OFFICIAL DOCUMENTS CREDIT NUMBER 5385 -UG Financing Agreement (Regional Pastoral Livelihoods Resilience Project) between REPUBLIC OF UGANDA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated 0 IO ,2015 CREDIT NUMBER 5385 - UG FINANCING AGREEMENT AGREEMENT dated T'7Y -4.j L0 , 2015, entered into between REPUBLIC OF UGANDA ("Recipient") and INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association"). The Recipient and the Association hereby agree as follows: ARTICLE I - GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to this Agreement) constitute an integral part of this Agreement. 1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the General Conditions or in the Appendix to this Agreement. ARTICLE II- FINANCING 2.01. The Association agrees to extend to the Recipient, on the terms and conditions set forth or referred to in this Agreement, a credit in an amount equivalent to twenty six million one hundred thousand Special Drawing Rights (SDR 26,100,000) (variously, "Credit" and "Financing"), to assist in financing the project described in Schedule 1 to this Agreement ("Project"). 2.02. The Recipient may withdraw the proceeds of the Financing in accordance with Section IV of Schedule 2 to this Agreement. 2.03. The Maximum Commitment Charge Rate payable by the Recipient on the Unwithdrawn Financing Balance shall be one-half of one percent (1/2 of 1%) per annum. 2.04. The Service Charge payable by the Recipient on the Withdrawn Credit Balance shall be equal to three-fourths of one percent (3/4 of 1%) per annum. 2.05. The Payment Dates are February 15 and August 15 in each year. 2.06. The principal amount of the Credit shall be repaid in accordance with the repayment schedule set forth in Schedule 3 to this Agreement. 2.07. The Payment Currency is Dollar. -2- ARTICLE III - PROJECT 3.01. The Recipient declares its commitment to the objectives of the Project. To this end, the Recipient shall carry out the Project through the Ministry of Agriculture, Animal Industry and Fisheries ("MAAIF") in accordance with the provisions of Article IV of the General Conditions. 3.02. Without limitation upon the provisions of Section 3.01 of this Agreement, and except as the Recipient and the Association shall otherwise agree, the Recipient shall ensure that the Project is carried out in accordance with the provisions of Schedule 2 to this Agreement. ARTICLE IV - REMEDIES OF THE ASSOCIATION 4.01. The Additional Events of Suspension consist of the following: (a) The Kenya Financing Agreement or the IGAD Financing Agreement shall have failed to become effective twenty-four (24) months after the Effective Date or such later date as the Association shall establish by notice to the Recipient. (b) The Association has suspended in whole or in part: (i) the right of Kenya to make withdrawals under the Kenya Financing Agreement; or (ii) right of IGAD to make withdrawals under the IGAD Financing Agreement. (c) The Recipient has suspended its membership and/or participation in IGAD. ARTICLE V - EFFECTIVENESS; TERMINATION 5.01. The Additional Conditions of Effectiveness consist of the following: (a) The Recipient, through the Ministry of Agriculture, Animal Industry and Fisheries, has adopted the Project Implementation Manual, in accordance with the provisions of Section L.B of Schedule 2 to this Agreement (b) The Recipient has established the National Project Coordination Unit and recruited the key staff, including environmental specialist and social development specialist, all with qualifications, experience and terms of reference satisfactory to the Association. (c) The Recipient, through the Ministry of Agriculture, Animal Industry and Fisheries, has adopted the Annual Work Plan and Budget for the first year of Project implementation, in form and substance satisfactory to the Association. -3- 5.02. The Effectiveness Deadline is the date one hundred and twenty (120) days after the date of this Agreement. 5.03. For purposes of Section 8.05(b) of the General Conditions, the date on which the obligations of the Recipient under this Agreement (other than those providing for payment obligations) shall terminate is twenty (20) years after the date of this Agreement. ARTICLE VI- REPRESENTATIVE; ADDRESSES 6.01. The Recipient's Representative is its minister responsible for finance. 6.02. The Recipient's Address is: Ministry of Finance, Planning and Economic Development P.O. Box 8147 Kampala Republic of Uganda Telephone Facsimile 256-414-707000 256-414-230163 6.03. The Association's Address is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable: Telex: Facsimile: INDEVAS 248423 (MCI) 1-202-477-6391 Washington, D.C. -4- AGREED at KCt APLU9 U¢ cQ , as of the day and year first above written. REPUBLIC OF UGANDA By uthorized Representative Name: { c Title: t x-V Cp- INTERNATIONAL DEVELOPMENT ASSOCIATION By Authorized Representative Name: jQ Title: ) r L)( \ D -5- SCHEDULE 1 Project Description The objectives of the Project are to enhance livelihood resilience of pastoral and agro-pastoral communities in cross-border drought prone areas of Selected Countries and improve the capacity of the Selected Countries' governments to respond promptly and effectively to an Eligible Crisis or Emergency. The Project consists of the following parts: Part 1. Natural Resources Management Assisting pastoral and agro-pastoral communities to manage sustainably natural resources with trans-boundary significance through: 1.1. Carrying out of a program of activities to enhance the capacity of Recipient to manage pastoral related natural resources, such activities to include: (a) elaborating a baseline study mapping ground-water resources (including improving the maps resolution and refining and updating the maps in order to meet Selected Countries' needs) and developing an integrated information system of water resources along cross-border routes; (b) designing, building and rehabilitating water resources access facilities (including water pans, earth dams, boreholes, shallow wells and rock catchments) and identifying and promoting appropriate water harvesting technologies; (c) supporting the setting up of water user associations and capacity building of such associations and communities to manage and maintain water resources systems; and (d) training operational and maintenance staff of water resources access facilities. 1.2. Carrying out of a program of activities to support sustainable land management in pastoral and agro-pastoral areas through: (a) refining regional and national maps of degraded rangelands and ecosystems with trans-boundary implications for animal movements; (b) training and supporting pastoralists and agro- pastoralists in implementing participatory rangeland rehabilitation and management techniques, including area enclosure, physical and biological conservation, reseeding degraded areas, clearing invasive species and supporting soil conservation; (c) building or rehabilitating forage storage structures; and (d) supporting harmonization of policies on participatory rangeland management across the Selected Countries. 1.3. Carrying out of a program of activities designed to prevent conflicts and build peace among communities in pastoral and agro-pastoral areas such a program to include such activities as: (a) strengthening and harmonizing pastoral related natural resources policies; (b) supporting peace building activities including information meetings, joint cross-border activities on civic education and peace -6- campaigns, and exposure visits of community members; (c) building capacities of communities and local governments to implement the agreed arrangements for natural resource sharing; (d) facilitating meetings to restore confidence of community stakeholders on traditional conflict management mechanisms; and (e) supporting demarcation of traditional livestock migration routes. Part 2. Market Access and Trade Enhancing the market access of the agro-pastoralists and pastoralists to the intra- regional and international markets of livestock and livestock products through: 2.1. Carrying out of a program of activities to support livestock market support infrastructure and information system, including: (a) supporting the integration of the national livestock marketing information systems with the regional-level system; (b) provision of equipment and Training to stakeholders on interpreting and using information from the national livestock marketing information system; (c) carrying out nation-wide dissemination of livestock marketing-related information; (d) building, rehabilitating and equipping market infrastructures (including holding/auction grounds, border check-points, regional and satellite laboratories) along trade routes; and (e) building capacity of officials and market staff, pastoralists and other actors on market management, including inspections and certifications. 2.2. Carrying out of a program of activities to support livestock value-chain and improve livestock mobility and trade through: (a) supporting the adoption and implementation of regional animal diseases surveillance strategies, regional animal marketing policies, protocols, tariffs, certification systems, sanitary and phyto-sanitary standards, animal identification and traceability systems, including dissemination of relevant policies, statutes and regulations; and (b) carrying out capacity building activities among livestock marketing and trade stakeholders (including government officials, pastoralists and private sector). Part 3. Livelihood Support Enhancing livelihoods of pastoralist and agro-pastoralist communities through: 3.1. (a) Supporting harmonized vaccination campaigns for priority livestock diseases such as peste des petits ruminants, foot-and-mouth disease, contagious caprine pleuro pneumonia, contagious bovine pleuro pneumonia, rift valley fever and newcastle disease; (b) enhancing livestock disease and vector control and surveillance in targeted drought-prone areas; (c) supporting the development and harmonization of breeding strategies in the arid and semi-arid areas including provision of improved breeds, equipment and technical assistance to breeding centers and community breeding groups; (d) providing training to veterinarians and veterinary paraprofessionals including community animal health workers, -7- kraal leaders, and butchery workers on disease detection and reporting; and (e) supporting pastoral field schools including support their institutionalization, the deployment of learning-by-doing methodologies to carry out on-field demonstrations, training master trainers and pastoral field school facilitators. 3.2. (a) Supporting improvements in fodder bulking and conservation; (b) water management schemes for promotion of crop and fodder production and dry season grazing; (c) building capacity and training of farmers and extension staff on cereal and legumes production and on farm management;(d) undertaking adaptive research and supporting the introduction of drought tolerant fodder species in agro-pastoral areas; and (e) building and rehabilitating storage and post-harvest facilities adapted to pastoral conditions and agricultural production. 3.3. Carrying out a program of activities designed to facilitate livelihoods diversification through identification of markets, demonstration, and sharing information on livelihood alternatives. Part 4. Pastoral Risk Management and Contingent Emergency Response Enhancing drought-related hazards preparedness, prevention and response through: 4.1. Carrying out of a program of activities designed to support the establishment and implementation of pastoral risk early warning and response system such a program to include the following activities: (a) harmonizing methodologies on risk profiling; (b) carrying out studies and analyses to identify gaps in response capacity; and (c) establishing and supporting the implementation of a nation-wide early warning system to collect, analyze and disseminate early warning reports and information to decision makers and communities for appropriate action including developing contingency plans and guidelines; expanding and rehabilitating sentinel sites in the Project area; procurement of equipment, building capacity on geographic information system and climate change mainstreaming and supporting the establishment of clusters of cross-border pastoral risk management committees. 4.2. (a) Carrying out of capacity building programs at national and sub-national levels on key policies and guidelines for drought disaster risk management; (b) building fiduciary and administrative capacities of the Recipient's institutions to manage national contingency funds; (c) supporting the design of a communication strategy for early warning system; and (d) supporting the implementation of pastoral risk management strategies. 4.3. Providing immediate response to an Eligible Crisis or Emergency, as needed. -8- Part 5. Project Management and Institutional Support 5.1. Carrying out of Project planning, coordination, management, audits, monitoring and evaluation including carrying out technical studies and learning activities, and dissemination of Project information. 5.2. Carrying out of a program of activities designed to enhance the capacity of Recipient's national institutions and civil society on drought resilience including supporting inter-ministerial collaboration within Recipient's government as well as among Selected Countries. -9- SCHEDULE 2 Project Execution Section I. Implementation Arrangements A. Institutional Arrangements Institutional Arrangements at the National Level 1. National Steering Committee. Not later than one (1) month after the Effective Date, the Recipient shall establish - and thereafter maintain at all times during the implementation of the Project - a Project Steering Committee, chaired by the permanent secretary or a designated representative of MAAIF, with functions, composition, staffing and resources satisfactory to the Association, to be responsible for providing policy oversight and strategic direction in the execution of the Project. 2. National Project Coordination Unit. The Recipient shall establish and maintain the national Project coordination unit (NPCU) at MAAlF with staffing with the terms of reference and resources satisfactory to the Association. Institutional Arrangements at the District Level 3. District Steering Committee. The Recipient shall, no later than one (1) month after the Effective Date or any other date to be agreed with the Association, cause each Participating District to designate - and thereafter maintain - a District steering committee, each with mandate, composition and resources satisfactory to the Association (District Steering Committee). 4. District Coordination Unit. The Recipient shall, no later than two (2) months after the Effective Date or any other date to be agreed with the Association, cause each Participating District to establish - and thereafter maintain - a District Coordination Unit each with functions and resources satisfactory to the Association and with staff in adequate numbers and with terms of reference, qualifications and experience satisfactory to the Association. B. Project Implementation Manual I. The Recipient shall prepare, a Project implementation manual in form and substance satisfactory to the Association, containing detailed arrangements and procedures for implementation of the Project including inter alia: (a) institutional coordination and day-to-day implementation of the Project; (b) disbursement, procurement, and financial management including financial and technical audit of the Project; (c) environmental and social safeguards management including the operation of complaints and grievance redress mechanism; (d) social -10- accountability mechanisms; (e) monitoring and evaluation, reporting and communication, including performance indicators; (f) a capacity building program for designated Project implementation staff at national, district and local levels; and (g) such other administrative, financial, technical and organizational arrangements and procedures as shall be required for the Project. 2. The Recipient shall: (a) furnish to and exchange views with the Association on such manual promptly upon its preparation; and (b) thereafter adopt such manual as shall have been approved by the Association (Project Implementation Manual). 3. The Recipient shall ensure that the Project is carried out in accordance with the arrangements and procedures set out in the PIM (provided, however, that in case of any conflict between the arrangements and procedures set out in the PIM and the provisions of this Agreement, the provisions of this Agreement shall prevail), and shall not amend, abrogate or waive, or permit to be amended, abrogated or waived, the PIM or any of its provisions without prior approval in writing by the Association. C. Anti-Corruption The Recipient shall ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines. D. Safeguards 1 . The Recipient shall ensure that the Project is carried out in accordance with the provisions of the Safeguard Frameworks and any other Safeguard Instrument prepared or to be prepared by the Recipient in accordance with sub-paragraph 2 below. 2. Whenever a Safeguard Instrument shall be required for any proposed Project activity in accordance with the provisions any Safeguard Framework, the Recipient shall: (a) prior to the commencement of such activity, proceed to have such Safeguard Instrument: (i) prepared in accordance with the provisions of the corresponding Safeguard Framework, as the case may be; (ii) furnished to the Association for review and approval; and (iii) thereafter adopted and disclosed as approved by the Association, in a manner acceptable to the Association; and (b) thereafter take such measures as shall be necessary or appropriate to ensure compliance with the requirements of such Safeguard Instrument; and -11- (c) in the case of any resettlement activity under the Project involving Affected Persons, ensure that no displacement (including restriction of access to legally designated parks and protected areas) shall occur before necessary resettlement measures consistent with the relevant RAP have been executed, including, in the case of displacement, full payment to Affected Persons of compensation and of other assistance required for relocation, prior to displacement. 3. The Recipient shall not amend, abrogate or waive, or permit to be amended, abrogated or waived, any Safeguard Framework or any Safeguard Instrument, unless the Association has provided its prior approval thereof in writing, and the Recipient has complied with the same consultation and disclosure requirements as applicable to the original adoption of the said instruments. 4. Without limitation on its other reporting obligations under this Agreement, the Recipient shall collect, compile and submit to the Association each calendar year (or at such other frequency as may be agreed with the Association) consolidated reports on the status of compliance with the Safeguard Frameworks and the Safeguard Instruments, as applicable, giving details of: (a) measures taken in furtherance of the said documents; (b) conditions, if any, which interfere or threaten to interfere with the smooth implementation of the said measures; and (c) remedial measures taken or required to be taken to address such conditions. E. Annual Work Plans and Budgets 1 . The Recipient shall prepare and furnish to the Association not later than March 31" of each Fiscal Year during the implementation of the Project (beginning in the calendar year 2015), a work plan and budget containing inter alia: (i) all activities proposed to be implemented under the Project during the following Fiscal Year; (ii) a proposed financing plan for expenditures required for such activities, setting forth the proposed amounts and sources of financing therefor and disbursement schedule; and (iii) the training plan for such period. 2. The Recipient shall ensure that in preparing any training plan proposed for inclusion in an annual work plan and budget it shall identify in the training plan: (i) the objective and content of the Training envisaged; (ii) the selection method of the institutions or individuals conducting such Training, and said institutions if already known; (iii) the expected duration and an estimate of the cost of said Training; and (iv) the selection method of the personnel who will attend the Training, and number and names of such personnel if already known. 3. The Recipient shall afford the Association a reasonable opportunity to exchange views with the Recipient on each such proposed work plan and budget and shall thereafter ensure that the Project is implemented with due diligence during said -12- following Fiscal Year in accordance with such work plan and budget as shall have been approved by the Association ("Annual Work Plan and Budget"). 4. The Recipient shall not make or allow to be made any changes to the approved Annual Work Plan and Budget without prior approval in writing by the Association. F. Immediate Response Mechanism In order to ensure the proper implementation of Part 4.3 of the Project ("Contingent Emergency Response") ("IRM Part"), the Recipient shall take the following measures. 1 . The Recipient shall: (a) no later than twelve (12) months after Effective Date prepare and furnish to the Association for its review and approval, an operations manual which shall set forth detailed implementation arrangements for the IRM Part, including: (i) designation of, terms of reference for and resources to be allocated to, the entity to be responsible for coordinating and implementing the IRM Part ("Coordinating Authority"); (ii) specific activities which may be included in the IRM Part, Eligible Expenditures required therefor ("Emergency Expenditures"), and any procedures for such inclusion; (iii) financial management arrangements for the IRM Part; (iv) procurement methods and procedures for Emergency Expenditures to be financed under the IRM Part; (v) documentation required for withdrawals of Emergency Expenditures; (vi) environmental and social safeguard management frameworks for the IRM Part, consistent with the Association's policies on the matter; and (vii) any other arrangements necessary to ensure proper coordination and implementation of the IRM Part; (b) afford the Association a reasonable opportunity to review said proposed operations manual; (c) promptly adopt such operations manual for the IRM Part as shall have been approved by the Association ("IRM Operations Manual"); (d) ensure that the IRM Part is carried out in accordance with the IRM Operations Manual; provided, however, that in the event of any inconsistency between the provisions of the IRM Operations Manual and this Agreement, the provisions of this Agreement shall prevail; and (e) not amend, suspend, abrogate, repeal or waive any provision of the IRM Operations Manual without prior approval by the Association. -13- 2. The Recipient shall, throughout the implementation of the IRM Part, maintain the Coordinating Authority, with adequate staff and resources satisfactory to the Association. 3. The Recipient shall undertake no activities under the IRM Part (and no activities shall be included in the IRM Part) unless and until the following conditions have been met in respect of said activities: (a) the Recipient has determined that an Eligible Crisis or Emergency has occurred, has furnished to the Association a request to include said activities in the IRM Part in order to respond to said Eligible Crisis or Emergency, and the Association has agreed with such determination, accepted said request and notified the Recipient thereof; and (b) the Recipient has prepared and disclosed all safeguards instruments required for said activities, in accordance with the IRM Operations Manual, the Association has approved all such instruments, and the Recipient has implemented any preparatory actions which are required to be taken under said instruments. Section II. Project Monitorini, Reporting and Evaluation A. Project Reports 1 . The Recipient shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 4.08 of the General Conditions and on the basis of indicators acceptable to the Association. Each Project Report shall cover the period of one calendar year, and shall be furnished to the Association not later than sixty (60) days after the end of the period covered by such report. 2. Thirty (30) months after the Effective Date, the Recipient shall, in conjunction with the Association, carry out a mid-term review of the Project (the "Mid-term Review"), covering the progress achieved in the implementation of the Project. The Recipient shall prepare and furnish to the Association not less than three (3) months prior to the beginning of the Mid-term Review, a report integrating the results of the monitoring and evaluation activities performed pursuant to this Agreement, on the progress achieved in the carrying out of the Project during the period preceding the date of such report, and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objective of the Project during the period following such date. Following the Mid-term Review, the Recipient shall act promptly and diligently in order to take, or cause to be taken, any corrective action deemed necessary by the Association to remedy any shortcoming noted in the carrying out of the Project in furtherance of the objective of the Project. -14- B. Financial Management, Financial Reports and Audits 1. The Recipient shall maintain or cause to be maintained a financial management system in accordance with the provisions of Section 4.09 of the General Conditions. 2. Without limitation on the provisions of Part A of this Section, the Recipient shall prepare and furnish to the Association not later than forty-five (45) days after the end of each calendar quarter, interim unaudited financial reports for the Project covering the quarter, in form and substance satisfactory to the Association. 3. The Recipient shall have its Financial Statements audited in accordance with the provisions of Section 4.09(b) of the General Conditions. Each audit of the Financial Statements shall cover the period of one fiscal year of the Recipient. The audited Financial Statements for each such period shall be furnished to the Association not later than six (6) months after the end of such period. Section III. Procurement A. General 1. Goods, Works and Non-consulting Services. All goods, works and non- consulting services required for the Project and to be financed out of the proceeds of the Financing shall be procured in accordance with the requirements set forth or referred to in Section I of the Procurement Guidelines, and with the provisions of this Section. 2. Consultants' Services. All consultants' services required for the Project and to be financed out of the proceeds of the Financing shall be procured in accordance with the requirements set forth or referred to in Sections I and IV of the Consultant Guidelines, and with the provisions of this Section. 3. Definitions. The capitalized terms used below in this Section to describe particular procurement methods or methods of review by the Association of particular contracts, refer to the corresponding method described in Sections 11 and III of the Procurement Guidelines, or Sections II, III, IV and V of the Consultant Guidelines, as the case may be. B. Particular Methods of Procurement of Goods, Works and Non-consulting Services 1. International Competitive Bidding. Except as otherwise provided in paragraph 2 below, goods, works and non-consulting services shall be procured under contracts awarded on the basis of International Competitive Bidding. -15- 2. Other Methods of Procurement of Goods, Works and Non-consulting Services. The following methods, other than International Competitive Bidding, may be used for procurement of goods, works and non-consulting services for those contracts specified in the Procurement Plan: (a) National Competitive Bidding (subject to the additional provisions in paragraph 3 below); (b) Shopping (subject to the additional provisions in paragraph 4 below); (c) Direct Contracting (subject to the additional provisions in paragraph 5 below); (d) Framework Agreements in accordance with procedures which have been found acceptable to the Association (subject to the additional provisions in paragraph 6 below); and (e) Limited International Bidding. 3. National Competitive Bidding shall be subject to the following: (a) negotiating with the lowest evaluated responsive bidder shall not be permitted; (b) the use of a merit point system for bid evaluation shall not be permitted except for procurement of: (i) complex information and technology systems; and (ii) design and build contracts; (c) domestic preferences shall not apply under NCB; (d) the charging of fees for dealing with bidder complaints at procuring entity level shall not be permitted; (e) in accordance with paragraph 1.16(e) of the Procurement Guidelines, each bidding document and contract shall provide for the following: (i) the bidders, suppliers, contractors and subcontractors shall, on request, permit the Association to inspect the accounts and records relating to the bid submission and performance of the contract, and shall have the accounts and records audited by auditors appointed by the Association; and (ii) any deliberate and/or material violation of such provision by any bidder, supplier, contractor or subcontractor may amount to an obstructive practice provided for in paragraphs 1.16(a) and (v) of the Procurement Guidelines; (f) firms or individuals debarred or suspended by the Association shall not be eligible (in addition to firms or individuals suspended by PPDA); (g) disqualification of bidders for not purchasing bidding documents from the Recipient shall not apply; (h) in evaluation of goods and works, the following documentation or their equivalent shall not be treated as eligibility requirements: (i) tax clearance certificates; (ii) tax registration certificates; (iii) trading -16- licenses; and (iv) the PPDA certificate of registration. Documents (i) - (iii) may, however, be included as post qualification requirements, which the Recipient can request the bidder to avail during the evaluation; (i) ineligibility shall - in addition to firms suspended by PPDA - extend to firms debarred or suspended by the Association; and (j) registration in the PPDA's register of providers shall neither be an eligibility nor qualification requirement. 4. Shopping shall follow the request for quotations procedures (as defined in the PPDA Act and attendant regulations) subject to the provisions in sub-paragraphs (a) to (f) immediately above. 5. Direct Contracting shall be subject to the following, namely, that micro-procurement (as defined in the PPDA Act) shall only apply for contracts estimated to cost the equivalent of US$200 or less in case of unforeseen circumstances only. 6. Framework Agreements shall be subject to the following, namely, that Framework Agreements procedures (as defined in the PPDA Act) shall be subject to competitive bidding under NCB procedures (subject to the exceptions under paragraph 3 above). The advertisement/invitation to bid shall clearly indicate that the contract shall be signed on the Framework Agreements basis. C. Particular Methods of Procurement of Consultants' Services 1 . Quality- and Cost-based Selection. Except as otherwise provided in paragraph 2 below, consultants' services shall be procured under contracts awarded on the basis of Quality- and Cost-based Selection. 2. Other Methods of Procurement of Consultants' Services. The following methods, other than Quality- and Cost-based Selection, may be used for procurement of consultants' services for those contracts which are specified in the Procurement Plan: (a) Quality-based Selection; (b) Selection under a Fixed Budget; (c) Least-Cost Selection; (d) Selection based on Consultants' Qualifications; (e) Single-source Selection of consulting firms; (f) Procedures set forth in paragraphs 5.2 and 5.3 of the Consultant Guidelines for the Selection of Individual Consultants; and (g) Single-source procedures for the Selection of Individual Consultants. -17- D. Review by the Association of Procurement Decisions The Procurement Plan shall set forth those contracts which shall be subject to the Association's Prior Review. All other contracts shall be subject to Post Review by the Association. E. Procurement of Emergency Expenditures under the IRM Part of the Project Notwithstanding any provision to the contrary in this Section, Emergency Expenditures required for the IRM Part of the Project shall be procured in accordance with the procurement methods and procedures set forth in the IRM Operations Manual. F. Other Procurement Covenants 1. The Recipient shall, not later than one (1) month after the Effective Date, recruit a procurement specialist, with qualifications, experience and terms of reference satisfactory to the Association. 2. The Recipient shall, not later than six (6) months after the Effective Date, provide procurement Training for staff of procurement and disposal unit of the Ministry of Agriculture, Animal Industry and Fisheries, in a manner and under terms of reference acceptable to the Association. 3. The Recipient shall, not later than six (6) months after the Effective Date, recruit a civil engineer to be responsible for inter alia verifying the contractors' payments during contract execution. 4. The Recipient shall, not later than twelve (12) months after the Effective Date, update its procurement filing and record keeping system, in form and substance acceptable to the Association. Section IV. Withdrawal of the Proceeds of the Financing A. General I. The Recipient may withdraw the proceeds of the Financing in accordance with the provisions of Article II of the General Conditions, this Section, and such additional instructions as the Association shall specify by notice to the Recipient (including the "World Bank Disbursement Guidelines for Projects" dated May 2006, as revised from time to time by the Association and as made applicable to this Agreement pursuant to such instructions), to finance Eligible Expenditures as set forth in the table in paragraph 2 below. 2. The following table specifies the categories of Eligible Expenditures that may be financed out of the proceeds of the Financing ("Category"), the allocations of the -18- amounts of the Financing to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category: Amount of the Percentage of Expenditures Financing Allocated to be Financed Category (expressed in SDR) (inclusive of Taxes) (1) Goods, works, non- 26,100,000 100% consulting services, Operating Costs, Training and consultants' services for Parts 1, 2, 3, 4.1, 4.2, and 5 of the Project (2) Emergency 0 100% of the amounts Expenditures under Part disbursed 4.3 of the Project TOTAL AMOUNT 26,100,000 B. Withdrawal Conditions; Withdrawal Period 1 . Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made: (a) for payments made prior to the date of this Agreement, except that withdrawals up to an aggregate amount not to exceed USD100,000 equivalent may be made for payments made prior to this date but on or after February 1, 2014, for Eligible Expenditures under Category (1); or (b) under Category (1) for payments to any Participating District, unless and until the respective Participating District has designated (or recruited) an accountant with qualifications and experience and under the terms of reference satisfactory to the Association to be responsible for accounting for the Project funds; (c) under Category (2) for Emergency Expenditures under Part 4.3 of the Project, unless and until the Association is satisfied, and notified the Recipient of its satisfaction, that all of the following conditions have been met in respect of said activities: -19- (i) the Recipient has determined that an Eligible Crisis or Emergency has occurred, has furnished to the Association a request to include said activities in the IRM Part in order to respond to said Eligible Crisis or Emergency, and the Association has agreed with such determination, accepted said request and notified the Recipient thereof; (ii) the Recipient has prepared and disclosed all safeguards instruments required for said activities, and the Recipient has implemented any preparatory actions which are required to be taken under said instruments, all in accordance with the provisions of Section I.F.3 of Schedule 2 to this Agreement; (iii) the Recipient's Coordinating Authority has adequate staff and resources, in accordance with the provisions of Section 1.F.2 of this Schedule 2 to this Agreement, for the purposes of said activities; and (iv) the Recipient has adopted an IRM Operations Manual in form, substance and manner acceptable to the Association and the provisions of the IRM Operations Manual remain - or have been updated in accordance with the provisions of Section I.F.1 of this Schedule 2 so as to be - appropriate for the inclusion and implementation of said activities under the IRM Part. 2. The Closing Date is December 31, 2019. Section V. Other Undertakings A. Other Financial Management Covenants 1 . The Recipient shall cause MAAIF internal auditor (in collaboration with District internal auditors) to conduct in each calendar semester (commencing with the calendar semester in which the first withdrawal under the Project was made) an internal audit review of the Project and furnish to the Association not later than forty-five (45) days after the end of the calendar semester, a report of such review covering the semester, in form and substance satisfactory to the Association. 2. The Recipient shall, not later than three (3) months after the Effective Date, recruit a Project accountant, in accordance with the provisions of Section III of this Schedule, with qualifications, experience and terms of reference satisfactory to the Association. -20- 3. The Recipient shall, not later than six (6) months after the Effective Date, designate - or cause each Participating District to designate - an internal auditor for the respective Participating District with qualifications and experience and under the terms of reference satisfactory to the Association. -21- SCHEDULE 3 Repayment Schedule Principal Amount of the Credit repayable Date Payment Due (expressed as a percentage)* On each February 15 and August 15: commencing August 15, 2024, to and including 1% February 15, 2034 commencing August 15, 2034, to and including 2% February 15, 2054 * The percentages represent the percentage of the principal amount of the Credit to be repaid, except as the Association may otherwise specify pursuant to Section 3.03(b) of the General Conditions. -22- APPENDIX Section I. Definitions I. "Affected Persons" means any person who, on account of the execution of the Project, has experienced or would experience direct economic and social impacts caused by: (a) the involuntary taking of land, resulting in: (i) relocation or loss of shelter; (ii) loss of assets or access to assets; or (iii) loss of income sources or means of livelihood, whether or not such person must move to another location; or (b) the involuntary restriction or access to legally designated parks and protected areas, resulting in adverse impacts on the livelihood of such person. 2. "Annual Work Plan and Budget" means each annual work plan, together with the related budget, for the Project approved by the Association pursuant to the provisions of Section I.E of Schedule 2 to this Agreement and "Annual Work Plans and Budgets" means more than one Annual Work Plan and Budget. 3. "Anti-Corruption Guidelines" means the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants", dated October 15, 2006, and revised in January 2011. 4. "Category" means a category set forth in the table in Section IV of Schedule 2 to this Agreement. 5. "Consultant Guidelines" means the "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011. 6. "Coordinating Authority" means the entity or entities designated by the Recipient in the IRM Operations Manual and approved by the Association pursuant to Section I.F.2 of Schedule 2 to this Agreement, to be responsible for coordinating the IRM Part of the Project. 7. "District" means the second tier of government in the administrative system of the Recipient established under the Recipient's Constitution of 1995. 8. "District Coordination Unit" means the unit referred to in Section I.A.4 of Schedule 2 to this Agreement. 9. "District Steering Committee" means the committee referred to in Section I.A.3 of Schedule 2 to this Agreement. 10. "Effective date" means the date on which the Financing Agreement enter into effect pursuant to Section 8.03 of the General Conditions for Credits and Grants -23- 11. "Eligible Crisis or Emergency" means an event that has caused, or is likely to imminently cause, a major adverse economic and/or social impact to the Recipient, associated with a natural or man-made crisis or disaster. 12. "Emergency Expenditure" means any of the Eligible Expenditures set forth in the IRM Operations Manual in accordance with the provisions of Section 1.F.1(a)ii of Schedule 2 to this Agreement and required for the activities included in the IRM Part of the Project. 13. "ESIA" or "Environmental and Social Impact Assessment" means an environmental and social impact assessment prepared by the Recipient in accordance with the ESMF pursuant to Section I.D of Schedule 2 to this Agreement, and "ESIAs" means, collectively, all such assessments. 14. "ESMF" means the Recipient's environmental and social management framework document - dated October 2013, and disclosed on infoshop on December 5, 2013 - setting forth the modalities for environmental screening and procedures/actions for the preparation and implementation of environmental and social assessments and management plans under the Project, and such term includes any schedule and/or annex to said framework. 15. "ESMP" means, for a given Project activity, an environmental and social management plan, in form and substance satisfactory to the Association, prepared by the Recipient in accordance with the ESMF pursuant to Section I.D of Schedule 2 to this Agreement; and "ESMPs" means, collectively, all such plans. 16. "Fiscal Year" and "FY" mean the twelve (12) month period starting July 1 and ending June 30 of the following year. 17. "General Conditions" means the "International Development Association General Conditions for Credits and Grants", dated July 31, 2010. 18. "IGAD" means Inter-Governmental Authority on Development, an organization set up through IGAD Constitutive Agreement. 19. "IGAD Constitutive Agreement" means the agreement establishing the Inter- Governmental Authority on Development of March 21, 1996. 20. "IGAD Financing Agreement" means the agreement between IGAD and the Association for activities related to the Project, as such agreement may be amended from time to time, and the term includes all appendices, schedules and agreements supplemental to the said agreement. 21. "Immediate Response Mechanism Operations Manual" and "IRM Operations Manual" each means the operations manual referred to in Section I.F.1 of -24- Schedule 2 to this Agreement, to be adopted by the Recipient for the IRM Part of the Project in accordance with the provisions of said Section. 22. "Indigenous Peoples" means distinct, vulnerable, social and cultural groups that may be identified pursuant to the studies outlined in the IPPF (as hereinafter defined) for the purposes of this Project. 23. "Indigenous Peoples Plan" or "IPP" means, for a given Project activity, an indigenous peoples plan, in form and substance satisfactory to the Association, prepared by the Recipient in accordance with the IPPF pursuant to Section I.D of Schedule 2 to this Agreement; and "IPPs" means, collectively, all such plans. 24. "Indigenous Peoples Planning Framework" or "IPPF" means an instrument dated October 2013, and disclosed on infoshop on December 4, 2013, satisfactory to the Association outlining the basis for identifying indigenous peoples and their rights as the same may be amended from time to time with the prior written approval of the Association. 25. "Integrated Pest Management Framework" or "IPMF" means an instrument dated January 2014, and disclosed on infoshop on January 28, 2014, satisfactory to the Association, designed to support integrated pest management and the safe use of pesticides as the same may be amended from time to time with the prior written approval of the Association. 26. "Integrated Pest Management Plan" or "IPMP" means for a given Project activity, an integrated pest management plan, in form and substance satisfactory to the Association, prepared by the Recipient in accordance with the IPMF pursuant to Section I.D of Schedule 2 to this Agreement; and "IPMPs" means, collectively, all such plans. 27. "IRM Part of the Project" and "IRM Part" each means Part 4.3 of the Project. 28. "Kenya Financing Agreement" means the agreement between Kenya and the Association for activities related to the Project, as such agreement may be amended from time to time, and the term includes all appendices, schedules and agreements supplemental to the said agreement. 29. "Ministry of Agriculture, Animal Industry and Fisheries" and the acronym "MAAIF" mean the Recipient's ministry responsible for animal industry and any successor thereto. 30. "National Project Coordination Unit" means the unit referred to in Section I.A.2 of Schedule 2 to this Agreement. 31. "National Steering Committee" means the committee referred to in Section I.A. 1 of Schedule 2 to this Agreement. -25- 32. "Operating Costs" means the incremental expenses incurred on account of Project implementation, based on the Annual Work Plan and Budget approved by the Association pursuant to Section I.E of Schedule 2 to this Agreement, and consisting of expenditures for office supplies, vehicle operation and maintenance, maintenance of equipment, communication and insurance costs, office administration costs, utilities, rental, consumables, accommodation, travel and per diem, and salaries of Project staff, but excluding the salaries of the Recipient's civil service, meeting and other sitting allowances and honoraria to said staff. 33. "Participating Districts" means the Recipient's Districts of Kaabong, Amudat, Kween, Moroto, Nakapiripirit, Kotido, Abim, Napak, Katakwi, Bukedea, Kumi and Amuria. 34. "Procurement Guidelines" means the "Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011. 35. "Procurement Plan" means the Recipient's procurement plan for the Project, dated February 3, 2014, and referred to in paragraph 1.18 of the Procurement Guidelines and paragraph 1.25 of the Consultant Guidelines, as the same shall be updated from time to time in accordance with the provisions of said paragraphs. 36. "Project Implementation Manual" or "PIM" means the manual referred to in Section I.B.2 of Schedule 2 to this Agreement as the same may be amended from time to time with the prior written approval of the Association. 37. "RAP" means the resettlement action plan, in form and substance satisfactory to the Association, prepared or to be prepared by the Recipient on the basis of the RPF, and giving details of the specific actions, measures and policies designed to facilitate the achievement of the objectives of the RPF, along with procedural and institutional measures needed to implement such actions, measures and policies. 38. "RPF" means the Recipient's resettlement planning framework document - dated October 2013, and disclosed on infoshop on December 9, 2013, - setting forth the modalities for the compensation, resettlement and rehabilitation of Affected Persons, acceptable to the Association, and such term includes any schedules and/or annexes to the said framework. 39. "Safeguard Frameworks" means, collectively, the ESMF, IPPF, IPMF and RPF; and "Safeguard Framework" means any one of the Safeguard Frameworks. 40. "Safeguard Instrument" means, in respect of a given Project activity: (a) for which the ESMF requires an ESIA, said ESIA; (b) for which the ESIA requires an ESMP, said ESMP; (c) for which the RPF requires a RAP, said RAP; (d) for which an IPPF requires an IPP, said IPP; (e) for which an IPMF requires an IPMP, said -26- IPMP; and the term includes documents incorporated in the ESMF (including chance finds procedures and guidelines on small dam safety), all as shall have been prepared, approved and disclosed in accordance with the provisions of Section 1.D of Schedule 2 to this Agreement. 41. "Selected Countries" means the Recipient and the Republic of Kenya (as well as any other country of which the Association has notified the Recipient), in whose territories the Project is carried out; and "Selected Country" means individually each and any of the Selected Countries. 42. "Training" means the costs associated with training, workshops and study tours provided under the Project, based on the Annual Work Plan and Budget approved by the Association pursuant to Section I.E of Schedule 2 to this Agreement, consisting of reasonable expenditures (other than expenditures for consultants' services) for: (i) travel, room, board and per diem expenditures incurred by trainers and trainees in connection with their training and by non-consultant training facilitators; (ii) course fees; (iii) training facility rentals; and (iv) training material preparation, acquisition, reproduction and distribution expenses.