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CONFORMED COPY
TF024031
TRUST FUND CREDIT AGREEMENT
(Emergency Farm Reconstruction Project)
between
BOSNIA AND HERZEGOVINA
and 
INTERNATIONAL DEVELOPMENT ASSOCIATION 
(Acting as Trustee of the Trust Fund for Bosnia and Herzegovina)
Dated April 1, 1996
TF024031 
TRUST FUND CREDIT AGREEMENT
AGREEMENT, dated April 1, 1996 between BOSNIA and HERZEGOVINA (the Borrower) and 
INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association), acting as trustee (the 
Trustee) of the Trust Fund for Bosnia and Herzegovina as herein below described.
WHEREAS (A) the Board of Governors of the International Bank for Reconstruction 
and Development, acting on the recommendation of its Board of Executive Directors, 
decided on February 23, 1996, to transfer from the surplus of the Bank, by way of 
grant, $150,000,000 to a trust fund for Bosnia and Herzegovina (the Trust Fund), 
established by Resolutions of the Executive Directors of the Bank (Resolution No. 
96-1) and the Association (Resolution No. IDA 96-1) and to be administered by the 
Association, to be used for financing an emergency reconstruction program in the 
territory of the Borrower;
(B) 
the Borrower has requested the Trustee to assist in financing the project 
described in Schedule to this Agreement (the Project);
(C) 
the Credit provided under this Agreement from the proceeds of the Trust 
Fund shall be allocated exclusively for financing certain activities to be carried out 
under the Project and the Borrower intends, with the assistance of the Trustee, to 
secure the funds required for the carrying out of other activities under the Project 
through contributions from other donors; and
WHEREAS the Trustee 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:
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ARTICLE I
Definitions
Section 1.01.  Unless the context otherwise requires, the several terms defined 
in the Preamble to this Agreement and the General Conditions, set forth in Schedule 6 
to this Agreement, have the respective meanings therein set forth and the following 
additional terms have the following meanings:
(a) 
"Eligible Farmer(s)" means individually a farmer and collectively the 
farmers who meet the priority and eligibility criteria set forth in paragraph 3 of 
Schedule 4 to this Agreement;
(b) 
"Farm Mechanized Equipment" means the farm mechanized equipment, 
accessory tools and other machinery procured with the proceeds of the Credit or any 
part thereof;
(c) 
"MAWF" means the Ministry of Agriculture, Water Management and Forestry 
of the Federation of Bosnia and Herzegovina;
(d) 
"Federation of Bosnia and Herzegovina" means the Federation of Bosnia and 
Herzegovina, a political subdivision of the Borrower, and includes any successor or 
successors thereto;
(e) 
"MOF" means the Ministry of Finance of the Borrower and includes any 
successor or successors thereto;
(f) 
"PIU" means the Project Implementation Unit established within MOF 
pursuant to paragraph 1 of Schedule 4 to this Agreement;
(g) 
"Special Account" means the account referred to in Section 2.02(b) of 
this Agreement.
(h) 
"Supply and Credit Agreement(s)" means any agreement(s) entered into 
between the Borrower, through the PIU or any of the RIUs, and Eligible Farmer(s) 
pursuant to Section 3.02(a) of this Agreement, as the same may be amended from time to 
time, and such term includes all schedules supplemental to the Supply and Credit 
Agreement(s); and
(i) 
"RIUs" means the Regional Implementation Units" established under the PIU 
pursuant to paragraph 2 of Schedule 4 to this Agreement.
ARTICLE II
The Credit
Section 2.01. The Trustee agrees to lend to the Borrower, on the terms and 
conditions set forth or referred to in this Agreement, an amount in various currencies 
equivalent to twenty million dollars ($20,000,000).
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 Trustee 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 shall, for the purposes of the Project, open and maintain in 
dollars a special deposit account in a commercial bank or the central bank of the 
Borrower on terms and conditions satisfactory to the Trustee, 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.
Section 2.03.  The Closing Date shall be June 30, 1998 or such later date as the 
Trustee shall establish.  The Trustee shall promptly notify the Borrower of such later 
date.
Section 2.04.  (a) The Borrower shall pay to the Trustee a commitment charge on 
the principal amount of the Credit not withdrawn from time to time at a rate to be set 
by the Trustee 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.
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(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 Trustee 
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 Trustee 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 
semi-annually on January 1 and July 1 in each year.
Section 2.07.  The Borrower shall repay the principal amount of the Credit in 
semi-annual installments payable on each January 1 and  July 1 commencing July 1, 2006 
and ending January 1, 2036.  Each installment to and including the installment payable 
on January 1, 2016 shall be one percent (1%) of such principal amount, and each 
installment thereafter shall be two percent (2%) of such principal amount.
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 the Project, through the PIU and RIUs, with due diligence and efficiency and in 
accordance with appropriate agricultural and 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 Trustee may 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.  (a) The Borrower shall supply the Farm Mechanized Equipment to 
the Eligible Farmers under Supply and Credit Agreements to be entered into between the 
Borrower and each Eligible Farmer under terms and conditions which shall have been 
approved by the Trustee, including those set forth in paragraph 4 of Schedule 4 to 
this Agreement.
(b) 
The Borrower shall exercise its rights under the Supply and Credit 
Agreements in such manner as to protect the interests of the Borrower and the Trustee 
and to accomplish the purposes of the Credit, and except as the Trustee shall 
otherwise agree, the Borrower shall not assign, amend, abrogate or waive any Supply 
and Credit Agreement or any provision thereof.
 Section 3.03.  Except as the Trustee shall otherwise agree, procurement of the 
goods 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 3.04.  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 Trustee 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 Trustee, a plan designed to ensure the 
continued achievement of the Project’s objectives.
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(b) 
afford the Trustee a reasonable opportunity to exchange views with the 
Borrower on said plan.
ARTICLE IV
Financial Covenants
Section 4.01.  (a) The Borrower shall maintain or cause to be maintained records 
and accounts adequate to reflect in accordance with sound accounting practices the 
operations, resources and expenditures in respect of the Project of the departments or 
agencies of the Borrower responsible for carrying out the Project or any part thereof.
(b)
The Borrower shall:
(i)
have the records and accounts referred to in paragraph (a) of this 
Section including those for the Special Account for each fiscal 
year audited, in accordance with appropriate auditing principles 
consistently applied, by independent auditors acceptable to the 
Trustee;
(ii)
furnish to the Trustee, as soon as available, but in any case not 
later than six months after the end of each such year, a certified 
copy of the report of such audit by said auditors, of such scope 
and in such detail as the Trustee shall have reasonably requested; 
and
(iii)
furnish to the Trustee such other information concerning said 
records, accounts and the audit thereof as the Trustee shall from 
time to time reasonably request.
(c)
For all expenditures with respect to which withdrawals from the Credit 
Account were made on the basis of statements of expenditure, the Borrower shall:
(i) 
maintain or cause to be maintained, in accordance with paragraph 
(a) of this Section, records and accounts reflecting such 
expenditures;
(ii)
retain, until at least one year after the Trustee has received the 
audit 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 Trustee's representatives, based on an appropriate 
notice, 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 proce\1fduresand internal controls 
involved in their preparation, can be relied upon to support the 
related withdrawals.
ARTICLE V
Remedies of the Trustee
Section 5.01.  (a) Pursuant to Section 6.02 (h) of the General Conditions, the 
following additional event is specified, namely, that subject to paragraph (b) of this 
paragraph: (i) the right of the Borrower to withdraw the proceeds of any grant or loan 
made to the Borrower for the financing of the Project shall have been suspended, 
canceled or terminated in whole or in part, pursuant to the terms of the agreement 
providing therefor; or (ii) any such loan shall have become due and payable prior to 
the agreed maturity thereof.
(b) 
Paragraph (a) of this Section shall not apply if the Borrower establishes 
to the satisfaction of the Trustee that: (i) such suspension, cancellation, 
termination or prematuring is not caused by the failure of the Borrower to perform any 
of its obligations under such agreement; and (ii) adequate funds for the Project are 
available to the Borrower from other sources on terms and conditions consistent with 
the obligations of the Borrower under this Agreement. \0c
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ARTICLE VI
Termination
Section 6.01.  The date sixty (60) days after the date of this Agreement is 
hereby specified for the purposes of Section 12.04 of the General Conditions.
ARTICLE VII
Representative of the Borrower; Addresses
Section 7.01.  The Minister of Finance of the Borrower is designated as 
representative of the Borrower for the purposes of Section 11.03 of the General 
Conditions.
Section 7.02.  The following addresses are specified for the purposes of Section 
11.01 of the General Conditions:
For the Borrower:
Ministry of Finance
Mehmeda Spahe 5
71000 Sarajevo
Bosnia and Herzegovina
For the Trustee:
International Development Association
1818 H Street, N.W.
Washington, D.C.  20433
United States of America
Cable address:
Telex:
INDEVAS
197688 (TRT),
Washington, D.C.
248423 (RCA),
 64145 (WUI) or
 82987 (FTCC)
IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized 
representatives, have caused this Agreement to be signed in their respective names in 
Sarajevo, Bosnia and Herzegovina, as of the day and year first above written.
BOSNIA AND HERZEGOVINA
By /s/ Hasan Muratovic
Authorized Representative
INTERNATIONAL DEVELOPMENT ASSOCIATION
(Acting as Trustee of the Trust Fund for Bosnia and Herzegovina)
By /s/ James D. Wolfensohn
Authorized Representative
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 
Credit, the allocations of the amount of the Credit to each Category and the 
percentage of expenditures for items so to be financed in each Category:
Amount of the
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Credit Allocated
   % of
(Expressed in
Expenditures
Category
Dollar Equivalent)
to be Financed
(1) 
Goods
   17,000,000
100% of foreign
expenditures, 100% 
of local 
expenditures 
(ex-factory cost) and
85% of local
expenditures for 
other items 
procured locally
(2) 
Commercial Services
    1,000,000
100%
(3) 
Consultants’ services,
      400,000
100%
training and studies
(4) 
Incremental Operating
      100,000
100%
Costs
(5) 
Unallocated
    1,500,000
TOTAL
   20,000,000
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; 
provided, however, that if the currency of the Borrower is also that of another 
country from the territory of which goods or services are supplied, expenditures in 
such currency for such goods or services shall be deemed to be "foreign expenditures";
(c) 
the term "Commercial Services" means procurement, domestic transport, 
handling, storage, and local distribution services; and
(d) 
the term "Incremental Operating Costs" means the costs of incremental 
staff, facilities, services and other resources of MOF required to implement the 
Project as may be agreed by the Trustee.
3.
Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be 
made in respect of:
(a) 
payments made for expenditures prior to the date of this Agreement, 
except that withdrawals, in an aggregate amount not exceeding the equivalent of 
$2,000,000, may be made in respect of Categories 2, 3 and 4 on account of payments 
made for expenditures before that date but after December 31, 1995; and
(b) 
Category 1, unless Supply and Credit Agreements, in value equivalent to 
at least 10% of the amount of Credit allocated to such category, have been entered 
into by the Borrower and Eligible Farmers.
4.
The Trustee may require withdrawals from the Credit Account to be made on the 
basis of statements of expenditure for expenditures for: (a) goods under contracts not 
exceeding $5,000,000 equivalent; (b) Commercial Services and Incremental Operating 
Costs under contracts not exceeding $100,000 equivalent; and (c) contracts for 
employment of consultants not exceeding $100,000 equivalent, in case of firms, and 
$50,000 equivalent, in case of individuals, each under such terms and conditions as 
the Trustee shall specify by notice to the Borrower.
SCHEDULE 2
Description of the Project
The objective of the Project is to assist the Borrower to: (i) rehabilitate 
agricultural production specifically through its private farm sector; (ii) improve 
food security; and (iii) create employment and income for its war-affected rural 
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population, including returning displaced persons, in the Federation of Bosnia and 
Herzegovina.
The Project consists of the following parts, subject to such modifications 
thereof as the Borrower and the Trustee may agree upon from time to time to achieve 
such objectives.
Part A:
Farm Mechanization Component
1.
Provision of critically needed Farm Mechanized Equipment, including 
tractors/motor cultivators, tractor implements suitable for land preparation, planting 
and forage harvesting, and grain-combine harvesters as follows:
(a)
a total of about 450 two-axle tractors, including spare parts;
(b)
accessory tools for two-axle tractors and selected critical accessory 
tools including tractor trailers;
(c)
a total of about 3,700 single-axle tractors/motor cultivators, including 
spare parts;
(d)
accessory tools for single-axle tractors/motor cultivators, including 
wheel ballast, plow, rotator, ridger and a trailer; and 
(e)
a total of about 80 units of combine harvesters and about 200 units of 
grass mowers, including maize headers for grain maize harvest.
2.
Provision of domestic transportation, handling, storage, and local distribution 
services for Farm Mechanized Equipment.
Part B:
Livestock Production Component
1.
Production of livestock aimed at rebuilding the national herds for milk and meat 
production through the import of about 5000 cattle, 3000 goats and 3000 sheep and 
through domestic purchase and redistribution of sheep.
2.
Provision of domestic transportation, handling, storage, quarantine, and local 
distribution services for livestock.
Part C: 
Livestock Development Services Component
1.
Strengthening of livestock development/veterinary services by re-equipping and 
rebuilding private veterinary stations, rehabilitating veterinary institutes, and 
providing equipment for artificial insemination services as follows:
(a)
provision of equipment for about 40 damaged veterinary field stations 
with essential animal health instruments and equipment covering clinical diagnosis, as 
well as medical and surgical treatments of both farm and companion animals;
(b)
provision of selected critical drugs for bovine fertility, sera, as well 
as vaccines for veterinary stations;
(c)
repairing of about 40 buildings of selected veterinary stations;
(d)
provision of veterinary diagnostic equipment, including diagnostic 
reagents, chemicals, and antigens for veterinary institutes; and 
(e)
provision of equipment and supplies for artificial insemination services.
2.
Provision of domestic transportation, handling, storage, and local distribution 
services for veterinary equipment and drugs.
Part D:
Technical Assistance: Project Implementation Support
1.
Provision of technical assistance to start-up and implement the Project through 
experts, including mechanization, livestock and veterinary experts, accounting and 
project evaluation experts, and procurement agents.
2.
Provision of farmer training and education, and undertaking of Project-related 
studies, including a detailed study of damage to private farms and the identification 
of Eligible Farmers.
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3.
Provision of office equipment, furnishings, supplies, and vehicles to start-up 
and implement the Project.
* * *
The Project is expected to be completed by December 31, 1997.
SCHEDULE 3
Procurement and Consultants’ Services
Section I.
Procurement of Goods
Part A:
General
Goods shall be procured in accordance with the provisions of Section I of the 
"Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in 
January 1995 (the Guidelines) and the following provisions of this Section, as 
applicable.
Part B:
International Competitive Bidding
1.
Except as otherwise provided in Part C of this Section, Farm Mechanized 
Equipment 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.
Section II of the Guidelines is modified to provide that: (i) the General 
Procurement Notice (GPN) shall also be published in the local press; (ii) individual 
advertisement for specific contracts shall also be published in the local press; (iii) 
the period allowed for submission of bids shall be four weeks; and (iv) bid and 
payment currency shall be limited to one currency mostly used in international trade.
3.
The following provision shall apply to manufactured goods to be procured under 
contracts awarded in accordance with the provisions of paragraphs 1 and 2 of this Part 
B, namely, that the provisions of paragraphs 2.54 and 2.55 of the Guidelines and 
Appendix 2 thereto shall apply to goods manufactured in the territory of the Borrower.
Part C:
Other Procurement Procedures
1.
Limited International Bidding
Farm Mechanized Equipment: (i) estimated to cost less than $5,000,000 equivalent 
per contract, up to an aggregate amount not to exceed $7,500,000 equivalent; or (ii) 
which the Trustee agrees can only be purchased from a limited number of suppliers, 
regardless of the cost thereof, may be procured under contracts awarded in accordance 
with the provisions of paragraph 3.2 of the Guidelines.  In addition, the list of 
suppliers shall be derived from, inter alia, the expressions of interest received in 
response to the GPN.  Bidding documents may provide that the bidders can send their 
bids by fax, in this case, bid security will not be required.  Furthermore, the entity 
responsible for procurement will be required to put in place mechanisms to ensure 
confidentiality of bids received by fax.
2.
International Shopping
(a) 
Farm Mechanized Equipment, estimated to cost less than $200,000 
equivalent per contract, up to an aggregate amount not to exceed $1,900,000 
equivalent, may be procured under contracts awarded on the basis of international 
shopping procedures in accordance with the provisions of paragraphs 3.5 and 3.6 of the 
Guidelines and using standard documentation agreed with the Trustee.
(b) 
Office equipment, vehicles, veterinary drugs and vaccines, equipment for 
veterinary stations, shall be procured under contracts awarded on the basis of 
international shopping procedures in accordance with the provisions of paragraphs 3.5 
and 3.6 of the Guidelines and using standard documentation agreed with the Trustee.
3.
National Shopping
Office furnishings shall 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.
4.
Procurement from UN Agencies
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Goods may be procured from UN agencies such as FAO, ILO, UNICEF and WHO in 
accordance with the provisions of paragraph 3.9 of the Guidelines.  
Part D:
Review by the Trustee of Procurement Decisions
1.
Prior Review
With respect to each contract for Farm Mechanized Equipment, estimated to cost 
the equivalent of $5,000,000 or more, the procedures set forth in paragraphs 2 and 3 
of Appendix 1 to the Guidelines shall apply.
2.
Post Review
With respect to each contract not governed by paragraph 1 of this Part, the 
procedures set forth in paragraph 4 of Appendix 1 to the Guidelines shall apply.
Section II.  Employment of Consultants
1.
Consultants’ services, including Commercial Services (as such term is defined in 
paragraph 2(c) of Schedule 1 to this Agreement), shall be procured under contracts 
awarded in accordance with the provisions of the "Guidelines for the Use of 
Consultants by World Bank Borrowers and by The World Bank as Executing Agency" 
published by the Bank in August 1981 (the Consultant Guidelines).  For complex, 
time-based assignments, such contracts shall be based on the standard form of contract 
for consultants’ services issued by the Trustee, with such modifications as shall have 
been agreed by the Trustee.  Where no relevant standard contract documents have been 
issued by the Trustee, other standard forms acceptable to the Trustee shall be used.
2.
Notwithstanding the provisions of paragraph 1 of this Section, the provisions of 
the Consultant Guidelines requiring prior Trustee review or approval of budgets, short 
lists, selection procedures, letters of invitation, proposals, evaluation reports and 
contracts shall not apply to (a) contracts for the employment of consulting firms 
estimated to cost less than $100,000 equivalent each, or (b) contracts for the 
employment of individual consultants estimated to cost less than $50,000 equivalent 
each.  However, said exceptions to prior Trustee review shall not apply to (a) the 
terms of reference for such contracts, (b) single-source selection of consulting 
firms, (c) assignments of a critical nature, as reasonably determined by the Trustee, 
(d) amendments to contracts for the employment of consulting firms raising the 
contract value to $100,000 equivalent or above or (e) amendments to contracts for the 
employment of individual consultants raising the contract value to $50,000 equivalent 
or above.
SCHEDULE 4
Implementation Program 
1.
The Borrower shall, by June 30, 1996, establish and thereafter, until completion 
of the Project, maintain a Project Implementation Unit within MOF with adequate staff, 
funds, facilities and other resources reasonably required to carry out the Project at 
the State level in a manner satisfactory to the Trustee.  The staff of the PIU shall 
include representatives from MAWF.
2.
The Borrower shall, by July 31, 1996, establish and thereafter, until completion 
of the Project, maintain Regional Implementation Units under the PIU with adequate 
staff, funds, facilities and other resources reasonably required to carry out the 
Project at the regional level in a manner satisfactory to the Trustee.
3.
The Borrower shall, for the purpose of supplying Farm Mechanized Equipment under 
the Project, select farmers in accordance with the following priority and eligibility 
criteria to be applied singularly and collectively in the order of preference 
indicated below:
(a)
Priority:
(i)
The Borrower shall target farmers in areas of the country where 
more than 50 percent of farm machinery has been damaged or 
destroyed.
(ii)
The Borrower shall target farmers who have suffered substantial 
damage during the war, including the loss of a tractor.
Page  10
(iii)
The Borrower shall target refugees or displaced persons returning 
to regions where they formerly farmed.
(b)
Eligibility criteria:
(i)
Farmers must have title or user rights to the land.
(ii)
Farmers must demonstrate their intention to rebuild and operate 
the farm by starting repairs and/or beginning crop production.
(iii)
Farmers must demonstrate sufficient capacity to repay the in-kind 
loan based on expected farm cash flow.
(iv)
Farmers must be willing to provide guarantees from family, friends 
or neighbors, or provide property as loan collateral.
(v)
Farmers must have a minimum farm size of 10 hectares (owned or 
partially leased land, or share agreements with neighboring 
farmers) to be eligible for the supply of two-axle tractors.
(vi)
Farmers must have adequate servicing/storage conditions for the 
new tractor.
(vii)
Farmers with tractors must be able to hire/purchase some tractor 
implements and buy spare parts.
(viii)Farmers must have access to adequate marketing facilities 
(farmer/cooperative markets, cooperative processing centers, 
agro-processing enterprises, etc.).
4.
The Borrower shall include the following terms and conditions in each Supply and 
Credit Agreement:
(a)
The value of the Farm Mechanized Equipment supplied, expressed in 
convertible currency, shall be based on the import value of the equipment supplied.
(b)
The maximum value of each Supply and Credit Agreement shall not exceed 
the equivalent of $250,000.
(c)
The supply credit shall entail interest charges of up to 2% per annum.
(d)
The Borrower shall obtain adequate guarantees or necessary collateral for 
the credit.
(e)
The term of the supply credit shall be up to ten years with a grace 
period of two years.
(f)
The supply credit repayments shall be in cash and shall be channeled 
through selected local credit institutions.
(g)
Eligible Farmers shall be obliged to provide adequate servicing and 
storage facilities, and to maintain service and/or performance records for the Farm 
Mechanized Equipment supplied to them.
SCHEDULE 5
Special Account
1.
For the purposes of this Schedule:
(a)
the term "eligible Categories" means Categories (1) through (4) set forth 
in the table in paragraph 1 of Schedule 1 to this Agreement;
(b)
the term "eligible expenditures" means expenditures in respect of the 
reasonable cost of goods and services required for the Project and to be financed out 
of the amount of the Credit allocated from time to time to the eligible Category in 
accordance with the provisions of Schedule  1 to this Agreement; and
(c)
the term "Authorized Allocation" means an amount equivalent to $4,000,000 
to be withdrawn from the Credit Account and deposited in the Special Account pursuant 
to paragraph 3 (a) of this Schedule.
Page  11
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 Trustee 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 Trustee a request or requests for a 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 Trustee 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 Trustee requests for deposits into the Special 
Account at such intervals as the Trustee shall specify.
(ii)
Prior to or at the time of each such request, the Borrower shall 
furnish to the Trustee 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 Trustee 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 Trustee 
from the Credit Account under the respective eligible Category, 
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 Trustee shall reasonably request, furnish to the Trustee 
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 Trustee 
shall not be required to make further deposits into the Special Account:
(a)
if, at any time, the Trustee 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 Trustee, within the 
period of time specified in Section 3.03 (b) (ii) of this Agreement, any of the audit 
reports required to be furnished to the Trustee pursuant to said Section in respect of 
the audit of the records and accounts for the Special Account;
(c)
if, at any time, the Trustee 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 
Category minus the total amount of any outstanding special commitments entered into by 
the Trustee pursuant to Section 5.02 of the General Conditions with respect to the 
Project, shall equal the equivalent of twice the amount of the Authorized Allocation.
Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of 
the Credit allocated to the eligible Category shall follow such procedures as the 
Trustee shall specify by notice to the Borrower.  Such further withdrawals shall be 
made only after and to the extent that the Trustee 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 Trustee 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 Trustee, the Borrower shall, promptly upon notice from the Trustee: 
(A) provide such additional evidence as the Trustee may request; or (B) deposit into 
Page  12
the Special Account (or, if the Trustee shall so request, refund to the Trustee) an 
amount equal to the amount of such payment or the portion thereof not so eligible or 
justified.  Unless the Trustee shall otherwise agree, no further deposit by the 
Trustee 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 Trustee 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 Trustee, 
refund to the Trustee such outstanding amount.
(c)
The Borrower may, upon notice to the Trustee, refund to the Trustee all 
or any portion of the funds on deposit in the Special Account.
(d)
Refunds to the Trustee made pursuant to paragraphs 6 (a), (b) and (c) of 
this Schedule shall be credited to the Credit Account for subsequent withdrawal or for 
cancellation in accordance with the relevant provisions of this Agreement, including 
the General Conditions.
SCHEDULE 6
General Conditions 
ARTICLE I
Application to Trust Fund Credit Agreement
Section 1.01.  Application of General Conditions.  Without limitation or 
restriction upon the scope of any other provisions of the Trust Fund Credit Agreement, 
these General Conditions set forth certain basic terms and conditions applicable to 
the Trust Fund Credit Agreement.
ARTICLE II
Definitions; Headings
Section 2.01.  Definitions.  The following terms have the following meanings 
wherever used in these General Conditions:
(a)
"Trustee" means the International Development Association acting as 
trustee of the Trust Fund.
(b)
"Association" means the International Development Association.
(c)
"Bank" means the International Bank for Reconstruction and Development.
(d)
"Trust Fund Credit Agreement" means this Trust Fund Credit Agreement to 
which these General Conditions are made applicable.
(e)
"Credit" means the Credit provided for in the Trust Fund Credit 
Agreement.
(f)
"Borrower" means Bosnia and Herzegovina.
(g)
"Currency" of a country means the coin or currency which is legal tender 
for the payment of public and private debts in that country.
(h)
"Dollars" and the sign "$" mean dollars in the currency of the United 
States of America.
(i)
"Credit Account" means the account opened by the Trustee on its books in 
the name of the Borrower to which the amount of the Credit is credited.
(j)
"Project" means the project for which the Credit is granted, as described 
in the Trust Fund Credit Agreement and as the description thereof may be amended from 
time to time by agreement between the Borrower and the Trustee.
(k)
"External Debt" means any debt which is or may become payable other than 
in the currency of the country which is the Borrower.
(l)
"Effective Date" means the date on which the Trust Fund Credit Agreement 
shall enter into effect as provided in Section 12.03.
Page  13
(m)
"Taxes" includes imposts, levies, fees and duties of any nature, whether 
in effect at the date of the Trust Fund Credit Agreement or thereafter imposed.
(n)
"Closing Date" means the date specified in the Trust Fund Credit 
Agreement (as it may be extended) after which the Trustee may, by notice to the 
Borrower, terminate the right of the Borrower to withdraw from the Credit Account.
Section 2.02.  References.  References in these General Conditions to Articles 
or Sections are to Articles or Sections of these General Conditions.
Section 2.03.  Headings.  The headings of the Articles and Sections are inserted 
for convenience of reference only and are not a part of these General Conditions.
ARTICLE III
Credit Account; Service Charges;
Repayment; Place of Payment
Section 3.01.  Credit Account.  The amount of the Credit shall be credited to 
the Credit Account and may be withdrawn therefrom by the Borrower as provided in the 
Trust Fund Credit Agreement and in these General Conditions.
Section 3.02.  Service Charges.  The Borrower shall pay a service charge on the 
amount of the Credit withdrawn and outstanding from time to time at the rate specified 
in the Trust Fund Credit Agreement.
Section 3.03.  Computation of Service Charges.  Service charges shall be 
computed on the basis of a 360\1eday year of twelve 30\1eday months.
Section 3.04.  Repayment.  (a) The Borrower shall repay the principal amount of 
the Credit withdrawn from the Credit Account in installments as provided in the Trust 
Fund Credit Agreement.
(b) 
The Borrower shall have the right to repay in advance of maturity all or 
any part of the principal amount of one or more maturities of the Credit specified by 
the Borrower.
Section 3.05.  Place of Payment.  The principal of, and service charges on, the 
Credit shall be paid at such places as the Trustee shall reasonably request.
ARTICLE IV
Currency Provisions
Section 4.01.  Currencies in which Withdrawals are to be made.  Except as the 
Borrower and the Trustee shall otherwise agree, withdrawals from the Credit Account 
shall be made in the respective currencies in which the expenditures to be financed 
out of the proceeds of the Credit have been paid or are payable; provided, however, 
that withdrawals in respect of expenditures in the currency of the Borrower shall be 
made in such currency or currencies as the Trustee shall from time to time reasonably 
select.
Section 4.02.  Currencies in which Principal and Service Charges are Payable.  
(a) The Borrower shall pay the principal amount of, and service charges on, the Credit 
in the currency specified in the Trust Fund Credit Agreement for the purposes of this 
Section or in such other eligible currency or currencies as may from time to time be 
designated or selected pursuant to paragraphs (c) or (e) of this Section.
(b) 
For the purposes of this Section, the term "eligible currency" means the 
currency of any member of the Association which the Trustee from time to time 
determines to be freely convertible or freely exchangeable by the Trustee for 
currencies of other members of the Association for the purposes of its operations.
(c) 
If at any time the Borrower shall desire that, commencing on a given 
future payment date, such principal and service charges shall be payable in an 
eligible currency other than that so specified or than one previously designated 
pursuant to this paragraph (c) or selected pursuant to paragraph (e) below, the 
Borrower shall deliver to the Trustee, not less than three nor more than five months 
prior to such payment date, a notice in writing to that effect and designating such 
other eligible currency.  Upon receipt of such notice and commencing on such payment 
date, the currency so designated shall be the currency in which such principal and 
Page  14
service charges shall be payable.
(d) 
If at any time the Trustee shall determine that a currency payable 
pursuant to the provisions of this Section is not an eligible currency, the Trustee 
shall so notify the Borrower in writing and furnish the Borrower with a list of 
eligible currencies.
(e) 
Within thirty days from the date of such notice from the Trustee, the 
Borrower shall notify the Trustee in writing of its selection from such list of a 
currency in which payment shall be made, failing which the Trustee shall select a 
currency for such purpose from such list.  Upon such selection in either manner, such 
principal and service charges shall, commencing on the payment date next \1fsucceeding 
such thirty\1eday period, be payable in the currency so selected.
Section 4.03. Amount of Repayment.  The principal amount of the Credit repayable 
shall be the equivalent of the value of the currency or currencies withdrawn from the 
Credit Account expressed in terms of dollars as of the respective dates of withdrawal.
Section 4.04.  Purchase of Currency of Withdrawal with Other Currency.  If 
withdrawal shall be made in any currency which the Trustee shall have purchased with 
another currency for the purpose of such withdrawal, the portion of the Credit so 
withdrawn shall be deemed to have been withdrawn from the Credit Account in such other 
currency for the purposes of Section 4.03.
Section 4.05.  Valuation of Currencies.  Whenever it shall be necessary for the 
purposes of the Trust Fund Credit Agreement to determine the value of one currency in 
terms of another, such value shall be as reasonably determined by the Trustee.
Section 4.06.  Manner of Payment.  (a) Any payment required under the Trust Fund 
Credit Agreement to be made to the Trustee in the currency of a country shall be made 
in such manner, and in currency acquired in such manner, as shall be permitted under 
the laws of such country for the purpose of making such payment and effecting the 
deposit of such currency to the account of the Trustee with a depository of the 
Trustee in such country.
(b) 
The principal of, and service charges on, the Credit shall be paid 
without restrictions of any kind imposed by, or in the territory of, the Borrower.
ARTICLE V
Withdrawal of Proceeds of Credit
Section 5.01.  Withdrawal from the Credit Account.  The Borrower shall be 
entitled to withdraw from the Credit Account amounts expended or, if the Trustee shall 
so agree, amounts to be expended for the Project in accordance with the provisions of 
the Trust Fund Credit Agreement and of these General Conditions.  Except as the 
Borrower and the Trustee shall otherwise agree, no withdrawals shall be made: (a) on 
account of expenditures in the territories of any country which is not a member of the 
Bank or for goods procured 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 Trustee, is prohibited by a decision of the 
United Nations Security Council taken under Chapter VII of the Charter of the United 
Nations.
Section 5.02.  Special Commitments by the Trustee.  Upon the Borrower's request 
and upon such terms and conditions as shall be agreed upon between the Borrower and 
the Trustee, the Trustee may enter into special commitments in writing to pay amounts 
to the Borrower or others in respect of expenditures to be financed out of the 
proceeds of the Credit notwithstanding any subsequent suspension or cancellation by 
the Trustee or the Borrower.
Section 5.03.  Applications for Withdrawal or for Special Commitment.  When the 
Borrower shall desire to withdraw any amount from the Credit Account or to request the 
Trustee to enter into a special commitment pursuant to Section 5.02, the Borrower 
shall deliver to the Trustee a written application in such form, and containing such 
statements and agreements, as the Trustee shall reasonably request.  Applications for 
withdrawal, including the documentation required pursuant to this Article, shall be 
made promptly in relation to expenditures for the Project.
Section 5.04.  Reallocation.  Notwithstanding the allocation of an amount of the 
Credit or the percentages for withdrawal set forth or referred to in the Trust Fund 
Credit Agreement, if the Trustee has reasonably estimated that the amount of the 
Page  15
Credit then allocated to any withdrawal category set forth in the Trust Fund Credit 
Agreement or added thereto by amendment will be insufficient to finance the agreed 
percentage of all expenditures in that category, the Trustee may, by notice to the 
Borrower:
(a) 
reallocate to such category, to the extent required to meet the estimated 
shortfall, proceeds of the Credit which are then allocated to another category and 
which in the opinion of the Trustee are not needed to meet other expenditures; and
(b) 
if such reallocation cannot fully meet the estimated shortfall, reduce 
the percentage for withdrawal then applicable to such expenditures in order that 
further withdrawals under such category may continue until all expenditures thereunder 
shall have been made.
Section 5.05.  Evidence of Authority to Sign Applications for Withdrawal.  The 
Borrower shall furnish to the Trustee evidence of the authority of the person or 
persons authorized to sign applications for withdrawal and the authenticated specimen 
signature of any such person.
Section 5.06.  Supporting Evidence.  The Borrower shall furnish to the Trustee 
such documents and other evidence in support of the application as the Trustee shall 
reasonably request, whether before or after the Trustee shall have permitted any 
withdrawal requested in the application.
Section 5.07.  Sufficiency of Applications and Documents.  Each application and 
the accompanying documents and other evidence must be sufficient in form and substance 
to satisfy the Trustee that the Borrower is entitled to withdraw from the Credit 
Account the amount applied for and that the amount to be withdrawn from the Credit 
Account is to be used only for the purposes specified in the Trust Fund Credit 
Agreement.
Section 5.08.  Treatment of Taxes.  It is the policy of the Trustee that no 
proceeds of the Credit shall be withdrawn on account of payments for any taxes levied 
by, or in the territory of, the Borrower on goods or services, or on the importation, 
manufacture, procurement or supply thereof.  To that end, if the amount of any taxes 
levied on or in respect of any item to be financed out of the proceeds of the Credit 
decreases or increases, the Trustee may, by notice to the Borrower, increase or 
decrease the percentage for withdrawal set forth or referred to in respect of such 
item in the Trust Fund Credit Agreement as required to be consistent with such policy 
of the Trustee.
Section 5.09.  Payment by the Trustee.  The Trustee shall pay the amounts 
withdrawn by the Borrower from the Credit Account only to or on the order of the 
Borrower.
ARTICLE VI
Cancellation and Suspension
Section 6.01.  Cancellation by the Borrower.  The Borrower may, by notice to the 
Trustee, cancel any amount of the Credit which the Borrower shall not have withdrawn, 
except that the Borrower may not so cancel any amount of the Credit in respect of 
which the Trustee shall have entered into a special commitment pursuant to Section 
5.02.
Section 6.02.  Suspension by the Trustee.  If any of the following events of 
suspension shall have occurred and be continuing, the Trustee may, by notice to the 
Borrower, suspend in whole or in part the right of the Borrower to make withdrawals 
from the Credit Account:
(a)
The Borrower shall have failed to make payment (notwithstanding the fact 
that such payment may have been made by a third party) of principal, interest, service 
charges or any other amount due to the Trustee, the Association or the Bank: (i) under 
the Trust Fund Credit Agreement; (ii) under any other trust fund credit agreement 
between the Borrower and the Trustee; (iii) under any development credit agreement 
between the Borrower and the Association; or (iv) under any loan or guarantee 
agreement between the Borrower and the Bank.
(b)
The Borrower shall have failed to perform any other obligation under the 
Trust Fund Credit Agreement.
(c)
The Trustee, the Association or the Bank shall have suspended in whole or 
Page  16
in part the right of the Borrower to make withdrawals under any trust fund credit 
agreement with the Trustee, any development credit agreement with the Association or 
any loan agreement with the Bank, because of a failure by the Borrower to perform any 
of its obligations under such agreement.
(d)
As a result of events which have occurred after the date of the Trust 
Fund Credit Agreement, an extraordinary situation shall have arisen which shall make 
it improbable that the Project can be carried out or that the Borrower will be able to 
perform its obligations under the Trust Fund Credit Agreement.
(e)
The Borrower shall: (i) have ceased to be a member of the International 
Monetary Fund; (ii) have failed to become a member of the Bank and the Association by 
December 31, 1996 or such later date as may be agreed by the Trustee, or (iii) having 
become a member of the Bank and the Association, have ceased to be a member thereof;
(f)
After the date of the Trust Fund Credit Agreement and prior to the 
Effective Date, any event shall have occurred which would have entitled the Trustee to 
suspend the Borrower's right to make withdrawals from the Credit Account if the Trust 
Fund Credit Agreement had been effective on the date such event occurred.
(g)
A representation made by the Borrower, in or pursuant to the Trust Fund 
Credit Agreement, or any statement furnished in connection therewith, and intended to 
be relied upon by the Trustee in making the Credit, shall have been incorrect in any 
material respect.
(h)
Any other event specified in the Trust Fund Credit Agreement for the 
purposes of this Section shall have occurred.
The right of the Borrower to make withdrawals from the Credit Account shall 
continue to be suspended in whole or in part, as the case may be, until the event or 
events which gave rise to suspension shall have ceased to exist, unless the Trustee 
shall have notified the Borrower that the right to make withdrawals has been restored 
in whole or in part, as the case may be.
Section 6.03.  Cancellation by the Trustee.  If (a) the right of the Borrower to 
make withdrawals from the Credit Account shall have been suspended with respect to any 
amount of the Credit for a continuous period of thirty days, or (b) at any time, the 
Trustee determines, after consultation with the Borrower, that an amount of the Credit 
will not be required to finance the Project's costs to be financed out of the proceeds 
of the Credit, or (c) at any time, the Trustee determines that the procurement of any 
item is inconsistent with the procedures set forth or referred to in the Trust Fund 
Credit Agreement and establishes the amount of the expenditures in respect of such 
item which would otherwise have been eligible for financing out of the proceeds of the 
Credit, or (d) after the Closing Date, an amount of the Credit shall remain 
unwithdrawn from the Credit Account, the Trustee may, by notice to the Borrower, 
terminate the right of the Borrower to make withdrawals with respect to such amount.  
Upon the giving of such notice, such amount of the Credit shall be cancelled.  
Section 6.04.  Amounts Subject to Special Commitment not Affected by 
Cancellation or Suspension by the Trustee.  No cancellation or suspension by the 
Trustee shall apply to amounts subject to any special commitment entered into by the 
Trustee pursuant to Section 5.02 except as expressly provided in such commitment.
Section 6.05.  Application of Cancellation to Maturities of the Credit.  Except 
as the Borrower and the Trustee shall otherwise agree, any cancellation shall be 
applied pro rata to the several installments of the principal amount of the Credit 
maturing after the date of such cancellation.
Section 6.06.  Effectiveness of Provisions after Suspension or Cancellation.  
Notwithstanding any cancellation or suspension, all the provisions of the Trust Fund 
Credit Agreement shall continue in full force and effect except as specifically 
provided in this Article.
ARTICLE VII
Acceleration of Maturity
Section 7.01.  Events of Acceleration.  If any of the following events shall 
occur and shall continue for the period specified below, if any, then at any 
subsequent time during the continuance thereof, the Trustee, at its option, may, by 
notice to the Borrower, declare the principal of the Credit then outstanding to be due 
and payable immediately together with the service charges thereon and upon any such 
Page  17
declaration such principal, together with such charges, shall become due and payable 
immediately:
(a)
A default shall occur in the payment of principal or any other payment 
required under the Trust Fund Credit Agreement and such default shall continue for a 
period of thirty days.
(b)
A default shall occur in the payment by the Borrower of principal or 
interest or any other amount due to the Trustee, the Association or the Bank.
(c)
A default shall occur in the performance of any other substantial 
obligation on the part of the Borrower under the Trust Fund Credit Agreement, and such 
default shall continue for a period of sixty days after notice thereof shall have been 
given by the Trustee to the Borrower.
(d)
Any other event specified in the Trust Fund Credit Agreement for the 
purposes of this Section shall have occurred and shall continue for the period, if 
any, specified in the Trust Fund Credit Agreement.
ARTICLE VIII
Taxes
Section 8.01.  Taxes.  (a) The principal of, and other charges on, the Credit 
shall be paid without deduction for, and free from, any taxes levied by, or in the 
territory of, the Borrower.
(b) 
The Trust Fund Credit Agreement, and any other agreement to which these 
General Conditions apply, shall be free from any taxes levied by, or in the territory 
of, the Borrower on or in connection with the execution, delivery or registration 
thereof.
ARTICLE IX
Cooperation and Information; Financial 
and Economic Data; Project Implementation
Section 9.01.  Cooperation and Information.  
(a)
The Borrower and the Trustee shall cooperate fully to assure that the 
purposes of the Credit will be accomplished.  To that end, the Borrower and the 
Trustee shall:
(i)
from time to time, at the request of any one of them, exchange 
views with regard to the progress of the Project, the purposes of 
the Credit, and the performance of their respective obligations 
under the Trust Fund Credit Agreement; and furnish to the other 
party all such information related thereto as it shall reasonably 
request; and
(b) 
The Borrower shall afford all reasonable opportunity for representatives 
of the Trustee to visit any site for purposes related to the Credit.
Section 9.02.  Financial and Economic Data.  The Borrower shall furnish to the 
Trustee all such information as the Trustee shall reasonably request with respect to 
its financial and economic conditions in its territory including its balance of 
payments and its external debt as well as that of its political or administrative 
subdivisions and any entity owned or controlled by, or operating for the account or 
benefit of the Borrower or any such subdivision, and any institution performing the 
functions of a central bank or exchange stabilization fund, or similar functions, for 
the Borrower.  
Section 9.03.  Insurance.  The Borrower shall insure or cause to be insured, or 
make adequate provision for the insurance of, the imported goods to be financed out of 
the proceeds of the Credit against hazards incident to the acquisition, transportation 
and delivery thereof to the place of use or installation.  Any indemnity for such 
insurance shall be payable in a freely usable currency to replace or repair such 
goods.
Section 9.04.  Use of Goods and Services.  Except as the Trustee shall otherwise 
agree, the Borrower shall cause all goods and services financed out of the proceeds of 
the Credit to be used exclusively for the purposes of the Project.
Page  18
Section 9.05.  Plans and Schedules.  The Borrower shall furnish, or cause to be 
furnished, to the Trustee promptly upon their preparation, the plans, specifications, 
reports, contract documents and construction and procurement schedules for the 
Project, and any material modifications thereof or additions thereto, in such detail 
as the Trustee shall reasonably request.
Section 9.06.  Records and Reports.  (a) The Borrower shall: (i) maintain 
records and procedures adequate to record and monitor the progress of the Project 
(including its cost and the benefits to be derived from it), to identify the goods and 
services financed out of the proceeds of the Credit, and to disclose their use in the 
Project; (ii) within its capacity, enable the Trustee's representatives to visit any 
facilities and construction sites included in the Project and to examine the goods 
financed out of the proceeds of the Credit and any plants, installations, sites, 
works, buildings, property, equipment, records and documents relevant to the 
performance of the obligations of the Borrower under the Trust Fund Credit Agreement; 
and (iii) furnish to the Trustee at regular intervals all such information as the 
Trustee shall reasonably request concerning the Project, its cost and, where 
appropriate, the benefits to be derived from it, the expenditure of the proceeds of 
the Credit and the goods and services financed out of such proceeds.
(b) 
Upon the award of any contract for goods or services to be financed out 
of the proceeds of the Credit, the Trustee may publish a description thereof, the name 
and nationality of the party to which the contract was awarded and the contract price.
(c) 
Promptly after completion of the Project, but in any event not later than 
six months after the Closing Date or such later date as may be agreed for this purpose 
between the Borrower and the Trustee, the Borrower shall prepare and furnish to the 
Trustee a report, of such scope and in such detail as the Trustee shall reasonably 
request, on the execution and initial operation of the Project, its cost and the 
benefits derived and to be derived from it, the performance by the Borrower and the 
Trustee of their respective obligations under the Trust Fund Credit Agreement and the 
accomplishment of the purposes of the Credit.
Section 9.07.  Maintenance.  The Borrower shall at all times operate and 
maintain, or cause to be operated and maintained, any facilities relevant to the 
Project, and promptly as needed, make or cause to be made all necessary repairs and 
renewals thereof.
ARTICLE X
Failure to Exercise Rights; Arbitration
Section 10.01.  Enforceability.  The rights and obligations of the Borrower and 
the Trustee under the Trust Fund Credit Agreement shall be valid and enforceable in 
accordance with their terms notwithstanding the law of any State or political 
subdivision thereof to the contrary.  Neither the Borrower nor the Trustee shall be 
entitled in any proceeding under this Article to assert any claim that any provision 
of these General Conditions or the Trust Fund Credit Agreement is invalid or 
unenforceable because of any provision of the Articles of Agreement of the Trustee or 
any document or instrument constituting the Trust Fund.  
  Section 10.02.  Failure to Exercise Rights.  No delay in exercising, or 
omission to exercise, any right, power or remedy accruing to either party under the 
Trust Fund Credit Agreement upon any default shall impair any such right, power or 
remedy or be construed to be a waiver thereof or an acquiescence in such default.  No 
action of such party in respect of any default, or any acquiescence by it in any 
default, shall affect or impair any right, power or remedy of such party in respect of 
any other or subsequent default.
Section 10.03.  Arbitration.  (a) Any controversy between the parties to the 
Trust Fund Credit Agreement and any claim by either such party against the other 
arising under the Trust Fund Credit Agreement which has not been settled by agreement 
of the parties shall be submitted to arbitration by an Arbitral Tribunal as 
hereinafter provided.
(b) 
The parties to such arbitration shall be the Trustee and the Borrower.
(c) 
The Arbitral Tribunal shall consist of three arbitrators appointed as 
follows: one arbitrator shall be appointed by the Trustee; a second arbitrator shall 
be appointed by the Borrower; and the third arbitrator (hereinafter sometimes called 
the Umpire) shall be appointed by agreement of the parties or, if they shall not 
Page  19
agree, by the President of the International Court of Justice or, failing appointment 
by said President, by the Secretary\1eGeneral of the United Nations.  If either of the 
parties shall fail to appoint an arbitrator, such arbitrator shall be appointed by the 
Umpire.  In case any arbitrator appointed in accordance with this Section shall 
resign, die or become unable to act, a successor arbitrator shall be appointed in the 
same manner as herein prescribed for the appointment of the original arbitrator and 
such successor shall have all the powers and duties of such original arbitrator.
(d) 
An arbitration proceeding may be instituted under this Section upon 
notice by the party instituting such proceeding to the other party.  Such notice shall 
contain a statement setting forth the nature of the controversy or claim to be 
submitted to arbitration, the nature of the relief sought, and the name of the 
arbitrator appointed by the party instituting such proceeding.  Within thirty days 
after such notice, the other party shall notify to the party instituting the 
proceeding the name of the arbitrator appointed by such other party.
(e) 
If within sixty days after the notice instituting the arbitration 
proceeding, the parties shall not have agreed upon an Umpire, either party may request 
the appointment of an Umpire as provided in paragraph (c) of this Section.
(f) 
The Arbitral Tribunal shall convene at such time and place as shall be 
fixed by the Umpire.  Thereafter, the Arbitral Tribunal shall determine where and when 
it shall sit.
(g) 
The Arbitral Tribunal shall decide all questions relating to its 
competence and shall, subject to the provisions of this Section and except as the 
parties shall otherwise agree, determine its procedure.  All decisions of the Arbitral 
Tribunal shall be by majority vote.
(h) 
The Arbitral Tribunal shall afford to the parties a fair hearing and 
shall render its award in writing.  Such award may be rendered by default.  An award 
signed by a majority of the Arbitral Tribunal shall constitute the award of such 
Tribunal.  A signed counterpart of the award shall be transmitted to each party.  Any 
such award rendered in accordance with the provisions of this Section shall be final 
and binding upon the parties to the Trust Fund Credit Agreement.  Each party shall 
abide by and comply with any such award rendered by the Arbitral Tribunal in 
accordance with the provisions of this Section.
(i) 
The parties shall fix the amount of the remuneration of the arbitrators 
and such other persons as shall be required for the conduct of the arbitration 
proceedings.  If the parties shall not agree on such amount before the Arbitral 
Tribunal shall convene, the Arbitral Tribunal shall fix such amount as shall be 
reasonable under the circumstances.  Each party shall defray its own expenses in the 
arbitration proceedings.  The costs of the Arbitral Tribunal shall be divided between 
and borne equally by the parties.  Any question concerning the division of the costs 
of the Arbitral Tribunal or the procedure for payment of such costs shall be 
determined by the Arbitral Tribunal.
(j) 
The provisions for arbitration set forth in this Section shall be in lieu 
of any other procedure for the settlement of controversies between the parties to the 
Trust Fund Credit Agreement or of any claims by either party against the other party 
arising thereunder.
(k) 
The Trustee shall not be entitled to enter judgment against the Borrower 
upon the award, to enforce the award against the Borrower by execution or to pursue 
any other remedy against the Borrower for the enforcement of the award, except as such 
procedure may be available against the Borrower otherwise than by reason of the 
provisions of this Section.  If, within thirty days after counterparts of the award 
shall have been delivered to the parties, the award shall not be complied with by the 
Trustee, the Borrower may take any such action for the enforcement of the award 
against the Trustee.
(l) 
Service of any notice or process in connection with any proceeding under 
this Section or in connection with any proceeding to enforce any award rendered 
pursuant to this Section may be made in the manner provided in Section 11.01.  The 
parties to the Trust Fund Credit Agreement waive any and all other requirements for 
the service of any such notice or process.
ARTICLE XI
Miscellaneous Provisions
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Section 11.01.  Notices and Requests.  Any notice or request required or 
permitted to be given or made under the Trust Fund Credit Agreement and any other 
agreement between the parties contemplated by the Trust Fund Credit Agreement shall be 
in writing.  Except as otherwise provided in Section 12.03, such notice or request 
shall be deemed to have been duly given or made when it shall be delivered by hand or 
by mail, telegram, cable or telex to the party to which it is required or permitted to 
be given or made at such party's address specified in the Trust Fund Credit Agreement, 
or at such other address as such party shall have designated by notice to the party 
giving such notice or making such request.
Section 11.02.  Evidence of Authority.  The Borrower shall furnish to the 
Trustee sufficient evidence of the authority of the person or persons who will, on 
behalf of the Borrower, take any action or execute any documents required or permitted 
to be taken or executed by the Borrower under the Trust Fund Credit Agreement, and the 
authenticated specimen signature of each such person.
Section 11.03.  Action on Behalf of the Borrower.  Any action required or 
permitted to be taken, and any documents required or permitted to be executed, under 
the Trust Fund Credit Agreement on behalf of the Borrower may be taken or executed by 
the representative of the Borrower designated in the Trust Fund Credit Agreement for 
the purposes of this Section or any person thereunto authorized in writing by such 
representative.  Any modification or amplification of the provisions of the Trust Fund 
Credit Agreement may be agreed to on behalf of the Borrower by written instrument 
executed on behalf of the Borrower by the representative so designated or any person 
thereunto authorized in writing by such representative, provided that, in the opinion 
of such representative, such modification or amplification is reasonable in the 
circumstances and will not substantially increase the obligations of the Borrower 
under the Trust Fund Credit Agreement.  The Trustee may accept the execution by such 
representative or other person of any such instrument as conclusive evidence that in 
the opinion of such representative any modification or amplification of the provisions 
of the Trust Fund Credit Agreement effected by such instrument is reasonable in the 
circumstances and will not substantially increase the obligations of the Borrower 
thereunder.
Section 11.04.  Execution in Counterparts.  The Trust Fund Credit Agreement may 
be executed in several counterparts, each of which shall be an original.
ARTICLE XII
Effective Date; Termination
Section 12.01.  Conditions Precedent to Effectiveness of the Trust Fund Credit 
Agreement.  The Trust Fund Credit Agreement shall not become effective until evidence 
satisfactory to the Trustee shall have been furnished to the Trustee that:
(a)
the execution and delivery of the Trust Fund Credit Agreement on behalf 
of the Borrower have been duly authorized or ratified by all necessary governmental 
action; and
(b)
the event specified in the Trust Fund Credit Agreement as a condition to 
its effectiveness has occurred.
(c)
that the Trust Fund Credit Agreement has been duly authorized or ratified 
by, and executed and delivered on behalf of, the Borrower and is legally binding upon 
the Borrower in accordance with its terms; and
(d)
such other matters as shall be specified in the Trust Fund Credit 
Agreement or as shall be reasonably requested by the Trustee in connection therewith.
Section 12.03.  Effective Date.  (a) Except as the Borrower and the Trustee 
shall otherwise agree, the Trust Fund Credit Agreement shall enter into effect on the 
date on which the Trustee dispatches to the Borrower notice of its acceptance of the 
evidence required by Section 12.01.
(b)
If, before the Effective Date, any event shall have occurred which would 
have entitled the Trustee to suspend the right of the Borrower to make withdrawals 
from the Credit Account if the Trust Fund Credit Agreement had been effective, the 
Trustee may postpone the dispatch of the notice referred to in paragraph (a) of this 
Section until such event or events shall have ceased to exist.
Section 12.04.  Termination of the Trust Fund Credit Agreement for Failure to 
Become Effective.  If the Trust Fund Credit Agreement shall not have entered into 
Page  21
effect by the date specified therein for the purposes of this Section, the Trust Fund 
Credit Agreement and all obligations of the parties thereunder shall terminate, unless 
the Trustee, after consideration of the reasons for the delay, shall establish a later 
date for the purposes of this Section.  The Trustee shall promptly notify the Borrower 
of such later date.
Section 12.05.  Termination of the Trust Fund Credit Agreement on Full Payment.  
If and when the entire principal amount of the Credit withdrawn from the Credit 
Account and all charges which shall have accrued on the Credit shall have been paid, 
the Trust Fund Credit Agreement and all obligations of the parties thereunder shall 
forthwith terminate.