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CONFORMED COPY
CREDIT NUMBER 3461-ET
Development Credit Agreement
(Conservation and Sustainable Use of Medicinal Plants Project)
between
FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA
and
INTERNATIONAL DEVELOPMENT ASSOCIATION
Dated April 16, 2001
CREDIT NUMBER 3461-ET
DEVELOPMENT CREDIT AGREEMENT
AGREEMENT, dated April 16, 2001, between FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA 
(the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association).
WHEREAS (A) the Borrower, having satisfied itself as to the feasibility and 
priority of the Project described in Schedule 2 to this Agreement, has requested the 
Association to assist in the financing of the Project;
(B)
the Borrower has also requested the International Bank for Reconstruction 
and Development (the Bank), acting as an implementing agency of the Global Environment 
Facility (GEF), to provide additional financing towards the financing of the Project 
and, by an agreement of even date herewith between the Borrower and the Bank, the Bank 
is agreeing to provide such assistance in an aggregate principal amount equivalent to 
one million four hundred thousand Special Drawing Rights (SDR 1,400,000) ( the GEF 
Trust Fund Grant); and
WHEREAS the Association has agreed on the basis, inter alia, of the foregoing, 
to extend the Credit to the Borrower upon the terms and conditions set forth in this 
Agreement; 
NOW THEREFORE the parties hereto hereby agree as follows:
ARTICLE I
General Conditions; Definitions
Section 1.01. The "General Conditions Applicable to Development Credit 
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Agreements" of the Association, dated January 1, 1985, (as amended through October 6, 
1999) (the General Conditions) constitute an integral part of this Agreement:
(a)
A new paragraph (12) is added to Section 2.01 to read as set forth below, 
and the existing paragraphs (12) through (14) of said Section are accordingly 
renumbered as paragraphs (13) through (15):
"12.
‘Participating Country’ means any country that the Association 
determines meets the requirements set forth in Section 10 of Resolution No. 
183 of the Board of Governors of the Association, adopted on June 26, 1996; 
and ‘Participating Countries’ means, collectively, all such countries."
(b)
The second sentence of Section 5.01 is modified to read:
"Except as the Borrower and the Association shall otherwise agree, no 
withdrawals shall be made: (a) on account of expenditures in the territories 
of any country which is not a Participating Country or for goods produced in, 
or services supplied from, such territories; or (b) for the purpose of any 
payment to persons or entities, or for any import of goods, if such payment or 
import, to the knowledge of the Association, is prohibited by a decision of 
the United Nations Security Council taken under Chapter VII of the Charter of 
the 
United Nations."
Section 1.02. Unless the context otherwise requires, the several terms defined 
in the General Conditions and in the Preamble to this Agreement have the respective 
meanings therein set forth, and the following additional terms have the following 
meanings:
(a)
"BIRR" means the currency of the Borrower;
(b)
"Collaborating Institution" means, in addition to IBCR (as hereinafter 
defined), any of the following: the Department of Drug Research within the Ethiopian 
Health and Nutrition Institute, School of Pharmacy, Faculty of Veterinary Medicine, 
National Herbarium and Department of Biology, Natural Products Chemistry and Faculty 
of Medicine of the Addis Ababa University, Institute of Development Research, Natural 
Products Chemistry, Oromiya Agriculture Bureau, Ethiopian Wildlife Conservation 
Organization, Essential Oils Research Center ESTC and THA;
(c)
"EPA" means the Borrower’s Environmental Protection Authority, 
established and operating pursuant to Proclamation No. 9/1995;
(d)
"ESTC" means the Ethiopian Science and Technology Commission, established 
and operating pursuant to Proclamation No. 91/1994;
(e)
"FY" means the Fiscal Year of the Borrower, commencing July 8 and ending 
July 7;
(f)
"IBCR" means the Borrower’s Institute of Biodiversity Conservation and 
Research established and operating pursuant to Proclamation No. 120/1998;
(g)
"MOU" means the Memorandum of Understanding to be entered into between 
IBCR and the Collaborating Institutions setting out the modalities for implementing 
the Project;
(h)
"PCMU" means the Project Coordinating and Monitoring Unit within IBCR 
referred to in paragraph 2 of Schedule 4 to this Agreement;
(i)
"PIC" means the Project Implementation Committee referred to in paragraph 
3 of Schedule 4 to this Agreement;
(j)
"PIM" means the Project Implementation Manual, adopted by the Borrower 
containing, inter alia, guidelines and procedures to be used for the purpose of 
implementation of the Project, including financial, accounting, procurement and 
disbursement procedures, as may be amended from time to time in consultation with the 
Association, and such term includes any schedules to the PIM;
(k)
"PIP" means the Project Implementation Plan referred to in paragraph 1 of 
Schedule 4 this Agreement;
(l)
"Project Management Report" means each report prepared in accordance with 
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Section 4.02 (a) of this Agreement;
(m)
"Special Account" means the account referred to in Section 2.02 (b) of 
this Agreement; and
(n)
"THA" means the Traditional Healers Association within the Borrower’s 
territory.
ARTICLE II
The Credit
Section 2.01. The Association agrees to lend to the Borrower, on the terms and 
conditions set forth or referred to in the Development Credit Agreement, an amount in 
various currencies equivalent to two million Special Drawing Rights (SDR 2,000,000).
Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit 
Account in accordance with the provisions of Schedule 1 to this Agreement for 
expenditures made (or, if the Association shall so agree, to be made) in respect of 
the reasonable cost of goods and services required for the Project described in 
Schedule 2 to this Agreement and to be financed out of the proceeds of the Credit.
(b)
The Borrower may, for the purposes of  the Project, open and maintain in 
Dollars a special deposit account in the National Bank of Ethiopia on terms and 
conditions satisfactory to the Association, including appropriate protection against 
set-off, seizure or attachment. Deposits into, and payments out of, the Special 
Account shall be made in accordance with the provisions of Schedule 5 to this 
Agreement.
(c)
Promptly after the Effective Date, the Association shall, on behalf of 
the Borrower, withdraw from the Credit Account and pay to itself the amount required 
to repay the principal amount of the Project Preparation Advance withdrawn and 
outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn 
balance of the authorized amount of the Project Preparation Advance shall thereupon be 
canceled.
Section 2.03. The Closing Date shall be December 31, 2005, or such later date as 
the Association shall establish. The Association shall promptly notify the Borrower of 
such later date.
Section 2.04. (a) The Borrower shall pay to the Association a commitment charge 
on the principal amount of the Credit not withdrawn from time to time at a rate to be 
set by the Association as of June 30 of each year, but not to exceed the rate of 
one-half of one percent (1/2 of 1%) per annum.
(b)
The commitment charge shall accrue: (i) from the date sixty days after 
the date of this Agreement (the accrual date) to the respective dates on which amounts 
shall be withdrawn by the Borrower from the Credit Account or canceled; and (ii) at 
the rate set as of the June 30 immediately preceding the accrual date and at such 
other rates as may be set from time to time thereafter pursuant to paragraph (a) 
above. The rate set as of June 30 in each year shall be applied from the next date in 
that year specified in Section 2.06 of this Agreement.
(c)
The commitment charge shall be paid: (i) at such places as the 
Association shall reasonably request; (ii) without restrictions of any kind imposed 
by, or in the territory of, the Borrower; and (iii) in the currency specified in this 
Agreement for the purposes of Section 4.02 of the General Conditions or in such other 
eligible currency or currencies as may from time to time be designated or selected 
pursuant to the provisions of that Section.
Section 2.05. The Borrower shall pay to the Association a service charge at the 
rate of three-fourths of one percent (3/4 of 1%) per annum on the principal amount of 
the Credit withdrawn and outstanding from time to time.
Section 2.06. Commitment charges and service charges shall be payable 
semiannually on February 1 and August 1 in each year.
Section 2.07. (a) Subject to paragraphs (b), (c) and (d) below, the Borrower 
shall repay the principal amount of the Credit in semiannual installments payable on 
each February 1 and August 1 commencing August 1, 2011 and ending February 1, 2041. 
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Each installment to and including the installment payable on February 1, 2021 shall be 
one percent (1%) of such principal amount, and each installment thereafter shall be 
two percent (2%) of such principal amount. 
(b)
Whenever: (i) the Borrower’s per capita gross national product (GNP), as 
determined by the Association, shall have exceeded for three consecutive years the 
level established annually by the Association for determining eligibility to access 
the Association’s resources; and (ii) the Bank shall consider the Borrower 
creditworthy for Bank lending, the Association may, subsequent to the review and 
approval thereof by the Executive Directors of the Association and after due 
consideration by them of the development of the Borrower's economy, modify the 
repayment of installments under paragraph (a) above by: (A) requiring the Borrower to 
repay twice the amount of each such installment not yet due until the principal amount 
of the Credit shall have been repaid; and (B) requiring the Borrower to commence 
repayment of the principal amount of the Credit as of the first semiannual payment 
date referred to in paragraph (a) above falling six months or more after the date on 
which the Association notifies the Borrower that the events set out in this paragraph 
(b) have occurred, provided, however, that there shall be a grace period of a minimum 
of five years on such repayment of principal.
(c)
If so requested by the Borrower, the Association may revise the 
modification referred to in paragraph (b) above to include, in lieu of some or all of 
the increase in the amounts of such installments, the payment of interest at an annual 
rate agreed with the Association on the principal amount of the Credit withdrawn and 
outstanding from time to time, provided that, in the judgment of the Association, such 
revision shall not change the grant element obtained under the above-mentioned 
repayment modification.
(d)
If, at any time after a modification of terms pursuant to paragraph (b) 
above, the Association determines that the Borrower's economic condition has 
deteriorated significantly, the Association may, if so requested by the Borrower, 
further modify the terms of repayment to conform to the schedule of installments as 
provided in paragraph (a) above.
Section 2.08. The currency of the United States of America is hereby specified 
for the purposes of Section 4.02 of the General Conditions.
ARTICLE III
Execution of the Project
Section 3.01. (a) The Borrower declares its commitment to the objectives of the 
Project as set forth in Schedule 2 to this Agreement and, to this end, shall carry out 
Parts A and B of the Project through IBCR with due diligence and efficiency and in 
conformity with appropriate administrative, financial and conservation practices and 
with due regard to environmental practices, and shall provide, promptly as needed, the 
funds, facilities, services and other resources required for the Project.
(b)
Without limitation upon the provisions of paragraph (a) of this Section 
and except as the Borrower and the Association shall otherwise agree, the Borrower 
shall carry out the Project in accordance with the Implementation Program set forth in 
Schedule 4 to this Agreement.
Section 3.02. Except as the Association shall otherwise agree, procurement of 
the goods, works and consultants’ services required for the Project and to be financed 
out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to 
this Agreement.
Section 3.03. Without limitation upon the provisions of Section 3.01 of this 
Agreement, the Borrower shall:
(a)
open and thereafter maintain, until completion of the Project, an account 
(the Project Account) in the National Bank of Ethiopia on terms and conditions 
acceptable to the Association;
(b)
deposit into the Project Account an initial amount of $60,000 equivalent, 
the Borrower’s estimated share of counterpart funds for the first quarter of Project 
implementation, as shall be agreed upon by the Borrower and the Association and 
thereafter, on October 31, January 31, April 30 and July 31 each FY, deposit into the 
Project Account such amounts as estimated to be required for the ensuing quarter as 
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shall be agreed upon between the Borrower and the Association; and
(c)
ensure that the amounts deposited into the Project Account, in accordance 
with paragraphs (a) and (b) of this Section, shall be used exclusively for 
expenditures under the Project and not otherwise financed out of the proceeds of the 
Credit.
Section 3.04. For the purposes of Section 9.07 of the General Conditions and 
without limitation thereto, the Borrower shall:
(a)
prepare, on the basis of guidelines acceptable to the Association, and 
furnish to the Association not later than six (6) months after the Closing Date or 
such later date as may be agreed for this purpose between the Borrower and the 
Association, a plan designed to ensure the sustainability and potential replicability 
of the Project; and
(b)
afford the Association a reasonable opportunity to exchange views with 
the Borrower on said plan.
ARTICLE IV
Financial Covenants
Section 4.01. (a) The Borrower shall maintain a financial management system, 
including records and accounts, and prepare financial statements in a format 
acceptable to the Association, adequate to reflect the operations, resources and 
expenditures related to the Project.
(b)
The Borrower shall:
(i)
have the records, accounts and financial statements referred to in 
paragraph (a) of this Section and the records and accounts for the 
Special Account for each fiscal year audited, in accordance with 
auditing standards acceptable to the Association, consistently 
applied, by independent auditors acceptable to the Association;
(ii)
furnish to the Association as soon as available, but in any case 
not later than six months after the end of each such year, (A) 
certified copies of the financial statements referred to in 
paragraph (a) of this Section for such year as so audited, and (B) 
an opinion on such statements, records and accounts and report of 
such audit, by 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 such 
records and accounts, and the audit thereof, and concerning said 
auditors, as the Association may from time to time reasonably 
request.
(c)
For all expenditures with respect to which withdrawals from the Credit 
Account were made on the basis of statements of expenditure, the Borrower shall:
(i)
maintain or cause to be maintained, in accordance with paragraph 
(a) of this Section, records and separate accounts reflecting such 
expenditures;
(ii)
retain, until at least one year after the Association has received 
the audit report for the fiscal year in which the last withdrawal 
from the Credit Account was made, all records (contracts, orders, 
invoices, bills, receipts and other documents) evidencing such 
expenditures;
(iii)
enable the Association’s representatives to examine such records; 
and
(iv)
ensure that such records and accounts are included in the annual 
audit referred to in paragraph (b) of this Section and that the 
report of such audit contains a separate opinion by said auditors 
as to whether the statements of expenditure submitted during such 
fiscal year, together with the procedures and internal controls 
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involved in their preparation, can be relied upon to support the 
related withdrawals.
Section 4.02. (a) Without limitation upon the provisions of Section 4.01 of this 
Agreement, the Borrower shall carry out a time-bound action plan acceptable to the 
Association for the strengthening of its financial management system for the Project 
in order to enable the Borrower, not later than 18 months after the Effectiveness 
Date, or such later date as the Association shall agree, to prepare quarterly Project 
Management Reports, acceptable to the Association, each of which:
(i) 
(A) sets forth actual sources and applications of funds for the 
Project, both cumulatively and for the period covered by said 
report, and projected sources and applications of funds for the 
Project for the six-month period following the period covered by 
said report, and (B) shows separately expenditures financed out of 
the proceeds of the Credit during the period covered by said 
report and expenditures proposed to be financed out of the 
proceeds of the Credit during the six-month period following the 
period covered by said report;
(ii)
(A) describes physical progress in Project implementation, both 
cumulatively and for the period covered by said report, and (B) 
explains variances between the actual and previously forecast 
implementation targets; and
(iii) sets forth the status of procurement under the Project and 
expenditures under contracts financed out of the proceeds of the 
Credit, as at the end of the period covered by said report.
(b)
Upon the completion of the action plan referred to in paragraph (a) of 
this Section, the Borrower shall prepare, in accordance with guidelines acceptable to 
the Association, and furnish to the Association not later than 45 days after the end 
of each calendar quarter, a Project Management Report for such period.
ARTICLE V
Effective Date; Termination
Section 5.01. The following events are specified as additional conditions to the 
effectiveness of the Credit Agreement within the meaning of Section 12.01 (c) of the 
General Conditions:
(a)
the Borrower has opened the Project Account referred to in Section 3.03 
(a) of this Agreement and deposited therein the amount referred to in Section 3.03 (b) 
of this Agreement;
(b)
the Borrower has established a financial management and accounting system 
for the Project, satisfactory to the Association;
(c)
the Borrower has adopted the PIM and PIP, in form and substance 
satisfactory to the Association; 
(d)
the MOU has been signed by IBCR and the Collaborating Institutions; 
(e)
the Borrower has appointed the committee of experts referred to in 
paragraph 7 of Schedule 4 to this Agreement, with qualifications and experience 
satisfactory to the Association; 
(f)
all conditions precedent to the effectiveness of the GEF Trust Fund Grant 
of even date herewith between the Recipient and the Association shall have been 
fulfilled, except the effectiveness of this Agreement; and 
(g)
the Borrower shall prepare and furnish to the Association the work 
program for the first fiscal year of Project implementation.
Section 5.02. The date ninety (90) days after the date of this Agreement is 
hereby specified for the purposes of Section 12.04 of the General Conditions.
ARTICLE VI
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Representative of the Borrower; Addresses
Section 6.01. The Minister of the Borrower at the time responsible for finance 
is designated as representative of the Borrower for the purposes of Section 11.03 of 
the General Conditions.
Section 6.02. The following addresses are specified for the purposes of Section 
11.01 of the General Conditions:
For the Borrower:
Minister of Finance
Ministry of Finance
P.O. Box 1905
Addis Ababa, Ethiopia
Cable Address
Telex:
Facsimile:
MINFIN
21147
(251-1) 551355
For the Association:
International Association for
  Reconstruction and Development
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address:
Telex:
Facsimile
INTBAFRAD
248423 (MCI) or
(202) 477 6391
Washington, D.C.
 64145 (MCI)
IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized 
representatives, have caused this Agreement to be signed in their respective names in 
the District of Columbia, United States of America, as of the day and year first above 
written.
FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA
By /s/ Tadelle Teferra
Authorized Representative
INTERNATIONAL DEVELOPMENT ASSOCIATION
By /s/ Pamela Cox
Acting Regional Vice President
Africa
SCHEDULE 1
Withdrawal of the Proceeds of the Credit
1.
The table below sets forth the Categories of items to be financed out of the 
proceeds of the Credit, the allocation of the amounts of the Credit to each Category 
and the percentage of expenditures for items so to be financed in each Category:
Amount of the
Credit Allocated
   % of
(Expressed in Expenditures
Category
SDR Equivalent)
to be Financed
(1)
Vehicles,
    730,000
100% of foreign
equipment,
expenditures and
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furniture and
85% of local
materials
expenditures
(2)
Consultants’
    820,000
100%
services, training
and studies
(3)
Incremental
    210,000
80%
operating
costs
(4)
Refunding of
     70,000
Amounts due
Project Preparation
pursuant to 
Advance
Section 2.02 (c)
of this Agreement
(5)
Unallocated
    170,000
TOTAL
  2,000,000
2.
For the purposes of this Schedule:
(a)
the term "foreign expenditures" means expenditures in the currency of any 
country other than that of the Borrower for goods or services supplied from the 
territory of any country other than that of the Borrower; 
(b)
the term "local expenditures" means expenditures in the currency of the 
Borrower or for goods or services supplied from the territory of the Borrower; and
(c)
"Incremental operating costs" means the incremental expenses incurred on 
account of Project implementation, management, monitoring and auditing, including 
office supplies, vehicle and equipment operation, transportation, travel, per diem and 
supervision costs, but excluding salaries of officials of the Borrower’s civil 
service.
3.
Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be 
made in respect of payments made for expenditures prior to the date of this Agreement.
4.
The Association may require withdrawals from the Credit Account to be made on 
the basis of statements of expenditure for expenditures for services under contracts 
costing less than $50,000 equivalent each for individual consultants and $100,000 
equivalent each for goods and consulting firms as well as for all operating costs and 
training, under such terms and conditions as the Association shall specify by notice 
to the Borrower.
SCHEDULE 2
Description of the Project
The objectives of the Project are to initiate support for the conservation, 
management and sustainable utilization of medicinal plants for human and livestock 
healthcare through: (i) strengthening of institutional capacity for the conservation, 
management and sustainable utilization of medicinal plants in the Borrower’s 
territory; (ii) identification and documentation of selected commonly used/indigenous 
medicinal plants used for the treatment of major human diseases with emphasis on the 
following three: tapeworm infections, bronchopneumonia and hypertension, and livestock 
diseases with emphasis on the following three: tapeworm infections, mastitis and 
dermatophilosis; (iii) initiation of studies for the safe utilization of effective 
medicinal plant remedies and the compilation of a medicinal plant database; and (iv) 
promotion of in-situ management and sustainable utilization of medicinal plants in and 
around a site of global significance, the Bale Mountains National Park. 
The Project consists of the following parts, subject to such modifications 
thereof as the Borrower and the Association may agree upon from time to time to 
achieve such objectives:
Part A:
Institutional Strengthening, Human Resource Development and 
Project Monitoring and Evaluation
1.
Strengthening the institutional capacity of IBCR through the provision of 
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technical advisory services and training of staff.
2.
Development of the human resource capacity of the Collaborating Institutions for 
implementing activities under the Project.
3.
Establishment of a medicinal plant field gene bank in collaboration with 
traditional healers and other Collaborating Institutions.
4.
Development of an intellectual property rights policy and guidelines for sharing 
traditional knowledge of medicinal plants.
5.
Establishment and operation of PCMU.
Part B:
Studies, Research and Database Development
1.
Carrying out studies on methods to collect, analyze and interpret quantitative 
data on the socioeconomic benefits derived from medicinal plants used in human and 
livestock healthcare on a national level.
2.
Carrying out ethnomedical surveys to explore utilization of medicinal plants and 
traditional healthcare practices for the prevention of HIV and mitigation of the 
adverse impact of AIDS.
3.
Carrying out research on propagation and cultivation methods of selected 
indigenous medicinal plants for human and livestock diseases.
4.
Carrying out formulation studies on extraction, standardization, safety and 
efficacy, and dosage testing and formulation of phytomedicines for three human and 
three livestock diseases.
5.
Identification, documentation and development of a national database of 
indigenous medicinal plants.
Part C:
In-situ Conservation and Sustainable Use in Bale Mountains National 
Park
1.
Carrying out: (a) a detailed socioeconomic survey to: (i) identify 
villages/users having the greatest impact on wild populations of medicinal plants 
through harvesting and other activities, and (ii) identify villages/farmers for 
on-farm pilot propagation and cultivation trials of medicinal plants to remove 
pressure on wild populations; (b) an in-depth biological survey and assessment of 
in-situ and ex-situ conservation; and (c) zoning of key areas within the Bale Mountain 
National Park and strengthening of its management.
2.
Development and implementation of appropriate management options and guidelines 
for sustainable levels of harvesting of medicinal plants and/or their products, 
including the development of a comprehensive biodiversity monitoring and evaluation 
system through the provision of technical advisory services and training.
3.
Carrying out a monitoring exercise to assess: (a) the impact of harvesting of 
medicinal plants in permit areas; (b) the impact of harvesting guidelines and 
management interventions in the Park; (c) Project interventions in protecting 
threatened/rare medicinal plant species; and (d) market and traditional health 
practitioner surveys to determine levels of use locally and nationally of plants 
harvested from the Bale Mountains National Park.
4.
Carrying out pilot farmer-based cultivation trials for a selected number of 
threatened and indigenous species in home gardens and boundary and buffer zones of the 
Bale Mountains National Park to supply local needs and to provide alternative income 
generation.
5.
Provision of training for: (a) park administrative and technical staff in the 
conservation, management and monitoring of medicinal plants within the park and 
adjacent forests; and (b) farmers for pilot propagation and cultivation trials.
6.
Carrying out education and mass awareness campaigns on the relevance of 
conservation and management programs of medicinal plants and their importance to the 
Borrower’s bio-diversity and long-term healthcare needs.
* * *
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The Project is expected to be completed by June 30, 2005.
SCHEDULE 3
Procurement
Section I.
Procurement of Goods and Works
Part A:
General
1.
Goods shall be procured in accordance with the provisions of Section I of the 
Guidelines for Procurement under IBRD Credits and IDA Credits" published by the 
Association in January 1995 and revised in January and August 1996, September 1997 and 
January 1999 (the Guidelines) and the following provisions of Section I of this 
Schedule.
2.
In paragraphs 1.6 and 1.8 of the Guidelines, the references to "Bank member 
countries" shall be deemed to be references, respectively, to "Participating 
Countries" and "Participating Country".
Part B:
International Competitive Bidding
1.
Except as otherwise provided in Part C of this Section, goods shall be procured 
under contracts awarded in accordance with the provisions of Section II of the 
Guidelines and paragraph 5 of Appendix 1 thereto.
2
The following provisions shall apply to goods and works to be procured under 
contracts awarded in accordance with the provisions of paragraph 1 of this Part B:
(a)
Grouping of Contracts
To the extent practicable, contracts for goods shall be grouped in bid packages 
estimated to cost $100,000 equivalent or more each.
(b)
Preference for Domestically Manufactured Goods 
The provisions of paragraph 2.54 and 2.55 of the Guidelines and Appendix 2 
thereto shall apply to goods manufactured in the territory of the Borrower.
Part C:
Other Procurement Procedures 
1.
National Competitive Bidding
Goods estimated to cost less than $100,000 equivalent per contract, up to an 
aggregate amount not to exceed $600,000 equivalent, may be procured under contracts 
awarded in accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines.
2.
National Shopping
Goods which are estimated to cost less than $50,000 equivalent per contract, up 
to an aggregate amount not to exceed $300,000 equivalent, may be procured under 
contracts awarded on the basis of national shopping procedures in accordance with the 
provisions of paragraphs 3.5 and 3.6 of the Guidelines.
Part D:
Review by the Association of Procurement Decisions
1.
Procurement Planning
Prior to the issuance of any invitations to bid for contracts, the proposed 
procurement plan for the Project shall be furnished to the Association for its review 
and approval, in accordance with the provisions of paragraph 1 of Appendix 1 to the 
Guidelines. Procurement of all goods and works shall be undertaken in accordance with 
such procurement plan as shall have been approved by the Association, and with the 
provisions of said paragraph 1.
2.
Prior Review
(a)
With respect to each contract for goods estimated to cost the equivalent 
of $50,000 or more, the procedures set forth in paragraphs 2 and 3 of Appendix 1 to 
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the Guidelines shall apply.
(b)
With respect to each contract for goods and works to be procured in 
accordance with the procedures referred to in Part C.2 above, and estimated to cost 
the equivalent of $50,000 or less, the following procedures shall apply:
(i)
prior to the selection of any supplier under National Shopping 
procedures, the Borrower shall provide to the Association a report 
on the comparison and evaluation of quotations received from at 
least three (3) local suppliers;
(ii)
prior to the execution of any contract procured under National 
Shopping procedures, the Borrower shall provide to the Association 
a copy of the specifications and the draft contract; and
(iii)
the procedures set forth in paragraphs 2 (f), 2 (g) and 3 of 
Appendix 1 to the Guidelines shall apply.
3.
Post Review
With respect to each contract not governed by paragraph 2 of this Part, the 
procedures set forth in paragraph 4 of Appendix 1 to the Guidelines shall apply.
Section II.
Employment of Consultants
Part A:
General
1.
Consultants’ services shall be procured in accordance with the provisions of the 
Introduction and Section IV of the "Guidelines:  Selection and Employment of 
Consultants by World Association Borrowers" published by the Association in January 
1997 and revised in September 1997 and January 1999 (the Consultant Guidelines) and 
the following provisions of Section II of this Schedule.
2.
In paragraph 1.10 of the Consultant Guidelines, the references to "Bank member 
countries" and "member country" shall be deemed to be references, respectively, to 
"Participating Countries"” and "Participating Country".
Part B:
Quality- and Cost-Based Selection
1.
Except as otherwise provided in Part C of this Section, consultants’ services 
shall be procured under contracts awarded in accordance with the provisions of Section 
II of the Consultant Guidelines, paragraph 3 of Appendix 1 thereto, Appendix 2 
thereto, and the provisions of paragraphs 3.13 through 3.18 thereof applicable to 
quality- and cost-based selection of consultants.
2.
The following provisions shall apply to consultants’ services to be procured 
under contracts awarded in accordance with the provisions of the preceding paragraph.  
The shortlist of consultants for services estimated to cost less than $50,000 
equivalent per contract, may comprise entirely national consultants in accordance with 
the provisions of paragraph 2.7 of the Consultant Guidelines.
Part C:
Other Procedures for the Selection of Consultants 
1.
Least-Cost Selection
Services for audit and advisory services estimated to cost less than $50,000 
equivalent per contract may be procured under contracts awarded in accordance with the 
provisions of paragraphs 3.1 and 3.6 of the Consultant Guidelines.
2.
Selection Based on Consultants’ Qualifications
Services for technical and logistical support to producers’ groups for 
propagation and multiplication of cultivation trials of medicinal plants, 
bio-diversity conservation, feasibility studies, and extension, estimated to cost less 
than $50,000 equivalent per contract may be procured under contracts awarded in 
accordance with the provisions of paragraphs 5.1 and 5.3 of the Consultant Guidelines.
3.
Individual Consultants
Services for tasks that meet the requirements set forth in paragraph 5.1 of the 
Consultant Guidelines shall be procured under contracts awarded to individual 
consultants, in accordance with the provisions of paragraphs 5.1 through 5.3 of the 
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Consultant Guidelines.
Part D:
Review by the Association of the Selection of Consultants
1.
Selection Planning
Prior to the issuance to consultants of any requests for proposals, the proposed 
plan for the selection of consultants under the Project shall be furnished to the 
Association for its review and approval, in accordance with the provisions of 
paragraph 1 of Appendix 1 to the Consultant Guidelines.  Selection of all consultants’ 
services shall be undertaken in accordance with such selection plan as shall have been 
approved by the Association, and with the provisions of said paragraph 1.
2.
Prior Review
(a)
With respect to each contract for the employment of consulting firms 
estimated to cost the equivalent of $100,000 or more, the procedures set forth in 
paragraphs 1, 2 (other than the third subparagraph of paragraph 2 (a)) and 5 of 
Appendix 1 to the Consultant Guidelines shall apply.
(b)
With respect to each contract for the employment of individual 
consultants estimated to cost the equivalent of $50,000 or more, the qualifications, 
experience, terms of reference and terms of employment of the consultants shall be 
furnished to the Association for its prior review and approval.  The contract shall be 
awarded only after the said approval shall have been given.
3.
Post Review
With respect to each contract not governed by paragraph 2 of this Part, the 
procedures set forth in paragraph 4 of Appendix 1 to the Consultant Guidelines shall 
apply.
SCHEDULE 4
Implementation Program
1.
Except as the Association shall otherwise agree, the Borrower shall carry out 
the Project in accordance with the provisions of the PIM and PIP. Such PIM and PIP 
shall not be amended or waived, in whole or in part, in a manner which in the opinion 
of the Association, would materially and adversely affect the execution of the Project 
or the achievement of its objectives.
2.
The Borrower shall establish and maintain, until completion of the Project, a 
PCMU, which will be staffed with a full time Project Coordinator (PC) to coordinate 
Project activities. The PC will be assisted by (i) an accounting and disbursement 
specialist, (ii) a monitoring and evaluation specialist, (iii) a procurement 
specialist, and (iv) adequate administrative staff, all with terms of reference and 
qualifications satisfactory to the Association.
3.
The Borrower shall maintain, until completion of the Project, the PIC to provide 
guidance to the PCMU in Project implementation. The PIC shall be chaired by the 
General Manager of IBCR, with the Heads of Departments of Collaborating Institutions 
and a representative from EPA as members.
4.
IBCR shall enter into an MOU satisfactory to the Association with the 
Collaborating Institutions providing modalities for interactions between IBCR and the 
Collaborating Institutions.
5.
The Borrower shall:
(a)
maintain policies and procedures adequate to enable it to monitor and 
evaluate on an ongoing basis, in accordance with the indicators set forth in Schedule 
6 to this Agreement, the carrying out of the Project and the achievement of the 
objectives thereof;
(b)
prepare, under terms of reference satisfactory to the Association, and 
furnish to the Association, on or about September 30 and March 31, a report 
integrating the results of the monitoring and evaluation activities performed pursuant 
to paragraph (a) of this Section, on the progress achieved in the carrying out of the 
Project during the period preceding the date of said report and setting out the 
measures recommended to ensure the efficient carrying out of the Project and the 
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achievement of the objectives thereof during the period following such date; and
(c)
review with the Association, by October 31 and April 30, or such later 
date as the Association shall request, the report referred to in paragraph (b) of this 
Section, and, thereafter, take all measures required to ensure the efficient 
completion of the Project and the achievement of the objectives thereof, based on the 
conclusions and recommendations of the said report and the Association’s views on the 
matter.
6.
The Borrower shall: 
(a)
not later than December 31, 2002, carry out jointly with the Association 
a mid-term review. Such review shall assess the following: (i) the overall progress in 
the implementation of the Project; (ii) the results of the monitoring and evaluation 
activities; and (iii) the replicability of Project activities to other areas of the 
Borrower’s territory;
(b)
three months before such review, prepare and furnish to the Association, 
in scope and detail satisfactory to the Association, reports needed to undertake the 
review, including the preparation of a program of action to deal with potential 
deficiencies in the Project implementation identified prior to such review; and
(c)
based on such review, promptly prepare an action plan, satisfactory to 
the Association, for the further implementation of the Project, and shall thereafter 
implement such action plan.
7.
The Borrower shall appoint and maintain at all times during Project 
implementation, a committee of experts, with qualifications and experience 
satisfactory to the Association, to review the implementation and management of Part C 
of the Project.
SCHEDULE 5
Special Account
1.
For the purposes of this Schedule:
(a)
the term "eligible Categories" means Categories (1) through (3) set forth 
in the table in paragraph 1 of Schedule 1 to this Agreement in respect of Parts A and 
B of the Project;
(b)
the term "eligible expenditures" means expenditures in respect of the reasonable 
cost of goods and services required for Parts A and B of the Project and to be 
financed out of the proceeds of the Credit allocated from time to time to the eligible 
Categories in accordance with the provisions of Schedule 1 to this Agreement; and
(c)
the term "Authorized Allocation" means an amount equivalent to $200,000 to be 
withdrawn from the Credit Account and deposited into the Special Account pursuant to 
paragraph 3 (a) of this Schedule, provided, however, that unless the Association shall 
otherwise agree, the Authorized Allocation shall be limited to an amount equivalent to 
$100,000 until the aggregate amount of withdrawals from the Credit Account plus the 
total amount of all outstanding special commitments entered into by the Association 
pursuant to Section 5.02 of the General Conditions shall be equal to or exceed the 
equivalent of SDR 500,000.
2.
Payments out of the Special Account shall be made exclusively for eligible 
expenditures in accordance with the provisions of this Schedule.
3.
After the Association has received evidence satisfactory to it that the Special 
Account has been duly opened, withdrawals of the Authorized Allocation and subsequent 
withdrawals to replenish the Special Account shall be made as follows:
(a)
For withdrawals of the Authorized Allocation, the Borrower shall furnish 
to the Association a request or requests for deposit into the Special Account of an 
amount or amounts which do not exceed the aggregate amount of the Authorized 
Allocation. On the basis of such request or requests, the Association shall, on behalf 
of the Borrower, withdraw from the Credit Account and deposit into the Special Account 
such amount or amounts as the Borrower shall have requested.
(b)
(i)
For replenishment of the Special Account, the Borrower shall 
furnish to the Association requests for deposits into the Special 
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Account at such intervals as the Association shall specify.
(ii)
Prior to or at the time of each such request, the Borrower shall 
furnish to the Association the documents and other evidence 
required pursuant to paragraph 4 of this Schedule for the payment 
or payments in respect of which replenishment is requested. On the 
basis of each such request, the Association shall, on behalf of 
the Borrower, withdraw from the Credit Account and deposit into 
the Special Account such amount as the Borrower shall have 
requested and as shall have been shown by said documents and other 
evidence to have been paid out of the Special Account for eligible 
expenditures. All such deposits shall be withdrawn by the 
Association from the Credit Account under the respective eligible 
Categories, and in the respective equivalent amounts, as shall 
have been justified by said documents and other evidence.
4.
For each payment made by the Borrower out of the Special Account, the Borrower 
shall, at such time as the Association shall reasonably request, furnish to the 
Association such documents and other evidence showing that such payment was made 
exclusively for eligible expenditures.
5.
Notwithstanding the provisions of paragraph 3 of this Schedule, the Association 
shall not be required to make further deposits into the Special Account:
(a)
if, at any time, the Association shall have determined that all further 
withdrawals should be made by the Borrower directly from the Credit Account in 
accordance with the provisions of Article V of the General Conditions and paragraph 
(a) of Section 2.02 of this Agreement;
(b)
if the Borrower shall have failed to furnish to the Association, within 
the period of time specified in Section 4.01 (b) (ii) of this Agreement, any of the 
audit reports required to be furnished to the Association pursuant to said Section in 
respect of the audit of the records and accounts for the Special Account;
(c)
if, at any time, the Association shall have notified the Borrower of its 
intention to suspend in whole or in part the right of the Borrower to make withdrawals 
from the Credit Account pursuant to the provisions of Section 6.02 of the General 
Conditions; or
(d)
once the total unwithdrawn amount of the Credit allocated to the eligible 
Categories, minus the total amount of all outstanding special commitments entered into 
by the Association pursuant to Section 5.02 of the General Conditions, shall equal the 
equivalent of twice the amount of the Authorized Allocation.
Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of 
the Credit allocated to the eligible Categories shall follow such procedures as the 
Association shall specify by notice to the Borrower.  Such further withdrawals shall 
be made only after and to the extent that the Association shall have been satisfied 
that all such amounts remaining on deposit in the Special Account as of the date of 
such notice will be utilized in making payments for eligible expenditures.
6.
(a)
If the Association shall have determined at any time that any payment out 
of the Special Account: (i) was made for an expenditure or in an amount not eligible 
pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence 
furnished to the Association, the Borrower shall, promptly upon notice from the 
Association: (A) provide such additional evidence as the Association may request; or 
(B) deposit into the Special Account (or, if the Association shall so request, refund 
to the Association) an amount equal to the amount of such payment or the portion 
thereof not so eligible or justified. Unless the Association shall otherwise agree, no 
further deposit by the Association into the Special Account shall be made until the 
Borrower has provided such evidence or made such deposit or refund, as the case may 
be.
(b)
If the Association shall have determined at any time that any amount 
outstanding in the Special Account will not be required to cover further payments for 
eligible expenditures, the Borrower shall, promptly upon notice from the Association, 
refund to the Association such outstanding amount.
(c)
The Borrower may, upon notice to the Association, refund to the 
Association all or any portion of the funds on deposit in the Special Account.
(d)
Refunds to the Association made pursuant to paragraph 6 (a), (b) and (c) 
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of this Schedule shall be credited to the Credit Account for subsequent withdrawal or 
for cancellation in accordance with the relevant provisions of this Agreement, 
including the General Conditions.
SCHEDULE 6
Performance Indicators
PLEASE SEE ORIGINAL FOR INDICATOR, FORMAT WOULD NOT FIT DATABASE