LOAN AGREEMENT
LOAN NUMBER 3007-CAM (SF)
(Special Operations)
(Climate Resilient Rice Commercialization Sector Development Project)
between
KINGDOM OF CAMBODIA
and
ASIAN DEVELOPMENT BANK
DATED 26 AUGUST 2013
CAM 44321
LOAN AGREEMENT
(Special Operations)
LOAN AGREEMENT dated 26 August 2013 between KINGDOM OF CAMBODIA (“Borrower”) and ASIAN DEVELOPMENT BANK (“ADB”).
WHEREAS
(A) by a loan agreement of even date herewith between the Borrower and ADB (“Program Loan Agreement”), ADB has agreed to provide a loan to the Borrower in various currencies equivalent to fifteen million nine hundred fifty-five thousand Special Drawing Rights (SDR15,955,000) for the purposes of the Climate Resilient Rice Commercialization Sector Development Program (“Program”), described in Schedule 1 to the Program Loan Agreement;
(B) in support of the Program, the Borrower has applied to ADB for a loan for the purposes of the Climate Resilient Rice Commercialization Sector Development Project (“Project”), described in Schedule 1 to this Loan Agreement;
(C) by a loan agreement of even date herewith between the Borrower and ADB (“SCF Loan Agreement”), ADB has agreed to provide from the ADB Strategic Climate Fund a loan in an amount of five million Dollars ($5,000,000) for the purposes of the Project (“SCF Loan”);
(D) by a grant agreement of even date herewith between the Borrower and ADB (“SCF Grant Agreement”), ADB has agreed to provide from the ADB Strategic Climate Fund a grant in an amount of four million five hundred thousand Dollars ($4,500,000) for the purposes of the Project (“SCF Grant”);
(E) by a grant agreement of even date herewith between the Borrower and ADB (“GAFSP Grant Agreement”), ADB has agreed to administer a grant provided by the Global Agriculture and Food Security Program (“GAFSP”) in an amount of fourteen million six hundred thousand Dollars ($14,600,000) for the purposes of the Project (“GAFSP Grant”); and
(F) ADB has agreed to make a loan to the Borrower from ADB's Special Funds resources upon the terms and conditions set forth herein;
NOW THEREFORE the parties agree as follows:
ARTICLE I
Loan Regulations; Definitions
Section 1.01. All provisions of the Special Operations Loan Regulations of ADB, dated 1 January 2006 (“Loan Regulations”), are hereby made
applicable to this Loan Agreement with the same force and effect as if they were fully set forth herein.
Section 1.02. Wherever used in this Loan Agreement, the several terms defined in the Loan Regulations and the Program Loan Agreement have the respective meanings therein set forth unless modified herein or the context otherwise requires. Additional terms used in this Loan Agreement have the following meanings:
(a) “Consulting Guidelines” means the Guidelines on the Use of Consultants by Asian Development Bank and its Borrowers (2010, as amended from time to time);
(b) “Consulting Services” means the services to be financed out of the proceeds of the Loan, SCF Grant and the GAFSP Grant as described in paragraph 2, Output 5 of Schedule 1 to this Loan Agreement;
(c) “Environmental Assessment and Review Framework” or “EARF” means the environmental assessment and review framework for the Project, including any update thereto, prepared and submitted by the Borrower and cleared by ADB;
(d) “Environmental Management Plan” or “EMP” means each environmental management plan for a Subproject, including any update thereto, incorporated in the IEE;
(e) “Environmental Safeguards” means the principles and requirements
set forth in Chapter V, Appendix 1, and Appendix 4 (as applicable) of the SPS;
(f) “GAP” means the Gender Action Plan for the Project;
(g) “Goods” means equipment and materials to be financed out of the proceeds of the Loan, SCF Loan, SCF Grant and the GAFSP Grant, including related services such as transportation, insurance, installation, commissioning, training, and initial maintenance, but excluding Consulting Services;
(h) “Initial Environmental Examination” or “IEE” means the initial environmental examination for a Subproject, including any update thereto, prepared and submitted by the Borrower pursuant to the requirements set forth in the EARF and cleared by ADB;
(i) “Involuntary Resettlement Safeguards” means the principles and
requirements set forth in Chapter V, Appendix 2, and Appendix 4 (as applicable) of the SPS;
(j) “List of Candidate Subprojects” means the list of candidate subprojects eligible to be financed under the Project, as updated from time to time;
(k) “Loan Disbursement Handbook” means ADB’s Loan Disbursement
Handbook (2012, as amended from time to time);
(l) “MAFF” means the Ministry of Agriculture, Forestry and Fisheries of the Borrower or any successor thereto acceptable to ADB;
(m) “MLMUPC” means the Ministry of Land Management, Urban Planning
and Construction of the Borrower or any successor thereto acceptable to ADB;
(n) “MOWRAM” means the Ministry of Water Resources and Meteorology
of the Borrower or any successor thereto acceptable to ADB;
(o) “NIO” means a national implementation office within MAFF, MOWRAM and MLMUPC, respectively;
Agreement;
(p) “Output” means an output specified in Schedule 1 to this Loan
(q) “XXX” means the program administration manual for the Program dated 3 May 2013 and agreed between the Borrower and ADB, as updated from time to time in accordance with the respective administrative procedures of the Borrower and ADB;
Province;
(r) “PIO” means a provincial implementation office in each Project
(s) “PMO” means the program management office within MEF;
(t) “Procurement Guidelines” means ADB’s Procurement Guidelines
(2010, as amended from time to time);
(u) “Procurement Manual” means the Procurement Manual under the Standard Operating Procedures prepared by the Borrower and endorsed by ADB, which sets forth the procurement-related policies and procedures for externally-financed projects and programs;
(v) “Procurement Plan” means the procurement plan for the Project dated 3 May 2013 and agreed between the Borrower and ADB, as updated from time to time in accordance with the Procurement Guidelines, the Consulting Guidelines, and other arrangements agreed with ADB (which include the Procurement Standard Operating Procedures and the Procurement Manual as updated from time to time);
(w) “Project Executing Agency” for the purposes of, and within the meaning of, the Loan Regulations means the MEF, or any successor thereto acceptable to ADB, which is responsible for the carrying out of the Project;
(x) “Project Facilities” means the equipment to be provided and the
facilities to be constructed, upgraded and/or rehabilitated under the Project;
(y) “Project Province” means Battambang, Kampong Thom or Prey Veng;
(z) “Provincial Steering Committee” means the provincial steering committee in each Project Province;
(aa) “Resettlement Framework” or “RF” means the resettlement framework for the Project, including any update thereto, prepared and submitted by the Borrower and cleared by ADB;
(bb) “Resettlement Plan” or “RP” means each resettlement plan for a Subproject, including any update thereto, prepared and submitted by the Borrower pursuant to the requirements set forth in the RF and cleared by ADB;
(cc) “Safeguard Policy Statement” or “SPS” means ADB's Safeguard Policy
Statement (2009);
(dd) “Safeguards Monitoring Report” means each report prepared and submitted by the Borrower to ADB that describes progress with implementation of and compliance with the EMP and the RP, including any corrective and preventative actions;
(ee) “Standard Operating Procedures” means the standard operating procedures of the Borrower (22 May 2012, as amended from time to time) providing procedures applicable to all externally-financed projects and programs;
(ff) “Subproject” means a subproject to be carried out in a Project Province utilizing the proceeds of the Loan, SCF Loan, SCF Grant and the GAFSP Grant to
(i) rehabilitate irrigation systems; (ii) construct paddy drying and storage facilities; or
(iii) construct seed cleaning, drying, grading and storage facilities; and
(gg) “Works” means construction or civil works to be financed out of the proceeds of the Loan, SCF Loan, SCF Grant and the GAFSP Grant including services such as drilling or mapping, and project related services that are provided as part of a single responsibility or turnkey contract, but excluding Consulting Services.
ARTICLE II
The Loan
Section 2.01. ADB agrees to lend to the Borrower from ADB's Special Funds resources an amount in various currencies equivalent to twenty million six hundred eight thousand Special Drawing Rights (SDR20,608,000).
Section 2.02. (a) The Borrower shall pay to ADB an interest charge at the rate of 1% per annum during the grace period, and 1.5% per annum thereafter, on the amount of the Loan withdrawn from the Loan Account and outstanding from time to time.
(b) The term “grace period” as used in subsection (a) hereinabove means the period prior to the first Principal Payment Date in accordance with the amortization schedule set forth in Schedule 2 to this Loan Agreement.
Section 2.03. The interest charge and any other charge on the Loan shall be payable semiannually on 1 June and 1 December in each year.
Section 2.04. The Borrower shall repay the principal amount of the Loan withdrawn from the Loan Account in accordance with the amortization schedule set forth in Schedule 2 to this Loan Agreement.
Section 2.05. The currency of repayment of the principal amount of the Loan and the currency of payment of the interest charge for the purposes of Sections 4.03(a) and 4.04 of the Loan Regulations shall be the Dollar.
ARTICLE III
Use of Proceeds of the Loan
Section 3.01. The Borrower shall cause the proceeds of the Loan to be applied to the financing of expenditures on the Project in accordance with the provisions of this Loan Agreement.
Section 3.02. The proceeds of the Loan shall be allocated and withdrawn in accordance with the provisions of Schedule 3 to this Loan Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and ADB.
Section 3.03. Except as ADB may otherwise agree, the Borrower shall procure, or cause to be procured, the items of expenditure to be financed out of the proceeds of the Loan in accordance with the provisions of Schedule 4 to this Loan Agreement.
Section 3.04. Except as ADB may otherwise agree, the Borrower shall cause all items of expenditure financed out of the proceeds of the Loan to be used exclusively in the carrying out of the Project.
Section 3.05. Withdrawals from the Loan Account in respect of Goods, Works, and Consulting Services shall be made only on account of expenditures relating to Goods, Works, and Consulting Services which meet the eligibility requirements as shall have been specified by ADB from time to time.
Section 3.06. The Loan Closing Date for the purposes of Section 8.02 of the Loan Regulations shall be 31 March 2020 or such other date as may from time to time be agreed between the Borrower and ADB.
ARTICLE IV
Particular Covenants
Section 4.01. In the carrying out of the Project and operation of the Project facilities, the Borrower shall perform, or cause to be performed, all obligations set forth in Schedule 5 to this Loan Agreement.
Section 4.02. (a) The Borrower shall (i) maintain separate accounts and records for the Project; (ii) prepare annual financial statements for the Project
in accordance with accounting principles acceptable to ADB; (iii) have such financial statements audited annually by independent auditors whose qualifications, experience and terms of reference are acceptable to ADB, in accordance with international standards for auditing or the national equivalent acceptable to ADB; (iv) as part of each such audit, have the auditors prepare a report (which includes the auditors’ opinion on the use of the Loan proceeds and compliance with the financial covenants of this Loan Agreement as well as on the use of the procedures for the imprest fund and statement of expenditures) and a management letter (which sets out the deficiencies in the internal control of the Project that were identified in the course of the audit, if any); and (v) furnish to ADB, no later than 6 months after the end of each related fiscal year, copies of such audited financial statements, audit report and management letter, all in the English language, and such other information concerning these documents and the audit thereof as ADB shall from time to time reasonably request.
(b) ADB shall disclose the annual audited financial statements for the Project and the opinion of the auditors on the financial statements within 30 days of the date of their receipt by posting them on ADB’s website.
(c) The Borrower shall enable ADB, upon ADB's request, to discuss the financial statements for the Project and the Borrower's financial affairs where they relate to the Project with the auditors appointed pursuant to subsection (a)(iii) hereinabove, and shall authorize and require any representative of such auditors to participate in any such discussions requested by ADB. This is provided that such discussions shall be conducted only in the presence of an authorized officer of the Borrower, unless the Borrower shall otherwise agree.
Section 4.03. The Borrower shall enable ADB's representatives to inspect the Project, the Goods and Works, and any relevant records and documents.
ARTICLE V
Suspension; Acceleration of Maturity
Section 5.01. The following are specified as additional events for suspension of the right of the Borrower to make withdrawals from the Loan Account for the purposes of Section 8.01(m) of the Loan Regulations:
(a) the Borrower shall have failed to perform one or more of its obligations under the Program Loan Agreement;
(b) the Borrower shall have failed to perform one or more of its obligations under the SCF Loan Agreement;
(c) the Borrower shall have failed to perform one or more of its obligations under the SCF Grant Agreement; or
(d) the Borrower shall have failed to perform one or more of its obligations under the GAFSP Grant Agreement.
Section 5.02. The following are specified as additional events for acceleration of maturity for the purposes of Section 8.07(d) of the Loan Regulations: any of the events specified in Section 5.01 of this Loan Agreement shall have occurred.
ARTICLE VI
Effectiveness
Section 6.01. The following are specified as additional conditions to the effectiveness of this Loan Agreement for the purposes of Section 9.01(f) of the Loan Regulations:
(a) the Program Loan Agreement shall have been duly executed and delivered on behalf of the Borrower, shall have become legally binding upon the Borrower in accordance with its terms, and all conditions precedent to its effectiveness (other than a condition requiring the effectiveness of this Loan Agreement) shall have been fulfilled;
(b) the SCF Loan Agreement shall have been duly executed and delivered on behalf of the Borrower, shall have become legally binding upon the Borrower in accordance with its terms, and all conditions precedent to its effectiveness (other than a condition requiring the effectiveness of this Loan Agreement) shall have been fulfilled;
(c) the SCF Grant Agreement shall have been duly executed and delivered on behalf of the Borrower, shall have become legally binding upon the Borrower in accordance with its terms, and all conditions precedent to its effectiveness (other than a condition requiring the effectiveness of this Loan Agreement) shall have been fulfilled;
(d) the GAFSP Grant Agreement shall have been duly executed and delivered on behalf of the Borrower, shall have become legally binding upon the Borrower in accordance with its terms, and all conditions precedent to its effectiveness (other than a condition requiring the effectiveness of this Loan Agreement) shall have been fulfilled;
(e) the Borrower shall have submitted to ADB for approval the initial List of Candidate Subprojects containing candidate subprojects pre-screened in accordance with the criteria set forth in the XXX;
(f) MEF shall have established the PMO and appointed key staff including a PMO director, procurement officer, finance and accounting officer and a safeguard officer;
(g) MAFF, MOWRAM, and MLMUPC shall each have established a NIO and appointed key staff including a NIO manager, finance and accounting officer and, at least, two (2) technical staff;
(h) each Project Province shall have established a Provincial Steering Committee; and
(i) each Project Province shall have established a PIO and appointed key staff including a PIO manager, safeguard officer and, at least, two (2) technical staff.
Section 6.02. A date 90 days after the date of this Loan Agreement is specified for the effectiveness of this Loan Agreement for the purposes of Section 9.04 of the Loan Regulations.
ARTICLE VII
Miscellaneous
Section 7.01. The Minister of Economy and Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.02 of the Loan Regulations.
Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the Loan Regulations:
For the Borrower
The Ministry of Economy and Finance Phnom Penh
Cambodia Facsimile Numbers:
(855-23) 427 798
(855-23) 428 424.
For ADB
Asian Development Bank 0 XXX Xxxxxx Xxxxxxxxxxx Xxxx
0000 Xxxxx Xxxxxx Xxxxxxxxxxx
Facsimile Numbers:
(000) 000-0000
(000) 000-0000.
SCHEDULE 1
Description of the Project
1. The objective of the Project is to enhance production of quality rice in Cambodia while preserving the natural resource base.
2. The Project shall comprise the following Outputs:
Output 1: Improvement of Agricultural Land-use Zoning
This Output comprises: (i) establishing land-use zones; (ii) updating rice ecosystem and soil classification maps for the identification of higher yielding rice growing areas; (iii) incorporating agro-ecosystem analyses into commune land-use plans; and (iv) capacity building of MAFF and MLMUPC to jointly undertake agriculture land-use planning.
Output 2: Development of Climate Resilient Rice Value Chain Infrastructure
This Output comprises: (i) rehabilitating and climate proofing irrigation systems; (ii) constructing paddy drying and storage facilities; and (iii) constructing seed cleaning, drying, grading and storage facilities.
Output 3: Enhancement of Rice Value Chain Support Services to Improve Quality of Cambodian Rice
This Output comprises: (i) improving availability and quality of commercial rice seed; (ii) upgrading technical extension material to guide production in various rice agro-ecosystems; (iii) capacity building (technical and financial) of mill managers and operators; and (iv) facilitating access to credit by farmers, traders and millers.
Output 4: Pilot Weather-Indexed Crop Insurance
This Output comprises: (i) undertaking a detailed feasibility study to determine the appropriateness of a weather-indexed crop insurance scheme; (ii) designing the operational parameters, product penetration plan, and institutional arrangements; and (iii) piloting the scheme in selected areas in the Project Provinces.
Output 5: Efficient Project Management and Implementation
This Output comprises: (i) effective project management; (ii) capacity building of the PMO and each NIO and PIO; and (iii) coordination between the Program and the Project, all supported by Consulting Services to ensure effective and smooth implementation of the Project.
3. The Project is expected to be completed by 30 September 2019.
SCHEDULE 2
Amortization Schedule
(Climate Resilient Rice Commercialization Sector Development Project)
Date Payment Due | Payment of Principal (expressed in Special Drawing Rights)* |
1 December 2021 | 429,333 |
1 June 2022 | 429,333 |
1 December 2022 | 429,333 |
1 June 2023 | 429,333 |
1 December 2023 | 429,333 |
1 June 2024 | 429,333 |
1 December 2024 | 429,333 |
1 June 2025 | 429,333 |
1 December 2025 | 429,333 |
1 June 2026 | 429,333 |
1 December 2026 | 429,333 |
1 June 2027 | 429,333 |
1 December 2027 | 429,333 |
1 June 2028 | 429,333 |
1 December 2028 | 429,333 |
1 June 2029 | 429,333 |
1 December 2029 | 429,333 |
1 June 2030 | 429,333 |
1 December 2030 | 429,333 |
1 June 2031 | 429,333 |
1 December 2031 | 429,333 |
1 June 2032 | 429,333 |
1 December 2032 | 429,333 |
1 June 2033 | 429,333 |
1 December 2033 | 429,333 |
1 June 2034 | 429,333 |
1 December 2034 | 429,333 |
1 June 2035 | 429,333 |
1 December 2035 | 429,333 |
1 June 2036 | 429,333 |
1 December 2036 | 429,333 |
1 June 2037 | 429,333 |
1 December 2037 | 429,333 |
1 June 2038 | 429,333 |
1 December 2038 | 429,333 |
1 June 2039 | 429,333 |
1 December 2039 | 429,333 |
1 June 2040 | 429,333 |
1 December 2040 | 429,333 |
1 June 2041 | 429,333 |
Schedule 2 | ||
1 December 2041 | 429,333 | |
1 June 2042 | 429,333 | |
1 December 2042 | 429,333 | |
1 June 2043 | 429,333 | |
1 December 2043 | 429,333 | |
1 June 2044 | 429,333 | |
1 December 2044 | 429,333 | |
1 June 2045 | 429,349 | |
Total | 20,608,000 | |
* The arrangements for payment are subject to the provisions of Sections 3.04 and 4.03 of the Loan Regulations.
SCHEDULE 3
Allocation and Withdrawal of Loan Proceeds
General
1. The table attached to this Schedule sets forth the Categories of items of expenditure to be financed out of the proceeds of the Loan and the allocation of the Loan proceeds to each such Category (“Table”). (Reference to “Category” in this Schedule is to a Category or Subcategory of the Table.)
Basis for Withdrawal from the Loan Account
2. Except as ADB may otherwise agree, the proceeds of the Loan shall be disbursed on the basis of the withdrawal percentage for each item of expenditure set forth in the Table.
Interest Charge
3. The amount allocated to Category 6 is for financing the interest charge on the Loan during the implementation period of the Project.
Reallocation
4. Notwithstanding the allocation of Loan proceeds and the withdrawal percentages set forth in the Table,
(a) if the amount of the Loan allocated to any Category appears to be insufficient to finance all agreed expenditures in that Category, ADB may, by notice to the Borrower, (i) reallocate to such Category, to the extent required to meet the estimated shortfall, amounts of the Loan which have been allocated to another Category but, in the opinion of ADB, are not needed to meet other expenditures, and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the withdrawal percentage applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made; and
(b) if the amount of the Loan allocated to any Category appears to exceed all agreed expenditures in that Category, ADB may, by notice to the Borrower, reallocate such excess amount to any other Category.
Disbursement Procedures
5. Except as ADB may otherwise agree, the Loan proceeds shall be disbursed in accordance with the Loan Disbursement Handbook.
Attachment to Schedule 3
TABLE
ALLOCATION AND WITHDRAWAL OF LOAN PROCEEDS (Climate Resilient Rice Commercialization Sector Development Project) | ||||
Number | Item | Total Amount Allocated for ADB Financing (SDR) Category Subcategory | Basis for Withdrawal from the Loan Account | |
1 | Works | 11,700,000 | ||
1A | Works - Irrigation | 6,402,000 | 67 % of total expenditure | |
1B | Works – Grain Handling | 4,667,000 | 90% of total expenditure | |
1C | Survey, Design and Supervision | 631,000 | 42.8% of total expenditure | |
2 | Associated Initiatives | 353,000 | 29.6% of total expenditure | |
3 | Vehicles and Office Equipment | 431,000 | ||
3A | Four-Wheel-Drive Vehicles | 156,000 | 65% of total expenditure | |
3B | Motorcycles | 148,000 | 80% of total expenditure | |
3C | Office Equipment | 127,000 | 59.1% of total expenditure | |
4 | Consulting Services | 2,491,000 | ||
4A | International Consultants | 1,749,000 | 55.3% of total expenditure | |
4B | National Consultants | 628,000 | 44.5% of total expenditure | |
4C | Consultant Support Costs | 114,000 | 56.0% of total expenditure | |
5 | Implementation and Supervision | 5,017,000 | ||
5A | Capacity Building | 222,000 | 100% of total expenditure* | |
5B | Incremental Staff | 3,242,000 | 90% of total expenditure | |
5C | Office Operation | 1,311,000 | 90% of total expenditure | |
5D | Vehicle and Equipment Operation and Maintenance | 242,000 | 90% of total expenditure | |
6 | Interest Charges | 616,000 | 100% of amounts due | |
Total | 20,608,000 | |||
* Exclusive of local taxes and duties imposed within the territory of the Borrower.
SCHEDULE 4
Procurement of Goods, Works and Consulting Services
General
1. The procurement of Goods, Works and Consulting Services shall be subject to and governed by the Procurement Guidelines, and the Consulting Guidelines, respectively.
2. All terms used in this Schedule and not otherwise defined in this Loan Agreement have the meanings provided in the Procurement Guidelines and/or the Consulting Guidelines, as applicable.
Goods and Works
3. Except as ADB may otherwise agree, Goods and Works shall only be procured on the basis of the methods of procurement set forth below:
(a) International Competitive Bidding;
(b) National Competitive Bidding; and
(c) Shopping.
4. The methods of procurement are subject to, among other things, the detailed arrangements and threshold values set forth in the Procurement Plan. The Borrower may only modify the methods of procurement or threshold values with the prior agreement of ADB, and modifications must be set out in updates to the Procurement Plan.
National Competitive Bidding
5. The Borrower and ADB shall ensure that, prior to the commencement of any procurement activity under national competitive bidding, the Borrower’s national competitive bidding procedures are consistent with the Procurement Guidelines. Any modifications or clarifications to such procedures agreed between the Borrower and ADB shall be set out in the Procurement Plan. Any subsequent change to the agreed modifications and clarifications shall become effective only after approval of such change by the Borrower and ADB.
Conditions for Award of Contract
6. The Borrower shall not award any Works contract for a Subproject which involves environmental impacts until the PIO has:
(a) obtained the final approval of the IEE from the Provincial Department of Environment;
(b) obtained the endorsement of the IEE from MEF and ADB; and
(c) incorporated the relevant provisions from the EMP into the Works contract.
Schedule 4
7. The Borrower shall not award any Works contract involving involuntary resettlement impacts for a Subproject until the Borrower has prepared and submitted to ADB the final RP for such Subproject based on the Subproject's detailed design, and obtained ADB's clearance of such RP.
Consulting Services
8. Except as ADB may otherwise agree, and except as set forth in the paragraph below, the Borrower shall apply quality- and cost-based selection for selecting and engaging Consulting Services.
9. The Borrower shall apply the following methods for selecting and engaging the specified Consulting Services, in accordance with, among other things, the procedures set forth in the Procurement Plan:
(a) Quality and Cost-based Selection, Consultants’ Qualifications Selection and Quality-Based Selection for feasibility studies, design, monitoring and evaluation, gender mainstreaming, capacity building of millers and supervisions of Works; and
(b) Quality-based Selection for the development and piloting weather index based crop insurance.
Industrial or Intellectual Property Rights
10. (a) The Borrower shall ensure that all Goods and Works procured (including without limitation to all computer hardware, software and systems, whether separately procured or incorporated within other goods and services procured) do not violate or infringe any industrial property or intellectual property right or claim of any third party.
(b) The Borrower shall ensure that all contracts for the procurement of Goods and Works contain appropriate representations, warranties and, if appropriate, indemnities from the contractor or supplier with respect to the matters referred to in subparagraph (a) of this paragraph.
11. The Borrower shall ensure that all ADB-financed contracts with consultants contain appropriate representations, warranties and, if appropriate, indemnities from the consultants to ensure that the Consulting Services provided do not violate or infringe any industrial property or intellectual property right or claim of any third party.
ADB’s Review of Procurement Decisions
12. Contracts procured under international competitive bidding procedures and contracts for Consulting Services shall be subject to prior review by ADB, unless otherwise agreed between the Borrower and ADB and set forth in the Procurement Plan.
SCHEDULE 5
Execution of Project; Financial Matters
Implementation Arrangements
1. The Borrower and MEF shall ensure that the Project is implemented in accordance with the detailed arrangements set forth in the XXX. Any subsequent change to the XXX shall become effective only after approval of such change by the Borrower and ADB. In the event of any discrepancy between the XXX and this Loan Agreement, the provisions of this Loan Agreement shall prevail.
Environment and Climate Change
2. The Borrower shall ensure that the preparation, design, construction, implementation and operation of the Project, each Subproject and all Project facilities comply with (a) all applicable laws and regulations of the Borrower relating to environment, health and safety; (b) the Environmental Safeguards; and (c) all measures and requirements set forth in the IEE, the EMP, and any corrective or preventative actions set forth in a Safeguards Monitoring Report.
3. The Borrower shall ensure that climate change considerations are incorporated in the design and implementation of the Subprojects.
4. The Borrower shall ensure that no subproject which meets ADB’s category A environmental criteria set out in the Safeguard Policy Statement is included in the List of Candidate Subprojects, and that no subproject with category A environmental criteria is financed under the Project.
Land Acquisition and Involuntary Resettlement
5. The Borrower shall ensure that all land and all rights-of-way required for the Project, each Subproject and all Project facilities are made available to the Works contractor in accordance with the schedule agreed under the related Works contract and all land acquisition and resettlement activities are implemented in compliance with (a) all applicable laws and regulations of the Borrower relating to land acquisition and involuntary resettlement;
(b) the Involuntary Resettlement Safeguards; (c) the RF; and (d) all measures and requirements set forth in the respective RP, and any corrective or preventative actions set forth in a Safeguards Monitoring Report.
6. Without limiting the application of the Involuntary Resettlement Safeguards or the RP, the Borrower shall ensure that no physical or economic displacement takes place in connection with the Project until:
(a) compensation and other entitlements have been provided to affected people in accordance with the RP;
(b) a comprehensive income and livelihood restoration program has been established in accordance with the RP; and
Schedule 5
(c) all land and all rights-of-way required for a Subproject is free of all encumbrances.
7. The Borrower shall ensure that no subproject which meets ADB’s category A resettlement criteria set out in the Safeguard Policy Statement is included in the List of Candidate Subprojects, and that no subproject with category A resettlement criteria is financed under the Project.
Indigenous Peoples
8. The Borrower shall ensure that the Project does not have any indigenous peoples impact, all within the meaning of the Safeguard Policy Statement. In the event that the Project does have any such impact, the Borrower shall take all steps required to ensure that the Project complies with the applicable laws and regulations of the Borrower and with the Safeguard Policy Statement.
Human and Financial Resources to Implement Safeguards Requirements
9. The Borrower shall make available necessary budgetary and human resources to fully implement each EMP and RP.
Safeguards–Related Provisions in Bidding Documents and Works Contracts
10. The Borrower shall ensure that all bidding documents and contracts for Works contain provisions that require contractors to:
(a) comply with the measures relevant to the contractor set forth in each IEE, EMP and RP, and any corrective or preventative actions set forth in a Safeguards Monitoring Report;
(b) make available a budget for all such environmental and social measures;
(c) provide the Borrower with a written notice of any unanticipated environmental or resettlement risks or impacts that arise during construction, implementation or operation of the Project that were not considered in each IEE, EMP and RP;
(d) adequately record the condition of roads, agricultural land and other infrastructure prior to starting to transport materials and construction; and
(e) fully reinstate pathways, other local infrastructure, and agricultural land to at least their pre-project condition upon the completion of construction.
Safeguards Monitoring and Reporting
11. The Borrower shall do the following:
(a) submit semi-annual Safeguards Monitoring Reports to ADB and disclose relevant information from such reports to affected persons promptly upon submission;
(b) if any unanticipated environmental and/or social risks and impacts arise during construction, implementation or operation of the Project that were not considered in each IEE, EMP and RP, promptly inform ADB of the occurrence of such risks or impacts, with detailed description of the event and proposed corrective action plan; and
(c) report any actual or potential breach of compliance with the measures and requirements set forth in an EMP or RP promptly after becoming aware of the breach.
Prohibited List of Investments
12. The Borrower shall ensure that no proceeds of the Loan are used to finance any activity included in the list of prohibited investment activities provided in Appendix 5 of the Safeguard Policy Statement.
Gender and Development
13. The Borrower shall ensure that the GAP is fully implemented and that all Project related activities are designed and implemented in accordance with ADB’s Policy on Gender and Development (1998). In particular, the Borrower shall ensure: (a) 50% female membership in community construction sub-committees; (b) 40% female employment as unskilled laborers in Works; (c) 30% female in management positions in xxxxxx cooperatives and xxxxxx water user’s committees; (d) 50% female farmers in pilot on farm trials and demonstrations and pilot crop insurance schemes; and (e) 50% female trainees in all Project training.
Subproject Eligibility and Priority
14. The Borrower shall ensure that candidate subprojects in each Project Province are considered and feasibility studies and detailed design of such candidate subprojects are carried out in the order of priority indicated in the List of Candidate Subprojects.
Feasibility Study Review
15. After completion of the requisite feasibility studies, the Borrower shall cause the PMO to ascertain whether the candidate subprojects meet the following criteria to be eligible for financing under the Project:
(a) a subproject should be technically feasible and economically viable. If the estimated economic rate of return is below 12%, other significant benefits shall be quantified to demonstrate economic viability of such subproject;
(b) procurement package(s), method(s) of procurement and cost estimates shall have been prepared;
(c) a detailed financing plan for operation and maintenance of the subproject shall have been prepared: (i) identifying the entity which shall be responsible for the operation and maintenance of the subproject; and (ii) confirming the Project Province’s commitment though budgetary allocation to provide requisite funds needed for the operation and maintenance of the subproject;
(d) public hearings on a subproject proposal shall have been held in concerned communes and villages, and beneficiary representatives shall have been included in the subproject implementation sub- committee to ensure continued public consultation and supervision;
(e) the subproject must be shown to have no significant negative environmental or social impacts, and mitigation measures shall have been identified for minor impacts;
(f) the subproject must be shown to have no significant resettlement impacts, and if such subproject is categorized as Category B, a RP has been prepared in accordance with the RF, the Borrower’s laws and regulations and the Safeguard Policy Statement; and
(g) the subproject must be shown to have no outstanding social safeguards issues resulting from existing facilities. In case there are any such outstanding issues, the Borrower shall ensure that the PIO concerned shall have prepared a corrective action plan in accordance with the Safeguard Policy Statement to address the same.
16. In case that a candidate subproject does not meet the criteria provided in paragraph 15 above, it shall be replaced by the next priority candidate subproject for the respective Project Province under the List of Candidate Subprojects. If a candidate subproject not listed in the List of Candidate Subprojects is to be considered, such subproject shall be examined and screened by MEF with the support from an independent consultant acceptable to ADB and the Borrower and submitted to ADB for approval.
Community Awareness and Beneficiary Participation
17. The Borrower shall ensure that Project Provinces promote active community awareness and stakeholder participation in the design, implementation and performance monitoring of the Subprojects, though (a) disseminating information regarding the nature of the Subprojects in open public forums, and (b) establishing a mechanism for public consultation.
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Schedule 5
Monitoring of Project Benefits
18. Within 12 months of the Effective Date, the Borrower shall cause MEF to engage a suitably qualified and experienced social science institute, university, consulting firm or a non-governmental organization, acceptable to ADB, to monitor Project benefits and submit annual benefit monitoring reports to the Borrower and ADB.
Governance and Anticorruption
19. The Borrower shall and shall cause MEF, MAFF, MOWRAM, MLMUPC and the Project Provinces to (a) comply with ADB’s Anticorruption Policy (1998, as amended to date) and acknowledge that ADB reserves the right to investigate directly, or through its agents, any alleged corrupt, fraudulent, collusive or coercive practice relating to the Project; and (b) cooperate with any such investigation and extend all necessary assistance, including access to all relevant books and records, as may be necessary for the satisfactory completion of any such investigation.
20. The Borrower shall and shall cause MEF, MAFF, MOWRAM, MLMUPC and the Project Provinces to ensure that the anticorruption provisions acceptable to ADB are included in all bidding documents and contracts, including provisions specifying the right of ADB to audit and examine the records and accounts of MEF, MAFF, MOWRAM, MLMUPC, Project Provinces and all contractors, suppliers, consultants, and other service providers as they relate to the Project.