means a loan extended by the Fund to the Borrower pursuant to a Financing Agreement.
'loan Account" means the account in the books of the Fund opened in the name of the Borrower to which the amount of a Loan is credited.

'loan Service Payment" means any payment required or permitted to be made by the Borrower or the Guarantor to the Fund under a Financing Agreement, including (but not limited to) any payment of the principal of, or interest or service charge on any Loan.

'Loan Service Payment Currency" m·eans the freely convertible currency defined as such in a Financing Agreement.
'Member State" means any Member State of the Fund.

'Pound sterling" or "GBP" means the currency of the United Kingdom of Great Britain and Northern Ireland.

'Procurement Plan" means the Borrower/Recipient's Procurement Plan coverin g the initial eighteen (18) month period of Project Implementation, as the same shall be updated to cover succeeding twelve (12) month periods.
'Project" means the agricultural development project or programme described in an Agreement and financed, in whole or in part, by the Financing. '

Project Account" means an account for Project operations as described in Section 7,02(b ).

'Project Agreement" means any agreement between t he Fund and any Project Party relating to the implementation of all or any part of a Project. '
Project Completion Date" means the date specified in an Agreement on which the Implementation of the Project is to be completed, or such later date as the Fund may designate by notice to the Borrower/Recipient. '

Project Implementation Period" means the period during which the Projec~ is to be carried out, beginning on the date of entry into force of the Agreement and ending on the Project Completion Date.

"Project Member State" means the Member State in which the Project is carried out.
'Project Party" means each entity responsible for the implementation of the Project or any part thereof.

The term "Project Party" includes (but is not limited to) the Lead Project Agency and any entity designated as a Project Party In an Agreement. '
Project Year" means (I) t he period beginning on the date of entry into force of an Agreement and ending on the last day of the then-current Fiscal Year, and (ii) each period th~reafter beginning on the first day of the Fiscal Year and end ing on the last day thereof, provided, however, that if the date of entry into force of the Agreement falls after the midpoint of the Fiscal Year, Project Year 1 shall continue through the fo llowing Fiscal Year, ' Recipient" means the party designated as such in an Agreement. '
Special Drawing Rights" or "SOR" mean special drawing rights as valued from time to time by the International Monetary Fund in accordance with its Articles of Agreement.

12 "Subsidiary Agreement" means any agreement or arrangement by which (i) the whole part of the proceeds of the Financing are made available to a Project Party and/or (ii) t Project Party undertakes to carry out the Project, in whole or in part.

\.. ( "Target Population" means the group of people intended to benefit from a Project.
"Taxes" means all imposts, levies, fees, tariffs and duties of any kind imposed, levied collected, withheld or assessed by the Project Member State ?r any political subdivisi~n thereof at any time.

"US dollar" or "USO" means the currency of the United States of America.
"Value Date" means, in respect of any withdrawal from the Loa;1 Account, the date on which such withdrawal is deemed made in accordance with Section 4.06 and, in respect of any Loan Service Payment, the date on which such Loan Service Payment is deemed made in accordance with Section 5.04.

"Yen" or "JPY" means the currency of Japan.

Section 2.02.
Section 2.02.

Use of Terms As used in these c;;eneral Conditions and any Agreement, except as the context otherwise requires, terms in the singular include the plural, terms in the plural include the singular, and masculine pronouns include the feminine.

Section 2.03.

References and Headings Unless otherwise indicated, references in these General Conditions to Articles or Sections refer to Articles or Sections of these General Conditions.
The headings of the Articles and Sections and in the Table of Cohtents of these General Condltions are given for convenience of reference only and do not form an integral part of these General Conditions.

ARTICLE III - THE COOPERATING INSTITUTION Section 3.01.

Appointment of the Cooperating Institution A Financing Agreement may provide that a Cooperating Institution will be appointed·to adm inister the Financing and supervise the Project.

Section 3.02.
Responsibilities of the Cooperating Institution If appointed, the Cooperating Institution shall be responsible for: (a) (b) (c) (d) facilitating Project implementation by assisting the Borrower/Recipient and the Project Parties in interpreting and complying with the Financing Agreem ent; reviewing the Borrower/Recipient's withdrawal applications to determ ine the · amounts which the Borrower/Recipient is entitled to withdraw from the Loan and/or Grant Account; reviewing and approving on a no-ob.jection basis the procurement of goods, clVil works and services for the Project financed by the Financing; monitoring compliance with the Financing Agreement, bringing any substantial no~ compliance to the attention of the Fund and recommending remedies therefor; an I 13 r d, :Ion n ect ed vise /ar, ,ns rd carrying out such other functions to administer the Financing and supervise the Project as may be set forth in t he Cooperation Agreement.
Section 3.03.

Cooperation Agreement If a Cooperating Institution is appointed, the Fund shall enter into a Cooperation Agreement with the Cooperating Institution setting forth the terms and condition·s of its appointment.

.

Section 3.04.

Actions by the Cooperating Institution Any action by the Cooperating Institution in accordance with a Cooperation Agreement shall be regarded and treated by the Bonower/Recipient, the Guarantor and the Project · Parties as an action taken by the Fund.

Section 3.05.
Section 3.05.

Cooperation by the Bor rower/Recipient and the Project Parties The Borrower/ Recipient, the Guarantor and the Project Parties shall take all necessary or appropriate steps to enable the Cooperating Institution to carry out its responsibilities smoothly and effectively.

ARTICLE IV - LOAN ACCOUNT AND WITHDRAWALS Section 4.01.
Loan and Grant Accounts Upon the entry into force of a Financing Agreement, the Fund shall open a Loan Account and/or a Grant Account denominated in the Denom ination Currency in the name of the Borrower/Recipient and credit the principal amou nt of the Loan and/or the amount of the Grant, respectively thereto.

Section 4.02.
Section 4.02.

Withdrawals from the Loan and Grant Accounts (a) Between the date of entry into force of the Agreement and the Financing Closing Date, the Borrower/Recipient may request withdrawa ls from the Loan Account and/or Grant Account of amounts paid or to be paid for Eligible Expenditures.

The Fund shall notify the Borrower/Recipient of the minimum amount for withdrawals.
(b) No withdrawal sha ll be made from the Loan and/or Grant Accounts until t he fi rst AWPB has been approved by the Fund and the Fund has determined that all other conditions specified in the Financing Agreement as additional general conditions precedent to withdrawal have been fulfilled .

The Financing Agreement may also establish additional specific conditions precedent to withdrawal applicable to particular categories or activities.
Withdrawals to meet the costs of starting up the Project may be made from the date of entry into force of the Agreement, subject to any limits established in the Financing Agreement.

Section 4 .03.
Section 4 .03.

Special Commitments Upon the Borrower/Recipient's request, the Fund may agree to make an irrevocable commitment to pay amounts necessa ry to guarantee a Letter of Credit used to finance ~llglble Expend itures (a "Special Commitment") on such terms and conditions as the Borrower/Recipient and t he Fund may ag ree, 14 q i I I I I !

I I I /I ii I, [ i H 11 ' I , I !

', .· f · f i· ·.'

Ii ·, 11 'f, ! '

1 I • :1 I l" ( :I:.· ~~: ·, .

: _ • lln..¥111..._ \.

\ Section 4.04.


Applications f o r W it hdrawal, or Special Comm it ment (a) When the Borrower/Recipient w ishes to request a w ithdrawal fr.om the loan a d Grant Accounts or a Special Commitment, the Borrower/Recipient shall delive~ / 0 r the Fund an application in the form specified therefor by the Fun~, togethe·r Wlti such documents and other ev idence in support of such application as t he Fund shall reasonably request.
(b) The Borrower/Recipient shall furnish to the Fund satisfactory evidence of the authority of the person or persons authorised to sign such applications and the authenticated specimen signature of each such person.

(c) Each such application, and the accompanying documents and ot_her ev idence imust be sufficient to satisfy the Fund that the Borrnwer/Recipient is entitl ed to suc'h withdrawal or Special Commit ment.
(d) If the Borrower/Recipient requ ests a withdraw al from the Loan and/or Grant Accounts for amounts to be paid thereafter for Eligible Ex penditures, the Fund may ' before transferring such amount to the Borrower/Recipient, requi re that the Borrower/Recipient pr ov ide evidence satisfactory to the Fund showing that previous withdrawals have been properly spent for Eligible Ex penditures.
The Fund .may place reasonable limits on the amount that the Borrower/Recipient m ay withdraw In adv ance or the ov erall balance of such advance withdrawals, and m ay require that such amounts be held in a freely convertible currency and/or be held In an account designated for that purpose in a bank acceptable to the Fund.

· S ection 4 .05.
· S ection 4 .05.

T ransf er by t he Fund Upon receipt of an authenticated and satisfactory application for w ithdrawal from th e Borrower/Recipient, the Fund shall transfer to the account specified by th e Borrower/Recipient the amount specified therein .

Section 4 .0 6.

Value Dates of W ithd ra w als A withdraw al shall be deemed made as of the day on which the relevant fi nancial Institution debits the account of the Fund chosen for the purpose of disbu rsing such w ithdrawal.

Section 4.07.
Section 4.07.

A llocations and Reallocations of Financing Proceeds (a) A Financing Agreement may allocate the amount of the Financing to categories of Eligible Expenditures and specify the percentages of such Eligible Ex penditures to be financed by the Financing .

(b) The Fund shall monitor the uses of the Financing in order to determine when the allocation to a category has been depleted or is about to be depleted .
(c) If the Fund determines that t he amount of the Financing allocated in the Financing Agreement to a category of Eligible Expenditures is or will be insufficient, the Fund may, by notice to the Borrower/Recipient: (i) reallocate to such category amounts of the Financing allocated to another category to the extent required to meet the estimated shortfall; and/or (ii) if such realloca t ion w ill not fully meet the estimated shortfall, reduce the percentage of such Eligible Ex penditures to be financed by the Financing.
15 ii I i j 1. ll•i ..

I 111, ,,.ii r· Ii,, ' (b) examine the originals and take copies of any data, accounts, records and documents relevant to the Financing, the Project, or any Project Party; and (c) visit, communicate with and make enquiries of all Project personnel and any st ff member of any Project Party.

a .

Section 10.04.
a .

Section 10.04.

Audits Initiated by the Fund The Borrower/Recipient and .the Project Parties shall permit auditors designated by the Fund to audit the records and accounts relating to the Project.

The Borrower/Recipient and the Project parties shall cooperate fully with any such audit and .accord the auditors the full rights and privileges of agents or representatives of the Fund under Section 10.03.
With the exception of audits carried out in accordance with Section 9.03(c), the Fund shall bear the cost of--such audits.

Section 10.05.

Evaluations of the Project (a) The Borrower/Recipient and each Project Party shall facilitate all evaluations and \.

.

reviews of the Project that the Fund may carry out during the Project Implementation Period and for ten (10) years thereafter.
(b) As used in this Section, the term "facilitate", in addition to full compliance with Articles VIII, IX and this Article X in respect of such evaluations and reviews, includes providing timely logistical support by making available Project personnel and equipment and promptly taking such other action as the Fund may request In connection with such evaluations and reviews, but does not include incurring out of-pocket expenses.

Section 10.06.
Country Portfolio Reviews The Project Member State shall permit the agents and representatives of the Fund, in consultation with the Project Member State, to enter its territory from time to t ime to · exchange views with such persons, visit such sites, and examine such data, records and documents as the Fund may reasonably request in order to carry out a general review of all projects and programmes financed, in whole or in part, by the Fund in its t erritory and all financing extended by the Fund to the Project Member State.
The Project Member State shall ensure that all concerned parties cooperate fully in such review. '

'.

ARTICLE XI - TAXATION Section 11.01.

Taxation (a) The Financing and all Loan Service Payments shall be exempt from all Taxes, and all Loan Service Payments shall be made free and clear of Taxes.

(b) The Agreement shall be exempt from any Taxes on signature, delivery or registration.
(c) The use of any proceeds of the Financing to pay for Taxes is subject to the Fund's policy of requiring economy and efficiency in the use of its Financing .

Therefore, if the Fund at any time determines that the amount of any such Tax is excessive, discriminatory or otherwise unreasonable, the Fund may, by notice to the Borrower/Recipient, reduce the percentages of Eligible Ex penditures to be financed by the Financing which are specified in the Financing Agreement.
25 staff the !lent j ltors rd ~el t ln ut- ) ind ~ of and d f d ARTICLE XII - REMEDIES OF THE FUND I Section 12.01.
Suspension by the Fund Whenever any of the following ·events has occurred and is continuing, the Fund may suspend, in whole or in part, the right of the Borrower/Recipient to request withdrawals from the Loan and/or Grant Accounts: (I) (II} The Borrower has failed to make any Loan Service Payment when due, whether or not the Guarantor or any other third party has made such Loan Service Payment.
The Borrower/Recipient has failed to make any payment due under any other Financing Agreement; c::;_uarantee Agreement, or other financial obligation of any kind of the Borrower/Recipient to the Fund, whether or not any third party has made such payment.

(Iii) The Guarantor has failed to make any Loan Service Payment when due.
(Iv) (v) (vi) The Guarantor has failed to m ake any payment due under any other Financing or Guarantee Agreement between the Guarantor and the Fund, or other financial obligation of ariy kind of the Guarantor to the Fund.

The Fund has determ ined that t he Project has failed to fulfil, or is unlikely to fulfil in a t imely manner, its purposes as stated in the Agreement'.
The Fund has determined that a situation has arisen which m ay make it improbable that the Project can be successfully carried out or th<;lt any Project Pa rty will be able to perform any of its obligations under any Agreement.
(vii) The Project Member State has been suspended from membership in the Fund or ceased to be a Member State; or the Project Member State has delivered a notice of its intention to w ithdraw from the Fund, (viii) Any representation made by the Borrower/Recipient, the Guarantor, or any Project Party in any Agreement, or any statement furnished in connection therewith and r elied upon by the Fund in making the Financing, is incorrect or misleading in any material respect.
(Ix) (x) (xi) If the Borrower/ Recipient is not a Member State, t he Fund has determined that any material adverse change in the condition of the Borrower/Recipient has occurred.

Either the Borrower/Recipient or the Guarantor has been unable t o pay its debts generally as they come due.

Any competent authority has taken action for the d issolution of the Lead Project Agency or suspension of its operations.
(xii) Any competent authority has taken action for the dissolution of any Project Party (other than the Lead Project Agency) or suspension of its operations, and the Fund has determined that such dissolution or suspension is likely to have a material adverse effect on t he Project.

26 ---- - --- (xiii) The Borrower/Recipient has fai led to make any funds, facilities, servl~es other resources available to the Project Parties in accordance w ith Sectlo~~d 7.02 or 7.03 .
(x iv) (xv) The Fund has not received any audit report or other document referred to 1 Article VIII (Implementation Reporting and Information) or Article IX n (Financial Reporting and Information) within the time prescribed therefor in the Agreements, or the audit report is not fully satisfactory to the Fund or the Borrower/Recipient or any other Project Party has otherwise failed to perform its obligations under Article VIII or IX.

The Lead Project Agency or any other Project Party has failed .
t o perform any of its obligations under a Project Agreement.

_ .

\.

\.

., 1· I I Iii!

Ii 11 I i t,~ ' ··I :1 i J•· r: :1 (xvi) The Borrower/Recipient or the Lead Project Agency has failed to perform any of its obligations under any Subsidiary Agreement.
(xv ii) Any Project Party (other than the Lead Project Agency) has fai led to perform any of its obligations under any Subsidiary Agreement, and the Fund has determined that such failure has had, or is likely to have, a material adverse effect on the Project.· ( xviii) Any Subsidiary Agreement or any provision thereof has been assigned, waived, suspended, terminated, amended or otherwise modified without the prior consent of the Fund, and the Fund has determined that such assignment, waiver, suspension, termination, amendment or m odification has had, or is likely to have, a material adverse effect on the Project.
(xix) .

The Fund has suspended, in whole or in part, the right of the Borrower/Recipient or the Guarantor to request or make withdrawals under any other Agreement with the Fund.

(xx) The Borrower/Recipient or any Project Party has failed to perform any other obligati on under the Financing Agreement or any other Agreement .

(xxi) The Fund qetermines that any amount of the Financing has been used to finance an expenditure other than an Eligible Expenditure.
(xxii) The Fund, after consultation with the Borrow er/Recipient, has determined that the material benefits of the Project are not adequately reaching the Target Population, or are benefiting persons other than the Target Population to the detriment of the Target Population.
(xxiii) The Borrower/Recipient has defaulted in the performance of any Special Covenant set forth in the relevant Agreement, and such default has continued unremedied for a period of thirty (30) days, and the Fund has determined that such default has had, or is likely to have, a material adverse effect on the Project.
(xxiv) The Fund has given notice to the Borrower/ Recipient that credible allegations of coercive, collusive, corrupt or fraudulent practices in connection with the Project have come to the attention of the Fund, and the Borrower/Recipient has failed to take timely and appropriate action to address the matters to the satisfaction of the Fund.

27 rd r in t jy ,y I I (xxv) Procurement has not been or is not being carried out in accordance with the IFAD Procurement Guidelines.
I (xxvi) Upon the occurrence or non-occurrence, as the case may be, of any event I specified in the relevant Agreement as an additional ground for suspension.

Such suspension shall become effective upon dispatch of notice by the Fund to the Borrower/Recipient and the Guarantor.

Such suspension shall continue until the Fund has notified the Borrower/Recipient that the Borrower/Recipient's right to request withdrawals has been restored in whole or in part.
(b) If the audit report required by Section .9.03 has not been submitted to the Fund within six (6) months of the date en which it is due, the right of the Borrower/Recipient to request withdrawals from the Loan and/or Grant Accounts ,shall be suspended.

Section 12.02.
Section 12.02.

Cancellation by the Fund (a) If any of the following events has occurred, the Fu nd may cancel in whole or in part the remaining amounts in the Loan and/or Grant Accounts: (1) ' The right of the Borrower/Recipient to request withdrawals from t he Loan and/or Grant Accounts has been suspended under Section 12.01 with respect to any amount of the Financing for a continuous period of at least thirty (30) days.
(ii) The Fund determines after consultation with the Borrower/Recipient that any amount of the Financing will not be required to finance the Project.
(Iii) After consultation with the Borrower/Recipient, the Fund determines that coercive, collusive, corrupt or fraudulent practices were engaged in by representatives of the Borrower/Recipient or any Project Party in respect' of any expenditures incurred during the procurement or the carrying out of any contract financed by the Financing, and that the Borrower/Recipient has failed to take timely and appropriate action to remedy the situation.
(iv) The Fund has determined that any amount of the Financing has been used to finance an expenditure other than an Eligible Expenditure and the Borrower/Recipient has failed to promptly refund such amount to the Fund upon the Fund's instructions.

(v) The Fund has received any notice from the Guarantor terminating its obligations under the Guarantee Agreement.

(vi) The Mid-Te rm Review has recommended that the Project be terminated.
(vii) Upon the occurrence or non-occurrence, as the case may be, of any event specified in the relevant Financing Agreement as an additional ground for cancellation.

Such cancellation shall be effective upon dispatch of notice to the Borrower/Recipient.
28 {b) Any amounts remaining in the Loan and/or Grant Accounts shall be cancelled on Financing Closing Date, except for any unwithdrawn balances of applications for withdrawal received by the Financing Closing Date and any amounts subject to undischarged Special Commitments, which shall be cancelled upon the full discharge of such Special Commitments.

Section 12.03.
Section 12.03.

Cancellation by the Borrower/Recipient After consultation with the Fund and wi th the concurrence of the Guarantor, the Borrower/Recipi~nt may by notice to the Fund cancel any unwithdrawn amount of the Financing, except for amounts subject to Special Commitment.

Such cancellation shall become effective upon acknowledgement thereof by the Fund.

Section 12.04.
Section 12.04.

Applicability of Cancellation or Suspension {a) No cancellation or suspension shall apply to amounts subject to any Special Commitment made by the Fund, unless such Special Commitment expressly provides otherwise.

\, (b) Except as expressly provided in this Article, all provisions of the Financing Agreement shall continue in full force and effect notwithstanding any cancellation or suspension .

Section 12.05.
Acceleration of Maturity If at any time any of the following events has occurred, at any subsequent time during the continuance thereof, the Fund may decla re the principal amount of the Lo.an then outstanding, together with all accrued interest and other charges thereon, to be immediately due and payable: (a) any event specified in paragraphs (v) through (xii), inclusive, of Section 12.01 has occurred; (b) the Fund has declared the principal of any other loan to the Borrower/Recipient or the Guarantor then outstanding to be immediately due and payable; · \ (c) any event specified in paragraphs (i) through (iv), inclusive, of Section 12.01 has occurred and continues for a period of thirty (30) days; {d) any event specified in paragraphs (xiii) though (xxvi), inclusive, of Sect ion 12.01 has occurred and continues for a period of sixty (60) days after notice thereof has been given by the Fund to the Borrower/Recipient and the Guarantor; or (e) any other event specified in the Financing Agreement for the purposes of this Section has occurred and has continued for the per iod, if any, specified In t he Financing Agreement.
Such declaration shall be effective upon dispatch of notice to the Borrower/Recipient and the Guara·ntor, whereupon such principal, interest and other charges shall become due and payable immediately.

Section 12.06.

Other Remedies The remedies of the Fund set forth in this Article shall not limit or otherwise prejudice any rights or remedies available to the Fund otherwise.

29 ii 1.1 i1 ' n Ii I 11•1 .ii II 1111 1111 11\I r lil11 I I lh -------------------------- -- - ~1--....,....,,._... - - ' .
)n the ' >r ARTICLE XIII - ENTRY INTO FORCE AND TERMINATION Section 13.01.

Entry into Force II 1 or An Agreement or amendment thereto shall enter into force on the date when both the Fund and the Borrower/Recipient have signed it, unless the Agreement states that it is subject to ratification, in which case the Agreement shall enter into force on the date the Fund receives an instrument of ratification. '

Section 13.02.
Section 13.02.

Termination before Withdrawal The Fund may terminate the Agreement and all rights and obligations of the parties thereunder if: (a) before the date of first withdrawal from the Loan and/or Grant Accounts, any event of suspension specified in Section 12.01 has occurred; or (b) before the date of first withdrawal from the Loan and/or Grant Accounts, the Borrower/Recipient, the Guarantor or any other Project Party has taken any action Inconsistent with the object and purpose of any Agreement.
Section 13.03.

Termination upon Full Performance An Agreement and all obligations of the parties thereunder shall terminate when the entire principal amount of ~he Loan withdrawn from the Loan Account and all interest and other charges which shall have accrued on the Loan have been paid and when all other obligations of the parties have been fully performed, or when agreed by the parties.

ARTICLE XIV - ENFORCEABILITY AND RELATED MATTERS Section 14.01.
Enforceability The Agreement and the rights and obligations of the parties thereunder shall be valid and enforceable in accordance with their terms, regardless of any law to the contrary in the territory of the Project Member State.

Section 14.02.

Failure to Exercise Rights No delay in exercising, or failure to exercise, any right, power or remedy of any party under an Agreement shall impair any such right, power or remedy, or be construed as a waiver thereof.
No action or omission of any party in respect of any default under an Agreement.shall impair any right, power or remedy of such party in respect of any subsequent default.

Section 14.03.

Rights and Remedies Cumulative The rights and remedies of any party under an Agreement are cumulative and (except as otherwise expressly provided) not exclusive of any right or remedies that such party would otherwise have.

Section 14.04.
Section 14.04.

Settlement of Disputes Any dispute, controversy or claim arising out of, or in relation to, an Agreement, or the existence, interpretation, application, breach, termination, or invalidity t hereof, shall be settled in accordance with the Arbitration Rules (2012) of the Permanent Court of Arbitration.

30 ·1 :11 1 11,i II l;lir : 1, I!.

I·, I !

,.r :t, f 11 ,~, iii ,i I l .. 11: (a) The number of arbitrators shall be one (1).

(b) The place of arbitration shall be Rome, Italy.


(c) The language to be used in the arbitral proceedings shall be the language of the Agreement.

Section 14.05.

Applicable Law Any agreements subject to these General Conditions shGJII be governed by, and constru ed in accordance w_ith, public international law.

ARTICLE XV - MISCELLAN EOUS PROVISIONS Section 1 5.01.

Communications \_ All notices, requests and other communications given or made under an Agreement shall be in writing.
Except as otherwise expressly provided in the Agreement, any such notice, request or other communication shall be deemed duly given or made when delivered by hand, mail, telegram, facsimile or email to the party to which it is given or made at such party's address specified in the particular Agreement, or at such other address as such party may designate by notice to the other parties thereto.

Section 15.02.
Section 15.02.

Language of Reporting The Borrower/Recipient and the Project Parties shall deliver all-reports and information to the Fund in the language of the Agreement, or in any other language agreed by t he parties.

Section 15.03.

Author ity to Tak e Action The representative or agent so designated in any Agreement, or another person duly authorized in writing by such representative or agent, may take any action and sign any document in connection with such Agreement on behalf of such party.
Section 15.04.

Evidence of Authority \ '- Upon request by the Fund, the Borrower/Recipient, the Guarantor and any Project Party shall furnish to the Fund sufficient; evidence of the authority of the person or persons referred to in Section 15.03, c:ind the authenticated specimen signature of each such person .

Section 15.05.

Modifications of the Agreement The parties may agree from time to time to modify the terms and conditions of an Agreement or the application of the Agreement.
Any amendment to an Agreement shall enter into force in accordance with the provisions of Section 13.01 hereof, unless t he parties agree otherwise.

Section 15.06.

Change of Entity or Representative I f a party wishes to appoint any successor to, reassigns the responsibilities of, or changes the designation or address of any of the entities specified in an Agreement, such party shall give notice thereof to the other parties.
Upon acceptance by the other parties, such new entity shall constitute the entity fully responsible for carrying out the functions assigned to its predecessor under the Agreement.

31 ------------- - Section 15.07 .


Signature of the Agreement The sigpature of an Agreem ent by a party shall constitute t he expression of such party's consent to be bound th ere by , su bj ect only to any ratification or aut horisat ion required by a rule of internal law of fundam ental im portance and disclosed to the other party in writing before such sig nature.

~ I I I I f 32 d/or to jh shall IUSt ay, >us , In tt ,t section 4.08.
Eligible Expenditures (a) The Financing shall be used exclusively to finance expenditures meeting each of the following eligibility requirements: (I) The expenditure shall meet the reasonable cost of goods, works and services required for the Project a'nd covered by the relevant AWPB and· procured ifl conformity with the Fund's Procurement Guidelines.
(Ii) The expenditure shall be incurred during the Project Implementation Period, except that expenditures to meet the costs of winding up the Project may be Incurred after the Project Completion Date and before the Financing Closing Date.

(ill} The expenditure shall be incurred by a Project Party.
(iv) If the Agreement allocates the amount of the Financing to categories of Eligible Expenditures and specifies the percentages of such Eligible Expenditures to be financed by the Financing, the expenditure must relate to a category whose allocation has not been depleted, and shall be eligible only up to the percentage applicable to such category.

(v) The expenditure shall be otherwise eligible in accordance with the terms of the Financing Agreement.
(b) The Fund may from time to time exclude certain types of expenditure from eligibility.

(c) Any payment prohibited by a decision of the United Nations Security Council taken under Chapter VII of the Charter of the United Nations, shall not be eligible for financing by the Financing.
(d} Any payments to a person or an entity; or for ariy goods, works or services, if making or receiving such payment constitutes a coercive, collusive, corrupt or fraudulent .practice by any representative of the Borrower/Recipient or any Project Party, shall not be eligible for financing by the Financing.

Section 4.09.
Section 4.09.

Refund of Withdrawals If the Fund determines that any amount w ithdrawn from the Loan and/or Grant Accounts was used to finance an expenditure other than an Eligible Expenditure or will not be needed thereafter to finance Eligible Expenditures, t he Borrower/Recipient shall promptly refund such amount to the Fund upon instruction by the Fund.

Except as the Fund shall otherwise agree, such refund sha ll be made in the currency used by the Fund to disburse such withdrawal.
The Fund shall credit the Loan and/or Grant Accounts with the amount so refunded.

ARTICLE V- LOAN SERVICE PAYMENTS Section 5.01.

Lending Terms (a) Loans provided by the Fund shall be extended on the terms specified in the Financing Agreement and determined in accordance with t he applicable lending policies of the Fund.

16 (b) I11terest and service charge shall accrue on the outstanding principal ari1o·unt of ~ Loan and shall be computed on the basis of a 360-day year of twelve (l:z) 30:d ,the a/ months.
The Fund shall provide the Bo:r?wer with a state~~nt ?f inter~st ~md 0 service charge due generated on the b1lhng due dates spec1f1ed in the Financ/ Agreement and the Borrower shall effect payment within thirty (30) days of s~~ h c date.

~ (c) Th~ Fund shall publish the IFAD Reference Interest Rate applicable in each interest period.
(d) During the grace period, interest and/or service charge shall accrue on the outstanding principal amount of the Loan and shall be payable semi-annually on th billing due dates, but no payments of pri ncipal shall be due.

e Section 5.02.
e Section 5.02.

Repayments and Prepayments of Principal '- (a) The Borrower shall repay the aggregate principal amount of the Loan withdrawn from the Loan Account in semi-annual instalments, calculated on the basis of the total principal amount over the maturity period minus the grace pe riod.

The Fund shall inform the Borrower of the dates and amounts of the payments as soon as possible a~er the start of the period of maturity of the Loan.
If the total prln.,cipal amount of the Loan is not fully disbursed, upon cancellation of the undisbursed principal amount the schedule of repayments shall be recalculated on the basis of the amount actually disbursed minus principal repayments already received by the Fund .
\ (b) The Borrower shall have the right to prepay all or any part of the principal amount of the Loan, provided that the Borrower pays all accrued and unpaid int.erest and/or service charges on the amount to be prepaid as of the prepayment date.

All prepayments shall be credited against the remaining Loan instalments in such manner as the Borrower and the Fund shall agree.

, Section 5.03.
, Section 5.03.

Ma_nner and Place of Payment All Loan Service Payments shall be paid to such account or accounts in such bank or other financial institution as the Fund may designate by notice to the Borrower.

Section 5.04.

Value Dates of Loan Service Payments Loan Service Payments shall be deemed made as of the day on which the account of the Fund designated therefor is properly credited with such amount.
If the amount-is-credited within the period indicated in Section 5.0l(b), the value date of payment shall be the billing due date.

If the amount is credited alter the period indicated in Section S.01(b), the value date of payment shall be the day the amount is credited.

ARTICLE VI - CURRENCY PROVISIONS Section 6 .

01.


Currencies for Withdrawals (a) Withdrawals from the Loan and/or Grant Accounts shall be made in the respective currencies in which expenditures to be financed out of the proceeds of the Financing have been paid or are payable, or in such currency or currencies as the Fund may select.
· (b) The Loan and/or Grant Accounts shall be debited by the amount withdrawn in the Denomination Currency or, if the amount so withdrawn is disbursed in another 17 currency, its equivalent in the Denomination Currency as of the value date of withdrawal.

Sectlon.6.02.

Loan Service Payment Currency All Loan Service Payments shall be made in the Loan Service Payment Currency specified In the Financing Agreement.
The amount of any Loan Service Payment shall be converted Into the Denomination Currency, if necessary, at the _rate applicable on the value date of payment in accordance with the provisions of Section 6.03.

Section 6.03.
Section 6.03.

Valuation of Currencies The rate of conversion from one currency to another, or from a currency to Special Drawing Rights, shall be the published rat~ of the International.Monetary Fund available to the Fund on the value date of payment' or withdrawal, as the case may be, or such other rate as the Fund may notify to the Borrower/Recipient.

ARTICLE VII - IMPLEMENTATION OF THE PROJECT Section 7.01.
Project Implementation (a) The Borrower and each of the Project Parties shall carry out the Project: (I) with due diligence and efficiency; (ii) in conformity with appropriate administrative, engineering, financial, economic, operational, environmental and agricultural development practices (including rural development practices) and good governance; (iii) in accordance with plans, design standards, specifications, procurement and work schedules and construction methods agreed by the Borrower/Recipient and the Fund; (Iv) in accordance with the provisions of the relevant Agreement, the AWPBs, and the Procurement Plan; (v) in accorda nce with the policies, criteria and regulations relating to agricultu ral development financing laid down from time to time by the Governing Council and Executive Board of the Fund; and (vi) so as to ensu re the sustainability of its achievements over time.
(b) (i) Projects shall be implemented on the basis of an Annual Workplan and Budget (AWPB).

The Lead Project Agency shall prepare a draft Project AWPB for each Project based, to the extent appropriate, on the draft AWPBs prepared by the various Project Parties.

Each draft Project AWPB shall include, among other things, a detailed description of planned Project activities during the coming Project Year, a Procurement Plan, and the sources and uses of funds.
(ii) Before each Project Year, the Lead Project Agency shall , if requ ired, submit the draft Project AWPB to t he oversight body designated by the Borrower/Recipient for its review.

When so reviewed, the Lead Project Agency shall submit the draft Project AWPB to the Fund for comments no later than sixty (60) days before the beginning of t he relevant Project Year.

If the Fund does not comment on the draft Project AWPB within thirty (30) days of receipt, the AWPB shall be deemed acceptable to the Fund.
18 I '.JI JI \. '

(iii) The Lead Project Agency shall adopt the Project AWPB in the form acc~pted by the Fund.

(iv) The Lead Project Agency may propose adjustments in the Project AWPB during the relevant Project Year, which shall become effective after acceptance by the Fund.

Section 7 .02.
Section 7 .02.

Availability of Financing Proceeds (a) The Borrower/Recipient shall make the proceeds of the Financing available to the Project Par:ties upon terms and conditions specified in the Financing Agreement or otherwise approved by the Fund for the purpose of carrying out the Project.
(b) The Financing Agreement may provicie that the Borrower/Recipient open and maintain (i) one or more Project Account(s) for Project operations in a bank acceptable to the Fund, and/or (ii) one or more Designated Account(s) to receive advances in accordance with Section 4.04(d).

The Borrower/Recipient shall ldentlfy the Project Party responsible for operating such account or accounts.
Unless otherwise specified in the Financing Agreement, such accounts, shall be operated In accordance with the applicable rules and .regulations of the Project Party responsible therefor.

Section 7.03.

Availability of Additional Resources In addition to the proceeds of the Financing, the Borrower/Recipient shall make available to the Project Parties such funds, facilities, services and other resources as may be required to carry out the Project in accordance with Section 7 .01.

Section 7 .04.
Section 7 .04.

Coordination of Activities In order to ensure that the Project is carried out in accordance with Section 7.01, the Borrower/Recipient shall ensure that the relevant activities of its ministries, departments and agencies, and those of each Project Party, are conducted and coordinated in accordance with sound administrative policies and procedures.

Section 7 .OS.
Section 7 .OS.

Procurement (a) Procurement of goods, works and services financed by the Financing shall be carried out in accordance with the provisions of the Borrower/Recipient's procurement regulations, to the extent such are consistent with the !FAD Procurement Guidelines.

Each Procurement Plan shall identify procedures which must be implemented by the Borrower/Recipient in order to ensure consistency with the IFAD Procurement Guidelines.
(b) By notice to the Borrower/Recipient, the Fund may require that all bidding · documents and contracts for procurement of goods, works and services financed by the Financing include provisions requ iring bidders, suppliers, contractors, sub contractors and consultants to: (i) allow full inspection by the Fund of all bid documentation and related record5i ( ii) maintain all documents and records related to the bid or contract for three years after completion of the bid or contract; and (iii) cooperate with agents or representatives of the Fund carrying out an audit or investigation .
19 Section 7.06.

Use of Goods and Services All goods, services and buildings financed by the Financing shall be used exclusively for the1purposes of the Project.

Section 7.07.

Maint enance 11 l The Borrower/Recipient shall ensure that all facilities and civil works used in connection with the Project shall at all times be properly operated and maintained and that all necessary repairs of such fa cilities shall be made promptly as needed.

Section 7.08.
Section 7.08.

Insurance (a), The Borrower/Recipient or the Lead Project Agency shall insure all goods and buildings used in the Project against such risks and in such amounts as shall be consistent with sound commercial practice .

.
.

(b) The Borrower/Recipient or the Lead Project Agency shall insure th e goods imported for the Project w hich are financed by the Financing against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation in accordance with sound commercial practice.

· Section 7.09.
· Section 7.09.

Subsidiary Agreements (a) The Borrower/Recipient shall ensure th at no Project Party shall enter into any Subsidiary Ag reement, or consent to any modification thereof, inconsistent w·ith the Financing Agreement or the Project Agreement.
(b) The Borrower/Recipient and each Project Party shall exercise its rights under any Subsidiary Agreement to which it is party to ensure that the interests of the Borrower/Recipient and the Fund are fu lly protected and th e Project is carried out in accordance with Section 7.0 1.

· (c) No provision of any Subsidiary Agreement to which the Borrower/Recipient is a party shall be assigned, waived , suspended, abrogated, a.mended or otherwise modified w ithout the prior consent of the Fund .
(d) The Borrower/Recipient shall bear any foreign exchange risk under any Subsidiary .

Agreement to wh ich it is party, unless otherwise agreed by the Fund.

Section 7.10.

Performance of the Agreements (a) The Borrower/Recipient shall be fully responsible to t he Fund for the due and timely performance of all obligations ascribed to it, the Lead Project Agency and all other Project Parties under any Agreement.
To the extent any Project Party enjoys legal personality separate from the Borrower/Recipient, any reference to an obligation of such Project Party in an Agreement shall be deemed an obligat_ion of the Borrower/Recipient to ensure that such Project Party performs such obligation.

The acceptance by any Project Party of any obligation ascribed to it in an Agreement shall not affect the responsibilities and obligations of the Borrower/Recipient.

(b)II'.'
(b)II'.'

The Borrower/Recipient shall take all necessary or appropriate action within its powers to ena ble and assist t he Lead Project Agency and any other Project Party to perform its _obligations under an Agreement.

The Borrower/Recipient shall not take, and shall not permit any third party to take, any action that would interfere with such perform ance.

; 20 e tlfy I ~ In ~ t Ible :nts l. Id, by I I ,or f Section 7.11.
Key Project Personnel The Borrower/Re_cipient or th e Lead Project Ag ency shall appoint t he Project D all other key ProJect personnel in the manner specified in the .A.greement or ot lrector approved by the Fund.

All key Project personnel shall have qualifications and herwise specified in the Agreement or otherwise approved by the Fund.

The Borrow e;Perlen' shall exercise best efforts to ensure continuity in key Project personnel t hro:/ h ec(ple Project Implementation Period.
The Borrower/Recipient or the Lead Proj ect Ag out the insure key Project personnel.

against health and accident risks to t he extent c~en':Y sh s 'tent with sound commercial practice or its customary practice in respect of Its natlon service, whichever is appropriate.

na clvll Section 7.12.


Project Parties Each Project Party shall, as required to carry out the Project in accordance with Section 7 .01: (a) promptly take all necessary or appropriate action to maintain its corporate ex istence and to acquire, maintain and renew its rights, properties, powers ' privileges and franchises; \.

(b) employ competent and ex perienced management and personnel; I U 1!
, (c) operate, maintain and replace its plant, equipment and other properties; and (d) not sell, lease or otherwise dispose of any of the Project's assets, except in the normal course of business or as agreed by the Fund.

Section 7.13.

Allocation of Project Resources The Borrower/Recipient and the Project Parties shall ensure that the resources and benefits of the Project, to the fullest extent practicable, are allocated among t he Target Population using gender disaggregated methods .

Section 7.14.
Section 7.14.

Environmental Factors \ The Borrower/Recipient and the Project Parties shall take all reasonable measures to ensure that the Prnject is carried out with due diligence in regard to environmental factors and in conformity w ith national env ironmental laws and any international treaties to which the Project Member State may be party.
In particular, the Project Parties shall maintain appropriate pest management practices under the Project and, to that end, shall comply with the principles of the International Code of Conduct on the Distribution and Use of Pesticides of the Food and Agriculture Organization of the United Nations (FAO), as amended, and ensure that pesticides procured under the Project do not include any pesticide formulation which would be classified as Extremely Hazardous (Class Ia) or Highly Hazardous (Class lb) accord ing to The WHO Recommended Classification of Pesticides by Hazard, as amended.
Section 7.15.

Relending Rates During the Project Implementation Period, the Borrower/Recipient and the Fund shall periodically review the interest rates applicable to any credits extended to members of the Target Population which are financed (directly or indirectly) by the Financing.

T~ese reviews shall be conducted jointly with the objective of reaching or maintaining poSitive interest rates over time.
The Borrower/Recipient shall take any appropriate measureS, h consistent with its policies and the Fund's policies, to athieve that objective.

Among sue measures, the Borrower/Recipient and eac~ Project Party extending such credits shall 21 - - -------- i I, I. J end~avour to minimise its costs.
For purposes of this Section, the term "positive interest rate" means, ·in respect of any credit extended by any Project Party, an interest rate which, after giving effect to inflation, permits such Project Party to recover its costs and achieve sustainability.

I Section 7.16.

Project Completion Tue Borrower/Recipient shall ensure that the Project Parties complete the implementation ofJ.b,e Project by the Project.Completion Date.
The Fund and the Borrower/Recipient shall agree on the disposition of the assets of the Project upon its completion.

AR~ICLE VIII - IMPLEMENTATION REPORTING AND INFORMATION Section 8.01.
Implementation Record~ The Borrower/Recipient shall ensure that the Project Parties maintain records and documents adequate to reflect their operations in implementing the Project (including, but not limited to, copies or originals of all correspondence, minutes of meetings and all documents relating to procurement) until the Project Completion Date, and shall retain such records and documents for at least ten (10) years thereafter.

Section 8.02.
Monitoring of Project Implementation The Lead Project Agency shall: (a) establish and thereafter maintain an appropriate information management system in accordance with the Fund's operational guidelines and Results Measurement Framework; (b) during the Project Implementation Period, gather all data and other relevant information (including any and all information requested by the Fund) necessary to monitor the progress of the implementation of the Project and the achievemen~ of its objectives; and (c) during the Project Implementation Period and for at least ten (10) years thereafter, adequately store such information, and, promptly upon request, make such information available to the Fund and its representatives and agents.
Section·S.03.

Progress Report and Mid-Term Reviews (a) The Lead Project Agency, or other party so designated in the relevant Agreement, · shall furnish to the Fund periodic progress reports on the Project, in such form and substance as the Fund shall reasonably request.
At a minimum, such reports shall address (i) quantitative and qualitative progress made in implementing the Project and achieving its objectives, (ii) problems encountered during the reporting period, (Iii) steps taken or proposed to be taken to remedy these problems, and (iv) the proposed programme of activi_ties and the progress expected during the following reporting period.
(b) If specified in an Agreement, the Lead Project Agency and the Fund shall jointly carry out a review of Project implementation no later than the midpoint of the Project Implementation Period (the "Mid-Term Review") based on terms of .reference prepared by the Lead Project Agency and approved by the Fund.
Among other things, the Mid-Term Review shall consider the achievement of Project objectives and the constraints thereon, and recommend such reorientation as may be required t o achieve such objectives and remove such constraints.

22 (c) The Borrower/Recipient shall ensure that the recommenda tions resulti Mid-Term Review are implemented within th e specified time t herefor an~ frorn the satisfaction of the Fund.
Such recommendations may result In modiflca~I to the Agreement or can cellation of the Financing.

ons to the Sect ion 8.04.

Completion Report As promptly as possible after the Project Completion Date but in any event no the Financing Closing Date, the Borrower/Recipient shall furnish to the Fund a ater than the overall implementation of the Project, in such form and substance as may ~eport on specified in the financing Agreement or as the Fund shall reasonably r equest.
A~ minimum, such report shall address (i) the costs and benefits of the Project (II) t~ achievement of its objectives, (iii) the performance by the Borrower/Recipl; nt thee Project Parties, the Fund of their respective obligations under the Ag reement, ~nd (iv) lessons learned from the foregoing.

1 Section 8 .05.

Plans a nd Schedules \..


The Project Parties shall furnish to the Fund promptly upon their preparation, such plans design standards, reports, contract documents, specifications and schedules relating to ' the Project, and any material modifi cations subsequently made th erein.

Section 8 .06.

Other I mplementation Reports and Infor mation.


In addition to th e reports and information required by the foregoing provisions of this Articl e: (a) The Borrower/Recipient and the Project Parties shall promptly furn ish t o. the Fund such other reports and information as the Fund shall reasonably request on any matter relat ing to the Project or any Project Party.
(b) The Borrow er/Recipient and the Project Parties shall promptly inform t he Fund of any condition that interferes w ith, or threatens to interfere with, th e implementation of th e Project or the achievement of its objectives.

In particular, the Borrower/Recipient and the Project Parties shall promptly notify the Fund of any allegations of fraud and/ or corruption th at are received in relation to any of the Project activities .

· \, _ ARTICLE IX - FI NA NCIAL REPORTING AN D INFORMATION Section 9.01.
Financial Records The Project Parties shall maintain separate accounts and re~ords in accordance with con sistently maintained appropriate accounting practices adequate to reflect the operations, r esources and ex penditures r elated to the Project until the Financing Closing Date, and shall retain such accounts and records for at least ten (10) y ears t hereafter.

Section 9 .02.
Section 9 .02.

Financial Statements The Borrower/ Recipient shall deliver to the Fund det ailed financial statem ents of the operations, resources and ex penditures related to the Project for each Fiscal Year prepared in accordance with standards and procedures acceptable to the Fund and deliver such financial statem ents to the Fund within four (4) months of the end of each Fiscal Year. '

23 - !he lhe an ~n s, Section 9.03.


Audit of Accounts The Borrower/Recipient shall: (a) each Fiscal Year, have the accounts relating to the Project audited in accordance with auditing standards acceptable to the Fund and the !FAD Guidelines on Project Audits by independent auditors acceptable to the Fund; (b) within six (6) months of the end of each Fiscal Year, furnish to the Fu:1d a certified copy of the audit report.
The Borrower/Recipient shall submit to the Fund the reply to the man_agement letter of the auditors within one month of receipt thereof; (c) If the Borrower/Recipient does not timely furnish any required audit report In satisfactory form and the Fund deterr:nines that the Borrower/Recipient is unlikely to do so within a reasonable period, the Fund may engage independent auditors of Its choice to audit the accounts relating to the Project.
The Fund may finance the cost of such audit by withdrawal from the Loan and/or Grant Accounts.

Section 9.04.

Other Financial Reports and Information In addition to the reports and information required by the foregoing provisions of this Article: (a) The Borrower/Recipient and the Project Parties shall promptly furnish to the Fund such other reports and Information as the Fund shall reasonably request on any financial matter relating to the Financing or the Project or any Project Party.
(b) The Borrower/ Recipient and the Guarantor shall promptly inform the Fund of any condition that interferes with, or threatens to interfere with, the maintenance of Loan Service Payments.

(c) The Project Member state shal~ promptly furn ish to the Fund all information that the Fund may reasonably request w ith respect to financial and economic conditions In Its territory, including its balance of payments and its ex ternal debt.

ARTICLE X - COOP ERATION Section 10.01.


Cooperation, Generally The Fund, the Cooperating Institution and each Project Party shall cooperate fully to ensure that the objectives of the Project are achieved.

Section 10.02.

Exchange of Views The Fund, the Borrower/Recipient and the Lead Proj ect Agency shall, from t ime to time at the request of any one of them, exchange views on the Project, the Financing, or any Project Party.

Section 10.03.
Section 10.03.

Visits, I nspections and Enquiries The Borrower/Recipient and the Project Parties shall enable agents and representatives of the Fund from tim e to time to: · (a) visit and inspect the Project, including any and all sites, works, equipment and other goods used for Project-related purposes; 24