INTERNATIONAL DEVELOPMENT ASSOCIATION (RATIFICATION) ACT No. OF 1983 - Parliament of Vanuatu

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INTERNATIONAL DEVELOPMENT ASSOCIATION (RATIFICATION) ACT No. OF 1983 - Parliament of Vanuatu
REPUBLIC OF VANUATU

                                    BILL FOR
 >HE LOAN AGREEMENTS (AGRICULTURAL EXTENSION AND TRAINING PROJECT) BETWEEN THE REPUBLIC
OF VANUATU AND THE ASIAN.DEVELOPMENT BANK AND BETWEEN THE REPUBLIC OF VANUATU AND THE
INTERNATIONAL DEVELOPMENT ASSOCIATION (RATIFICATION) ACT No.          OF 1983.

                     AUTHENTICATION BY CLERK

                                         Signed: .. -..............      .
                                                       CLERK TO PARLIAMENT
                                                 5 September 1983
INTERNATIONAL DEVELOPMENT ASSOCIATION (RATIFICATION) ACT No. OF 1983 - Parliament of Vanuatu
REPUBLIC OF VANUATU

 THE LOAN AGREEMENTS (AGRICULTURAL EXTENSION AND TRAINING
     PROJECT) BETWEEN THE REPUBLIC OF VANUATU AND THE
ASIAN DEVELOPMENT BANK AND BETWEEN THE REPUBLIC OF VANUATU
       AND THE INTERNATIONAL DEVELOPMENT ASSOCIATION
              (RATIFICATION > ACT NO . 3 4 OP ' 19 83

                 Arrangement of Sections

         1.   Ratification.

         2.   Commencement.

              SCHEDULE   1

              SCHEDULE   2
INTERNATIONAL DEVELOPMENT ASSOCIATION (RATIFICATION) ACT No. OF 1983 - Parliament of Vanuatu
REPUBLIC OF VANUATU

            THE LOAN AGREEMENTS (AGRICULTURAL EXTENSION AND TRAINING
                PROJECT) BETWEEN THE REPUBLIC OF VANUATU AND THE
           ASIAN DEVELOPMENT BANK AND BETWEEN THE REPUBLIC OF VANUATU
                  AND THE INTERNATIONAL DEVELOPMENT ASSOCIATION
                         (RATIFICATION) ACT NO.34 OF 1983

To ratify the loan agreement made between the Republic of Vanuatu and the Asian
Development Bank signed on the Sth day of August 1983 and the loan Agreement
made between the Republic of Vanuatu and the International Development
Association signed on the Sth day of August 1983.

BE IT ENACTED by the President and the Parliament as follows:

RATIFICATION
1.   (1) The loan agreement made between the Republic of Vanuatu and the Asian
          Development Bank signed on the 5th day of August 1983 set out in
          Schedule 1 hereto is hereby approved and ratified.

     (2)   The loan agreement made between the Republic of Vanuatu and the
           International Development Association signed on the 5th day of
           August 1983 set out in Schedule 2 hereto is hereby approved and
           ratified.

     (3)   The agreements shall be binding on Vanuatu in accordance with their
           terms.

COMMENCEMENT
2*        This Act   shall   come   into   force   on   the   day of publication   in the
          Gazette.
INTERNATIONAL DEVELOPMENT ASSOCIATION (RATIFICATION) ACT No. OF 1983 - Parliament of Vanuatu
SCHEDULE 1

                                        LOAN AGREEMENT

                                   (Special Operations)

LOAN AGREEMENT dated 5 August 1983 between REPUBLIC OF VANUATU (hereinafter
called the Borrower) and ASIAN DEVELOPMENT BANK (hereinafter called the Bank).

WHEREAS
          (A)   the Borrower has applied to the Bank for a loan for the purposes
                of the Project described in Schedule 1 to thi6 Loan Agreement;

          (B)   the Borrower has also applied to the International Development
                Association       (hereinafter     called    IDA)   for    a     credit    for    the
                purposes     of   the   Project    (hereinafter called the          IDA Credit);
                and

          (C)   the Bank has agreed, on its part, to make a loan to the Borrower
                from   the    Bank's     Special   Funds    resources     upon    the     terms   and
                conditions hereinafter set forth;

          NOV THEREFORE the parties hereto agree as follows:

                                                                                              .../2
INTERNATIONAL DEVELOPMENT ASSOCIATION (RATIFICATION) ACT No. OF 1983 - Parliament of Vanuatu
- 2 -

                                          ARTICLE       I

                              Loan Regulations;         Definitions

Section 1.01.     All the provisions of the Special Operations Loan Regulations of
the Bank,    dated   1   December     1982,   are    hereby    made    applicable     to   this Loan
Agreement with the same force and effect as if they were fully set forth herein
(said   Special   Operations Loan Regulations being hereinafter called the Loan
Regulations).

Section   1.02.      Wherever   used     in   this    Loan Agreement,        unless    the   context
otherwise requires,      the several terms defined in the Loan Regulations have the
respective meanings therein set forth, and the following additional terms have
the following meanings:

            (a)   "MLNR"     means the Ministry of Land and Natural Resources of the
                  Borrower;

            (b)   "DALF"      means    the    Department       of   Agriculture,    Livestock and
                  Forestry within MLNR;

            (c)   "Project Executing Agency" for the purposes of, and within the
                  meaning of the Loan Regulations means DALF, which is responsible
                  for the carrying out of the Project;                and

            (d)   "Project    facilities"       means       the facilities   to be provided or
                  constructed under the Project.

                                                                                              .../3.
INTERNATIONAL DEVELOPMENT ASSOCIATION (RATIFICATION) ACT No. OF 1983 - Parliament of Vanuatu
3

                                           ARTICLE       II
                                             The Loan

Section 2.01.       The Bank agrees to lend to the Borrower from the Bank’s Special
Funds   resources    an    amount   in   various       currencies   equivalent   to   one    million
twenty-nine thousand and six hundred Special Drawing Rights (SDR 1,029,600).

Section 2.02.       The Borrower shall pay to the Bank a service charge at the rate
of   one per cent     (17») per annum on the amount of the Loan withdrawn from the
Loan Account and outstanding from time to time.

Section   2.03.      For   any special commitment entered             into by the Bank at         the
request of the Borrower pursuant to Section 5.02 of the Loan Regulations, the
Borrower shall pay to the Bank a fee at the rate of one-half of one per cent
(0.5%) per annum on the principal amount of such special commitment outstanding
from time to time.

Section 2.04.       The    service charge and any other charge on the Loan shall be
payable semi-annually on 15 March and 15 September in each year.

Section   2.05.      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.

                                                                                              * •. / 4.
INTERNATIONAL DEVELOPMENT ASSOCIATION (RATIFICATION) ACT No. OF 1983 - Parliament of Vanuatu
- 4 -

                                           article    iti

                                   Use of Proceeds of the Load

Section 3.01.     The Borrower shall cause the proceeds of the Loan to be applied
to   the   financing     of    expenditure    on     the    Project   in   accordance     with      the
provisions of this Loan Agreement.

Section 3.02.      The goods and services and other               items of expenditure           to be
financed out of the proceeds of the Loan and the allocation of amounts of the
Loan among different categories of such goods and services and other items of
expenditure   shall    be     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 the Bank.

Section 3.03.     Except as the Borrower and the Bank shall otherwise agree, all
goods and services       to be      financed out of the proceeds of              the Loan shall be
procured in accordance with the provisions of Schedule 4 and Schedule 5 to this
Loan Agreement.

Section 3.04.     Except as the Borrower and the Bank shall otherwise agree, the
Borrower shall cause all goods and services 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 shall be made only on account
of expenditures relating to goods and services which:

            (a)   are produced in, or are supplied from, such member countries of
                  the Bank as shall have been specified by the Bank from time to
                  time as eligible sources for procurement, and

            (b)   meet      such   other   eligibility      requirements    as    shall   have     been
                  specified by the Bank from time co time.

Section 3.06.     The closing date for withdrawals from the Loan Account for the
purposes of Section 8.03 of the Loan Regulations shall be 30 June 1989 or such
other date as may from time            to time be agreed between the Borrower and the
Bank,

                                                                                                 .. ./5.
INTERNATIONAL DEVELOPMENT ASSOCIATION (RATIFICATION) ACT No. OF 1983 - Parliament of Vanuatu
- 5 -

                                               ARTICLE       IV

                                          Particular Covenants

Section 4.01.
            (a)    The Borrower shall cause the Project to be carried out with due
                    diligence     and efficiency and in conformity with sound adminis­
                    trative, financial, engineering and agricultural practices.

            (b)     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 6 to this Loan
                    Agreement.

Section    4,02.      The    Borrower      shall      make   available,      promptly as needed,               the
funds,    land,    facilities,     services and other resources which are required, in
addition to the proceeds of the Loan,                     for the carrying out of the Project and
for the operation and maintenance of the Project facilities.

Section 4.03.
            (a)    In the carrying out               of   the Project,     the Borrower         shall    cause
                    competent     and qualified           consultants and contractors acceptable
                    to the Borrower and the Bank., to be employed to an extent and
                    upon terms and conditions satisfactory to the Borrower and the
                    Bank.

            (b)    The      Borrower      shall      cause   the   Project    to    be    carried       out     in
                    accordance      with      plans,      design   standards,      specifications,            work
                    schedules      and construction methods acceptable                    to    the Borrower
                    and     the   Bank,        The     Borrower    shall     furnish     or     cause    to     be
                    furnished      to   the Bank,         promptly after     their preparation, such
                    plans, design standards, specifications and work schedules, and
                    any material modifications               subsequently made           therein,       in such
                    detail as the Bank shall reasonably request.

Section 4.04.       The Borrower shall ensure that the activities of its departments
and agencies with respect to the carrying out of the Project and operation of
the Project facilities are conducted and coordinated in accordance with sound
administrative policies and procedures.
6

Section 4.05,
          (a)    The Borrower shall make arrangements                       satisfactory to             the Bank
                 for    insurance         of     the   Project     facilities         to   such    extent      and
                 against        such risks and in such amounts as shall be consistent
                 with sound practice.

          (b)    Without        limiting the generality of the foregoing, the Borrower
                 undertakes          to   insure,      or cause to be insured,              the goods to be
                 imported for the Project and to be financed out of the proceeds
                 of     the     Loan      against      hazards      incident      to       the    acquisition,
                 transportation            and    delivery       thereof    to    the      place   of    use    or
                 installation,            and    for   such     insurance       any    indemnity       shall    be
                 payable        in a currency freely usable to replace or repair such
                 goods.

Section 4.06.
          (a)    The Borrower shall maintain, or cause to he maintained, records
                 and      accounts        adequate         to   identify    the       goods      and    services
                  financed out of              the proceeds of the Loan,              to disclose the use
                  thereof       in   the Project,          to record the progress of the Project
                  (including the cost thereof) and to reflect, in accordance with
                 consistently maintained sound accounting practices, the opera­
                  tions    and financial condition of the agencies of the Borrower
                  responsible for the carrying out of the Project and operation of
                  the Project facilities, or any part thereof.

          (b)    The Borrower shall

                  (i)     maintain, or cause to he maintained, separate accounts for
                          the Project;

                 (ii)     have such accounts and related financial statements audited
                          annually,       in accordance with sound auditing principles, by
                          auditors acceptable to the Bank;

                (iii)     furnish to the Bank, as soon as available but in any event
                          not    later than six months after the end of each related
                          fiscal       year,     certified      copies     of    such      audited financial
                          statements and the report of the auditors relating thereto,
                          all in the English language;                and
7

                (iv)    furnish to the Bank such other information concerning such
                          accounts and financial statements and the audit thereof as
                          the Bank shall from time to time reasonably request.

Section 4.07.
          (a)    The Borrower shall               furnish,       or cause to be         furnished,     to   the
                 Bank      all     such     reports        and    information      as     the   Bank    shall
                  reasonably request concerning                              *

                  (i) the Loan, and the expenditure of the proceeds and mainte­
                          nance of the service thereof;

                 (ii)     the    goods      and    services       and    other    items    of   expenditure
                          financed out of the proceeds of the Loan;

                (iii)   the Project;

                 (iv) the administration,                 operations and financial condition of
                          the agencies of the Borrower responsible for the carrying
                          out of the Project and operation of the Project facilities,
                          or any part thereof;

                  (v)     financial and economic conditions in the territory of the
                          Borrower and the international balance-of-payments position
                          of the Borrower;           and

                 (vi) any other matters relating to the purposes of the Loan.

          (b)     Without        limiting    the generality of the foregoing, the Borrower
                  shall    furnish or cause to be                  furnished to     the Bank quarterly
                  reports on the carrying out of the Project and on the operation
                  and management of the Project facilities.                       Such reports shall be
                  submitted        in    such     form and in such detail               and within such a
                  period as the Bank shall reasonably request, and shall indicate,
                  among     other       things,      progress       made    and   problems      encountered
                  during the quarter under review,                      steps taken or proposed to be
                  taken     to      remedy        these     problems,      and    proposed      program      of
                  activities and expected progress during the following quarter.

                                                                                                       * *./&.
- 8 -

             (c)    Promptly after completion of the Project, but in any event not
                    later than six (6) months after the closing date for withdrawals
                    from the Loan Account or such later date as may be agreed for
                    this        purpose        between the Borrower and                   the Bank,   the Borrower
                    shall prepare and furnish to the Bank a report, in such form and
                    in     such        detail    as     the    Bank 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 of               its obligations             under      the Loan Agreement, and
                     the accomplishment of the purposes of the Loan.

Section 4.08.        The Borrower shall enable the Bank's representatives to inspect
the   Project,      the    goods           financed     out    of     the    proceeds      of   the Loan,   and any
relevant records and documents.

Section     4.09.         The    Borrower        shall        ensure    that       the    Project   facilities      are
operated,     maintained             and     repaired    in     accordance         with    sound    administrative,
financial, engineering, and maintenance and operational practices.

Section 4.10.
             (a)     It is the mutual intention of the Borrower and the Bank that no
                     other external debt owed a creditor other than the Bank shall
                    have any priority over the Loan by way of a lien on the assets
                    of the Borrower.                 To that end, the Borrower undertakes

                     (i)        that, except as the Bank shall otherwise agree, if any lien
                                shall be created on any assets of the Borrower as security
                                for any external              debt,    such    lien will ipso facto equally
                                and    ratably        secure    the payment of             the principal of,         and
                                service charge and any other charge on, the Loan;                           and

                    (ii)        that       the Borrower,        in creating or permitting the creation
                                of     any    such     lien,     will       make    express     provision   to     that
                                effect.

             (b)     The provisions of paragraph (a) of this Section shall not apply
                     to

                                                                                                                 . . ./9.
9

       (i)   any   lien   created       on       property,   at   the    time    of    purchase
             thereof,     solely   as       security    for payment of           the purchase
             price of such property;               or

      (ii)   any   lien    arising          in    the   ordinary        course    of    banking
             transactions and securing a debt maturing not more than one
             year after its date,

(c)   The term ’’assets of         the Borrower” as used in paragraph (a) of
       this Section includes assets of the Borrower and assets of any
       entity owned or controlled by, or operating for the account or
       benefit of the Borrower,              including the Central Bank of Vanuatu
       and any other      institution owned or controlled by the Borrower
      which performs the functions of a central bank for the Borrower.

                                                                                        .../10.
10 -

                                        ARTICLE    V

                  Suspension;   Cancellation;     Acceleration of Maturity

Section 5.01.      The following is specified as an additional event for suspension
of the right of the Borrower to make withdrawals from the Loan Account for the
purposes of Section 8.02(1) of the Loan Regulations:          The IDA Credit shall have
become   liable    for suspension or cancellation or shall        have become repayable
prior to its agreed maturity date.

Section 5.02.       The following is specified as an additional event for acceler­
ation of maturity for the purposes of Secton 8.07(d) of the Loan Regulations:
The event specified in Section 5.01 of this Loan Agreement shall have occurred.

                                                                                .. ./11.
11 -

                                      ARTICLE     VI

                                      Effectiveness

Section 6.01.    The following   is    specified as an additional condition to the
effectiveness of this Loan Agreement for the purposes of Section 9.01(f) of the
Loan Regulations:    The Borrower shall have obtained the IDA Credit or shall
have made other arrangements, satisfactory to the Bank, to commit the provision
of the foreign currency funds intended to be provided by the IDA Credit.

Section 6.02.   A date ninety (90) days after the date of this Loan Agreement is
specified for the effectiveness of the Loan for the purposes of Section 9.04 of
the Loan Regulations.

                                                                           .../12.
- 12

                                         ARTICLE     VII

                                         Miscellaneous

Section 7.01.     The Minister of Finance, Commerce, Industry and Tourism 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

           Minister of Finance, Commerce, Industry and Tourism,
           P.O. Box 31,
           Port Vila,
           Republic of Vanuatu

           Telex Number:         1049 VATUBK NH

     For the Bank

           Asian Development Bank,
           P.O. Dox 769,
           Man i1a ,
           Philippines

           Cable Address:         ASIANBANK     MANILA

           Telex Numbers:

                  23103 ADB PH (RCA)
                  40571 ADB PM (ITT)
                  63587 ADB PN (ETPI)

                                                                                   .../13.
13 -

IN WITNESS WHEREOF the parties hereto,         acting through their representatives
thereunto   duly   authorized,   have cause    this Loan Agreement   to be signed    in
their   respective names and to be delivered at         the principal office of     the
Bank, as of the day and year first above written.

                                          REPUBLIC OF VANUATU

                                          By     HOON-MOK CHUNG
                                                 Authorised Representative

                                          ASIAN DEVELOPMENT BANK

                                          By     MASAO FUJIOKA
                                                 President

                                                                              ,../14.
14

                                                  SCHEDULE           1

                                       Description of the Project

The    objective        of    the    Project     is    the        improvement    of   essential    smallholder
support services in Vanuatu.                  The Project will encourage more efficient utili­
zation of resources, increase smallholders' cash income, enlarge the Borrow­
er's    revenue        base   and provide training facilities.                     The Project consists of
the following:

1.    Experimental Plots and Demonstration Farms

       Establishment          and    maintenance           of     experimental    plots     and   demonstration
       farms    with     support      services        at     8    agricultural    centers     of DALF in     the
       Project area.

2.     Training and Fellowships

       (a)     Provision of          in-servicc training facilities for the extension divi­
               sion,    and overseas fellowships and study tours for extension staff,
               Agricultural teachers, agricultural information officers and veteri­
               nary laboratory technicians;

       (b)     Revision of post secondary education course held at the Tagabe Agric­
               ultural School;          and

       (c)     Provision of facilities                for        farmers'    training at    the demonstration
               farms.

3.     Extension Service

       Provision of houses, offices/stores, vehicles, dinghys and radio-telephone
       equipment for upgrading the extension service of DALF.

4•     Agricultural Information Service

       Provision        of    equipment,       information          material,     incremental     salaries and
       material        cost    for    improving        the        existing    information    services   in   the
       Agricultural Information Office of DALF.

                                                                                                        . ../15.
- 15 -

                                                                                Schedule 1

5.   Livestock Service

     Establishment of a veterinary Laboratory through the provision of labora­
     tory building, equipment and chemical supplies.

6.   Project Office

     Provision of office furniture equipment and incremental salaries for the
     Project Office.

7.   Consulting Services

     Provision   of    consulting   services   for   agricultural   training,    extension
     services and information.

     The Project is expected to be completed by 31 December 1988,
16

                                            Schedule       2
                                     Amortization Schedule
                    (Agricultural Extension and Training Project)
Date Payment Due                                                   Payment of Principal
                                                                   (expressed in SDR) *

15 September 1993                                                             10,300
15 March     1994                                                             10,300
15 September 1994                                                             10,300
15 March     1995                                                             10,300
15 September 1995                                                             10,300
15 March     1996                                                             10,300
15 September 1996                                                             10,300
15 March     1997                                                             10,300
15 September 1997                                                             10,300
15 March     1998                                                             10,300
15 September 1998                                                             10,300
15 March     1999                                                             10,300
15 September 1999                                                             10,300
15 March     2000                                                             10,300
15 September 2000                                                             10,300
15 March     2001                                                             10,300
15 September 2001                                                             10,300
15 March     2002                                                             10,300
15 September 2002                                                             10,300
15 March     2003                                                             10,300
15 September 2003                                                             20,590
15 March     2004                                                             20,590
15 September 2004                                                             20,590
15 March     2005                                                             20,590
15 September 2005                                                             20,590
15 March     2006                                                             20,590
15 September 2006                                                             20,590
15 March     2007                                                             20,590
15 September 2007                                                             20,590

    The figures in this column represent SDR equivalents determined as of the
    respective     dates   of   withdrawal.          The       arrangements   for payment   of   each
    maturity are     subject    to    the   provisions of Sections 3.04 and 4.03 of the
    Loan Regulations.

                                                                                            . . ./17
17
                                                                                Schedule     2
Date Payment Due                                          Payment of Principal
                                                           (expressed in SDR) *
15 March     2008                                                     20,590
15 September 2008                                                     20,590
15 March     2009                                                     20,590
15 September 2009                                                     20,590
15 March     2010                                                     20,590
15 September 2010                                                     20,590
15 March     2011                                                     20,590
15 September 2011                                                     20,590
15 March     2012                                                     20,590
15 September 2012                                                     20,590
15 March     2013                                                     20,590
15 September 2013                                                     20,590
15 March     2014                                                     20s590
15 September 2014                                                     20,590
15 March     2015                                                     20,590
15 September 2015                                                     20,590
15 March     2016                                                     20,590
15 September 2016                                                     20,590
15 March     2017                                                     20,590
15 September 2017                                                     20,590
15 March     2018                                                     20,590
15 September 2018                                                     20,590
15 March     2019                                                     20,590
15 September 2019                                                     20,590
15 March     2020                                                     20,590
15 September 2020                                                     20,590
15 March     2021                                                     20,590
15 September 2021                                                     20,590
15 March     2022                                                     20,590
15 September 2022                                                     20,590
15 March     2023                                                     20,590
15 September 2023                                                     20,590

                                             Total SDR            1,029,600

    The figures in this column represent SDR equivalents determined as of the
    respective     elates      *
                            of withdrawal        The   arrangements   for   payment   of   each
    maturity are subject to the provision of Sections 3.04 and 4.03 of the Loan
    Regulations,
18

                                                  SCHEDULE          3
                        Allocation and Withdrawal of Loan Proceeds

1.   The table attached hereto sets forth the Categories of goods2 services and
     other    items    to     be   financed       out    of     the       proceeds       of    the    Loan   and    the
     allocation of amounts of the Loan to each Category.

2.   Except as. provided in this schedule or as>the Bank may otherwise agree, no
     withdrawals      from the Loan Account shall be made in respect of any local
     expenditures on the Project.

3.   The amounts allocated to each of the Categories                                    I to VII represent the
      portion of the presently estimated foreign currency expenditures for each
      such Category which is to he financed under the Loan.                                   For the     purpose of
     withdrawals       from    the        Loan   Account       in       respect    of    such    Categories,         the
      following percentages shall apply:

      (i)    Category I               :     1007, of foreign expenditure
     (ii)    Categories II-VII;            15% of total expenditure.

4.   The items in Categories III, IV and V will be procured under international
      shopping procedures pursuant to the relevant provisions of Schedule 4 to
      this   Loan Agreement,               Any   contract       for such items awarded to a                        local
      supplier after effective international shopping shall be financed on the
      following basis:

      (a)    where    the     goods       procured      from    a       local     supplier      are     manufactured
             locally, 100 per cent of the ex-factory price of the goods supplied
             (exclusive of any duties and taxes);                         and

      (b)    where    the goods procured from a                     local       supplier have been entirely
             imported, the foreign currency component of the contract price.

                                                                                                             ..,/19.
- 19 -

                                                                                                            Schedule 3

5.   The   amount         of    SDR 280,807 allocated                      to Category VIII       is   for financing
     local    expenditures             for        the Category.             Such amount may be withdrawn from
     the     Loan    Account           in        foreign     currency        on    the   basis    of    157« of     total
     expenditures          for    Categories            II,      III,      IV and V,     subject to       the maxifnum
     amount of SDR 280,807.

6,   Notwithstanding             the    allocation of                the    loan proceeds and          the withdrawal
     percentages set forth above:

     (a)     if     the    amount       of the Loan              then allocated to any Category (except
             Category          VIII)        appears        to   be     insufficient       to    finance     all    agreed
             expenditures in that Category, the Bank may, by notice to the Borrow­
             er,

             (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 (except Category VIII) but, in the
                     opinion of the Bank, 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 conti­
                     nue until all expenditures thereunder shall have been made;

     (b)     if     the    amount       of        the Loan       then allocated          to any Category          (except
             Category          VIII)        appears     to      exceed       all   agreed      expenditures       in that
             Category,         the Bank may,               by notice to the Borrower, reallocate such
             excess        amount           to    any      other      Category      (except      Category     VIII)     as
             required.
- 20 -

                                                           Attachment to Schedule 3

                          \ ALLOCATION OF PROCEEDS OF LOAN

                    (Agricultural Extension and Training Project)

                                                    Amount Allocated
                                                    (SDR Equivalent)

   I.   Consulting Services                         SDR        257,406
  II.   Civil Works                                             114,195
 III.   Machinery & Equipment                                   42,121
  IV.   Veh icles                                               33,697
   V.   Agricultural Inputs                                       3,744
  VI.   Training                                                 66,458
 VII.   Incremental Operating Costs                              48,673
VIII.   Local expenditures                                      280,807

        (a)   Civil Works       SDR229,326
        (b)   Machinery and         26,209
              Equipment
        (c)   Vehicles              14,040
        (d)   Agricultural          11,232
              Inputs
  IX.   Unallocated                                             182,499

                                                          SDR 1,029,600

                                                                               /21
- 21

                                              SCHEDULE 4

                                              Procurement

1.   Except as the Bank may otherwise agree, the procedures referred to in the
      following paragraphs of         this Schedule shall apply in the procurement of
     goods and services to he financed out of the proceeds of the Loan.                        The
      term ’’services" in this Schedule does not include consultant                     services.

2.    Procurement      of goods and services shall he subject to the provisions of
      the   following documents,       as amended       from time    to time,     which have been
      furnished to the Borrower:

      (i)     "Guidelines for Procurement under Asian Development Bank Loans" dated
              May 1981;     and

     (ii)     "Eligibility Requirements under Special Funds Loans" dated June 1982.

3.   Except for certain minor items (where the contract value is less than the
     equivalent of $10,000) which may be procured locally, each supply contract
      for equipment or materials shall be awarded on the basis of international
      shopping as described in Chapter III of the Guidelines for Procurement.

4.    Civil    works      contracts   shall     be   awarded   on   the   basis   of   competitive
     bidding among         local contractors in accordance with procedures acceptable
      to the Bank.         Selection and engagement of contractors shall be subject to
      the approval of the Bank.         After award, three copies of each such contract
      shall    be furnished to the Bank.             In cases where an award cannot be made
      because    of    lack of    competition,       civil works may be carried out        by the
      Department of Public Works on a force account basis.

                                                                                           .../22.
~ 22 -

                                                SCHEDULE        5

                                                Consultants

1.   The services of individual consultants shall he utilized in the carrying
     out of the Project, particularly with regard to:

      (a)   agricultural training;
      (b)   agricultural extension;              and
      (c)   agricultural information.

The detailed terms of reference of the consultants shall be as determined by
agreement between the Bank and DALF.

2.   The    selection,           engagement     and     services      of   the    consultants     shall     be
      subject      to    the     provisions     of    this   Schedule      and    the provisions of the
      following         documents,     as     amended    from       time   to    time,   which   have     been
      furnished to DALF:

      (i)    "Guidelines on the Use of Consultants by Asian Development Bank and
             Its Borrowers" dated April 1979;                 and

     (ii)   "Eligibility Requirements under Special Funds Loans" dated June 1982.

3.   The consultants shall be selected and engaged by DALF in accordance with
      the following procedures:

      (a)   Before selection of consultants is made, the following items shall be
             furnished to the Bank for its prior approval:

             (i)    a     list    of   the    candidates,     including their qualifications and
                    experience;

            (ii)    an evaluation of the candidates,                   ranked in order of preference,
                    together with a brief justification for the selection intended
                    to be made;         and

                                                                                                    .../23.
- 23

                                                                        Schedule 5

  (iii) a draft contract with consultant.

(b)   Promptly after    the contract     is    signed, the Bank shall be furnished
      with three copies of the signed contract.

(c)   If   any substantial   amendment    of    the contract is proposed after its
      execution,   the proposed changes        shall be submitted to the Bank for
      prior approval.
- 24 -

                                                  SCHEDULE        6

                                Execution of Project and Operation of
                                            Project Facilities

I.    Imp1ementation and Coordination

Project Implementation

1.    DALF shall       implement         the Project under the over-all supervision of MLNR
      and in coordination with the Ministry of Finance, Commerce, Industry and
      Tourism (MFCIT) and the national Planning and Statistics Office                                  (NPSO).
      For    this    purpose,       the    Borrower       shall       cause a suitably staffed Project
      Office to be established within DALF before 31 December 1983.

2.    The    Director        of    DALF    shall     be     the       Project    Director     and    shall    be
       responsible        for     the   overall    implementation          of    the Project,        A Project
      Manager       shall    be appointed         by the Project Director in consultation with
       the   Bank    to     undertake      the    day-to-day          management   of    the Project.        The
      Project Manager shall be advised and trained on the job by the Management
       Information Adviser tn be provided under a technical assistance granted by
      the Bank.        The Project Manager shall report to and work under the general
      control and guidance of the Project Director.                         He shall be        assisted by a
       full time accountant and secretarial staff of DALF as                             required.

3.    The responsibilities of the Project Office shall include:

       (i)   all procurement arrangements;
      (ii)   the engagement of consultants;
     (iii)   the arrangements for overseas fellowships;
      (iv)   maintenance of separate hooks of accounts for the Project;
       (v)   monitoring Project implementation and benefits;                            and
      (vi)   preparation of             quarterly Project reports               in a format acceptable to
             the Bank.

                                                                                                       . . ,/25.
25 -

                                                                                                       Schedule 6

Project Coordination

4t    The Borrower shall set up a Project Coordinating Committee (PCC) before 31
      December       1983        to    carry     out     coordination       of        Project    implementation
      activities.          PCC shall be chaired by the First Secretary of the MLNR and
       shall include the First Secretary of the MFCIT,                            the Director of the NPSO
      and the Project Director.                   PCC shall meet at least once each                      quarter.
      PCC    may,     if    it        requires,     coopt      additional members.               PCC    shall   be
      responsible          for        the     over-all      coordination          of     mattersconcerning
       implementation         of      the     Project,    including     the resolution           ofassociated
      policy        issues,           theestablishment          of   implementation guidelines,
      coordination and cooperation between government agencies and departments
      concerned with the Project and the monitoring and review of progress under
       the Project.

II.    Operation and Maintenance (0 & M) and Other Matters

QAM

5.    The    Borrower       shall      take     appropriate      measures        to    provide   the necessary
       funds, manpower and facilities required to ensure the continued operation
      and maintenance of all Project facilities during implementation and after
      completion of the Project.

Staffing

6.    The Borrower shall make available all necessary technical and administra­
       tive staff required for the Project, on a timely basis.                              In particular the
      Borrower shall cause DALF to:

       (i)   assign one experienced                field extension officer as Farm Manager for
             each     agricultural             center    provided     with        experimental         plots    and
             demonstration farms?

      (ii)   recruit graduates from Tagabe Agricultural School for replacements in
             the extension field force;                  and

     (iii)   recruit young farmers as trainees for each demonstration farm.

                                                                                                          .../26.
2b

                                                                                                        Schedule 6

7.    The Borrower shall also cause the staffing of the Agricultural Information
      Office to be strengthened by the provision of two local staff, to ensure
      continued operation of its services during extended overseas training for
      two trainees and to increase its capacity upon completion of training.

Land Acquisition

8.    The   Borrower       shall       take    all    actions     necessary      to     acquire    and/or       make
      available      on    a    timely basis and              in accordance with the agreed Project
      implementation schedule all                    lands,    rights of way and accesses as may be
      required      for    the Project.          In particular,           land required for the demon­
      stration      farms       shall     be   specifically        demarcated          and    acquired     by    the
      Borrower prior to the year for which implementation is scheduled.

9.    The     Borrower     shall make available at not                   cost    to    the Project        the    land
      required for the Veterinary Laboratory.                       The site shall be located close
      to Port Vila         and with access             from the existing main roads and shall be
      provided fully with public services.

Agricultural Radio

10. The Borrower shall provide a suitable short-wave radio frequency to DALF
       for the Project.

Training

11.    DALF     shall,      subject       to    the    Borrower's        rules   and     regulations       and    in
       consultation            with     the    Bank,      determine       training       programs        required,
       formulate          appropriate          selection        procedures,           specify     qualification
       requirements         and       select   candidates        for training fellowships under the
       Project.

12.    The Borrower and DALF shall                    set up a system of bonding for DALF staff
       granted fellowships to ensure that they return to Vanuatu after comple­
       tion    of    their        training     and     provide     the     service      for     which    they    are
       trained.
SCHEDULE       2

                                 DEVELOPMENT CREDIT AGREEMENT

AGREEMENT,   dated     5    August,      1983    between       REPUBLIC OF VANUATU         (hereinafter
called the Borrower)        and INTERNATIONAL DEVELOPMENT                ASSOCIATION (hereinafter
called the Association).

WHEREAS:
      (A)    the Borrower has requested the Association to assist in the financ­
             ing of     the Project described           in Schedule 2 to this Agreement by
             exending the Credit as hereinafter provided;

      (B)    the Borrower has applied to the Asian Development Bank (hereinafter
             called the ADB) for a loan (hereinafter called the ADB Loan) from
             the ADB
                 *s         Special Funds recources in various currencies equivalent
             to One million twenty-nine thousand and six hundred Special Drawing
             Rights    (SDR 1,029,600)          to assist       in financing the Project on the
             terms and conditions set forth in an agreement (hereinafter called
             the     ADB Loan Agreement)(Special                Operations)   to    be   entered   into
             between the Borrower and the ADB;

      (C)    the Borrower has applied to ADB for technical assistance relating
             to the Project         in an amount not            to exceed the equivalent of two
             hundred       and   sixty    five    thousand       dollars   ($265,000)(hereinafter
             called the ADB Grant);             and

      (D)    ADB and       the Association        intend to enter into an agreement, which
             agreement will be confirmed by the borrower (hereinafter called the
             Administration Letter) making arrangements for the ADB to process
             applications for withdrawal of the proceeds of the financing to be
             provided       severally      by    ADB   and      the   Association    and     regulating
             certain other matters of common                   interest in connection with such
             *
             financing

WHEREAS the Association has agreed, on the basis inter alia of the foregoing,
to extend the Credit to the Borrower upon the terms and conditions hereinafter
set forth;

NOW THEREFORE the parties hereto hereby agree as follows:

                                                                                                 .../3.
2

                                                   ARTICLE    1

                                  General Conditions;             Definitions

Section 1.01.        The parties to this Agreement accept all the provisions of the
General        Conditions        Applicable     to     Development         Credit       Agreements     of   the
Association,       dated June       30,    1980,     with the       same force and effect as if they
were fully set forth herein (said General Conditions Applicable to Development
Credit    Agreements        of    the     Association       being      hereinafter      called   the   General
Conditions).

Section    1.02.     Wherever used in this Agreement, unless the context otherwise
requires, the several terms defined in the General Conditions and in the Pre­
amble to this Agreement have the respective meanings therein set forth and the
following additional terms have the following meanings:

         (a)     "MLNR"      means      the Ministry of Land and Natural Resources of the
                 Borrower;

         (b)     "DALF"     means the Department of Agriculture, Livestock and Forestry
                 within MLNR;        and

         (c)     "Project facilities"              means the facilities to be provided or con­
                 structed under the Project.

                                                ARTICLE       II

                                                   The Credit

Section 2.01.       The Association agrees to lend to the Borrower, on the terms and
conditions       in the Development Credit Agreement                      set   forth or      referred to, an
amount in various currencies equivalent to one million nine hundred thousand
special Drawing Rights (SDR 1,900,000).

Section 2.02.        The amount of the Credit may be withdrawn from the Credit Ac­
count     in accordance with            the provisions of Schedule 1 to this Agreement, as
such     Schedule    may     be    amended     from    time       to   time     by   agreement   between    the
Borrower and the Association,                 for expenditures made              (or,    if   the Association
shall    so agree,     to be made)          in respect of           the   reasonable cost of goods and
services required for the Project and to be financed out of the proceeds of the
Credit.

                                                                                                        ,../3.
3

Section 2.03
        *             Except as the Association shall otherwise agree, procurement of
the goods and civil works 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 2.04.         The Closing Date shall be June 30,                       1989 or such later date as
the Association        shall    establish.           The Association           shall promptly notify the
Borrower of such later date.

Section 2.05.

       (a)     The Borrower shall pay to the Association a commitment charge at the
               rate    of   one-half      of       one    per    cent   (1/2       of   1%) per annum on the
               principal amount of the Credit not withdrawn from time to time. The
               commitment charge shall accrue from a date sixty days after the date
               of the Development Credit Agreement to the respective dates on which
               amounts shall be withdrawn by the Borrower from the Credit Account
               or shall be cancelled.

       (b)     The commitment charge shall be paid:

               (i)    at such places as the Association shall reasonably request^

              (ii)    without restrictions of any kind imposed by, or in the terri­
                      tory 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 2.06.         The Borrower shall pay to the Association a service charge at
the   rate    of     three-fourths       of    one       per    cent    (3/4 of         1%)    per    annum      on    the
principal amount of the Credit withdrawn and outstanding from time to time.

Section      2.07.      Commitment        charges          and      service    charges         shall      be     payable
semiannually on June 15 and December 15 in each year.

                                                                                                                    .../4.
- 4 -

Section 2.08.      The Borrower shall rfepdy the principal amount of the Credit in
semiannual   installments     payable   on    each    June   15 and December      15 commencing
December 15,    1993, and ending June 15, 2033, each installment to and including
the installment payable on June 15, 2003, to be one-half of one per cent (1/2
of 17) of such principal amount, and each installment thereafter to be one and
one-half per cent (1-1/2%) of such principal amount.

Section 2.09.      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   shall   carry    out    the    Project   through   DALE with    due
             diligence and efficiency and in conformity with appropriate adminis­
             trative,    financial,     engineering     and    agricultural      practices,   and
             shall provide,    promptly as needed, the funds,            facilities, services
             and other resources required for the purpose.

      (b)    Without    limitation on the provision of            sub-section (a) above,      the
             Borrower shall carry out or cause to be carried out all the obliga­
             tions set forth in Schedule 6 to the ADB Loan Agreement.                   Notwith­
             standing the termination of the ADB Loan Agreement or the Adminis­
             tration Letter, the provision of this sub-section and the relevant
             provisions of Schedule 6 of the ADB Loan Agreement shall continue to
             remain in force and effect as if the said provisions of Schedule 6
             of the ADB Loan Agreement are fully set forth herein.

Section 3.02.      In order to assist the Borrower in, among others, agricultural
training, extension and information, the Borrower shall employ or cause to be
employed, consultants whose qualifications, experience and terms and conditions
of employment shall be satisfactory to the Association, such consultants to be
selected and employed in accordance with principles and procedures of selection
and employment included in Schedule 5 co the ADB Loan Agreement.

                                                                                          .,./5.
- 5 -

Section 3.03.

     (a)     The Borrower undertakes to insure, 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, transpor­
             tation and delivery thereof to the place of use or installation, and
             for   such    insurance       any     indemnity        shall    be    payable   in    a     currency
             freely usable by the Borrower to replace or repair such goods.

     (b)     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.

Section 3.04.

     (a)     The Borrower shall            furnish to the           Association, 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 Association shall reasonably request.

     (b)     The Borrower:

             (i)   shall    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 that         goods and
                   services     financed          out   of    the    proceeds of the Credit,              and to
                   disclose their use in the Project;

            (ii) shall      enable    the     Association's           representatives        to    visit       the
                   facilities and construction sites included in the Project and to
                   examine the goods financed out of the proceeds of the Credit and
                   any relevant records and documents;                      and

           (iii)   shall    furnish to the Association at regular intervals all such
                   information       as     the    Association        shall       reasonably      request con­
                   cerning the Project, its cost and, where appropriate, the bene­
                   fits to be derived from it, the expenditure of the proceeds of
                   the     Credit    and    the     goods     and    services       financed      out    of     such
                   proceeds.

                                                                                                              *»./6.
- 6 -

      (c)    Upon the award by the Borrower of any contract for goods, works or
             services       to    be     financed         out     of    the     proceeds        of    the Credit,     the
             Association may publish a description thereof, the name and nationa­
             lity of the party to whom the contract was awarded and the contract
             price.

      (d)    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 Association,
             the Borrower shall prepare and furnish to the Association a report,
             of such scope and in such detail as the Association 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 Association of their respective
             obligations under               the Development             Credit Agreement and the accom­
             plishment of the purposes of the Credit.

                                                    ARTICLE        IV

                                               Other Covenants

Section 4,01.

      (a)    The    Borrower        shall       maintain          or     cause       to    be   maintained       records
             adequate       to     reflect          in    accordance           with       consistently      maintained
             appropriate          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)   Without limitation to the foregoing, the Borrower shall:

             (i)    maintain           or     cause         to     be         maintained         separate       accounts
                    reflecting all expenditures on account of which withdrawals are
                    requested from the Credit Account on the basis of state ments
                    of expenditure;

            (ii)    retain,        until      one        year    after        the    Closing     Date,    all   records
                    (contracts,             orders,       invoices,       bills,          receipts and other docu
                    ments)       evidencing           the       expenditures          on account of which with
                    drawals are requested from the Credit Account on the basis
7

                        of statements of expenditure;                     and

               (iii)    enable       the Association's representatives to examine such re­
                        cords .

         (c)    The Borrower shall:

                 (i)    have the accounts referred to in paragraph (a) of this Section
                        for each fiscal year audited,                      in accordance with appropriate
                        auditing principles consistently applied, by independent audi­
                        tors acceptable to the Association;

                (ii)    furnish to the Association,                   as soon as available, but in any
                        case not later than six months after the end of each such year,
                        a certified copy of the report of such audit by such auditors,
                        of such scope and in such detail as the Association shall have
                        reasonably           requested,        including         without     limitation         to    the
                        foregoing,        a     separate opinion by said auditors in respect of
                        the    expenditures        and records            referred to        in paragraph (b) of
                        this Section as to whether the proceeds of the Credit withdrawn
                        from      the     Credit     Account         on     the     basis     of     statements        of
                        expenditure have been used for the purpose for which they were
                        provided;         and

               (iii)    furnish      to      the Association such other information concerning
                        said accounts,           records and expenditures and the audit thereof
                        as the Association shall from time to time reasonably request.

Section 4.02.           The Borrower shall cause the Project facilities to be operated,
maintained       and    repaired        in    accordance with          sound administrative,               financial,
engineering, agricultural development and maintenance and operational practices
and shall provide the funds, facilities,                         services and other resources for the
purpose.

Section 4.03.           The Association may, by notice to the Borrower, delegate to the
ADB under an administration letter, for the duration of such period as may be
set     forth    in     the    Administration Letter,                any    or    all   of    its    functions        and
responsibilities under Articles III and IV of this Agreement and the Borrower
shall    comply        with    the      provisions    of       the    said       Articles    as     if    the   ADB    is
substituted for the Association therein.                         The       obligation        of     the    Borrower
                                                                                                                 .../0.
- 8 -

to comply with said Articles              III and IV shall continue         in force and effect
notwithstanding any termination or suspension of such delegated functions and
responsibilities to the ADB under the Administration Letter.

                                             ARTICLE V

                               Remedies of the Association

Section 5.01.

      (a)    For   the    purposes    of    Section    6.02 of     the General Conditions,    the
             following additional events are specified pursuant to paragraph (h)
             thereof, namely, that subject to paragraph (b) of this Section:

             (i)   The right of the Borrower to withdraw the proceeds of the ADB
                   Grant or ADB Loan made to the Borrower for the financing of the
                   Project     or    any     part     thereof    shall   have   been   suspended,
                   cancelled or terminated             in whole or in part, pursuant to the
                   terms of the ADB Grant or ADB Loan, respectively, therefor; or

            (ii)   the ADB Loan shall          have become due and payable prior to the
                   agreed maturity thereof.

      (b)    Paragraph (a) of this Section shall not apply if:

             (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.

Section 5.02.      For the purposes of Section 7.01 of the General Conditions, the
following   additional     event     is    specified    pursuant    to   paragraph (d)   thereof,
namely, that the event specified in paragraph (a)(ii) of Section 5.01 of this
Agreement shall occur.
- 9 -

                                        ARTICLE VI

                              Effective Date;        Termination

Section 6.01.      The following events are specified as additional conditions to
the effectiveness of      the Development Credit Agreement within the Gleaning of
Section 12,01 (b) of the General Conditions, namely, that:

      (a)    all conditions precedent to the effectiveness of the ADB Loan, other
             than a condition precedent for the effectiveness of this Agreement,
             shall have been fulfilled;        and

      (b)    all conditions precedent to the effectiveness of the ADB Grant shall
             have been fulfilled.

Section 6.02.      The date   November 3, 1983, is hereby specified for the purposes
of Section 12.04 of the General Conditions.

Section    6.03.    The   obligations   of   the Borrower under Section 5.02 of      this
Agreement shall cease and determine on the date on which the Development Credit
Agreement shall terminate or on a date 25 years after the date of this Agree­
ment, whichever shall be the earlier.

                                        ARTICLE VII

                      Representatives of the Borrower;        Addresses

Section 7.01.      The Minister of Finance, Commerce,         Industry and Tourism of the
Borrower    is designated as    representative of the Borrower for the purposes of
Section 11.03 of the General Conditions.

                                                                                  .../10.
10 -

Section   7.02.     The   following   addresses    are   specified    for    the    purposes      of
Section 11.01 of the General Conditions:

      For the Borrower:
            Minister of Finance, Commerce, Industry and Tourism,
            P.O. Box 31,
            Port Vila,Republic of Vanuatu

                                                            Telex:      1049       VATUBK    NH

      For the Association:
            International Development Association
            1618 H Street, N.M.
            Washington, D.C. 20433
            United States of America

            Cable address:
                  INDEVAS, Washington, D.C.

                                                            Telex:     440093 (ITT)
                                                                       248423 (RCA)         or
                                                                       64145 (WUI)

IN WITNESS WHEREOF,       the parties hereto,      acting through their representatives
thereunto duly authorized,       have caused this Agreement          to be   signed in their
respective names in Manila, Republic of the Philippines, as of the day and year
first above written.

                            REPUBLIC OF VANUATU

                            By   H00N-M0K CHUNG
                                 Authorized Representative

                            INTERNATIONAL DEVELOPMENT ASSOCIATION

                            By   AHMED JEHANI
                                 Authorized Representative

                                                                                            .../II.
11

                                          SCHEDULE           1

                         Withdrawal of the Proceeds of the Credit

1*    The    table below sets forth the Categories of items to be financed out of
      the proceeds of the Credit, the allocation of the amounts of the Credit to
      each    Category   and   the   percentage         of       expenditures    for   items    so    to   be
      financed in each Category:

                                     Amount of the
                                     Credit Allocated                           %of
                                     (Expressed in                              Expenditures
Category                             SDR Equivalent)                            to be Financed

(1)   Civil works                    719,000                                    100%

(2)   Machinery and                  161,000)                                   100% of foreign
      equipment                                                                 expenditures,

(3)   Vehicles                       116,000)                                   100% of local
                                               )                                expenditures
                                               )                                (ex-factory costs) and

(4)   Agricultural inputs            30,000)                                    807o of local expen
                                           )                                    ditures for other
                                           )                                    items procured locally

(5)   Training                       180,000                                    100%

(6)   Incremental opera-             132,000                                    100%
      ting costs

(7)   Unallocated                    562,000

      TOTAL                      1,900,000
- 12 -

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.

3.   The disbursement percentages have been calculated in compliance with the
     policy of     the Association that the proceeds of the Ctedit shall not be
     disbursed on account of payments for taxes levied by, or in the territory
     of,    the   Borrower        on     goods    or        services,     or    on   the    importation,
     manufacture, procurement or supply thereof;                        on this basis, if the amount
     of any such taxes levied on or in respect of items in any Category de­
     creases or        increases,      the Association may,             by notice to       the Borrower,
     increase or decrease the disbursement percentage then applicable to such
     Category as required to be consistent with the aforementioned policy of
     the Association.

4.   Notwithstanding the provisions of paragraph 1 above, no withdrawals shall
     be    made   in    respect     of    expenditures           made   prior   to   the   date   of   this
     Agreement.

5.   Notwithstanding the allocation of an amount of the Credit or the disbur­
     sement percentages set forth in the table in paragraph 1 above,                               if the
     Association has reasonably estimated that the amount of the Credit then
     allocated     to    any    Category will          be    insufficient to finance          rhe agreed
     percentage of all expenditures in that Category, the Association may, by
     notice to the Borrower:

     (i)    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 Association are
            not needed to meet other expenditures;                      and

                                                                                                  . ../13.
13

       (ii)      if such reallocation cannot                        fully meet       the estimated shortfall,
                 reduce the disbursement percentage then applicable to such expen­
                 ditures in order that further withdrawals under such Category may
                 continue until all expenditures thereunder shall have been made.

6.    If the Association shall have reasonably determined that the procurement
       of any item in any Category is inconsistent with the procedures set forth
       or referred to in this Agreement, no expenditure for such item shall be
       financed        out      of        the proceeds     of the Credit,           and the Association may,
       without       in     any      way restricting or             limiting any other              right,   power or
       remedy     of      the      Association        under       the       Development    Credit Agreement,         by
       notice     to      the      Borrower,        cancel      such        amount of the Credit           as,   in the
       Association's reasonable opinion,                          represents the amount of such expendi­
       tures which would otherwise have been eligible for financing out of the
       proceeds of the Credit.

                                                     SCHEDULE           2
                                            Description of the Project

The   objective        of    the          Project   is   the      improvement       of     essential       smallholder
support      services        in      Vanuatu.        The     Project         will   encourage       more     efficient
utilization     of        resources,          increase       smallholders'          cash    income,     enlarge     the
Borrower's revenue base and provide training facilities.                                    The Project consists
of the following:

1•    Experimental Plots and Demonstration Farms

       Establishment              and maintenance          of     experimental        plots    and demonstration
       farms    with        support         services at 8 agricultural centers of DALF in the
       Project area.

2.    Training and Fellowships

       (a)     Provision             of     in-service-training               facilities      for    the     extension
               divisions,            and overseas fellowships                 and study tours         for extension
               staff, agricultural teachers, agricultural information officers and
               veterinary laboratory technicians;
- 14 -

     (b)   Revision      of     post     secondary     education      course    held    at    the   Tag a be
           Agricultural School;            and

     (c)   Provision of facilities for farmers'                     training at the demonstration
           farms.

3.   Extension Service

     Provision      of houses,         offices/storcs,       vehicles,    dinghys and radio-tele­
     phone equipment for upgrading the extension service of DALF.

4.   Agricultural Information Service

     Provision      of equipment,         information material,          incremental         salaries and
     material    cost     for    improving       the   existing      information       services     in the
     Agricultural Information Office of DALF.

5.   Livestock Service

     Establishment of a veterinary laboratory through the provision of labora­
     tory building, equipment and chemical supplies.

6.   Project Office

     Provision of office furniture, equipment and incremental salaries for the
     Project Office.

7.   Consu1ting Service

     Provision      of   consulting       services     for       agricultural   training,       extension
     services and information.

                                           *       *         *

     The Project is expected to be completed by December 31, 1988,

                                                                                                    .../15.
SCHEDULE      3

                                         Procurement

Except    as    the Association may otherwise       agree,       goods and civil works to be
financed out of       the proceeds of the Credit shall be procured under contracts
awarded    in    accordance   with   Schedule   4 of       the   ADB Loan Agreement,   provided
always that procurement of such goods and civil works shall be from suppliers
and contractors      in countries     in respect of which withdrawals from the Credit
Account may be made pursuant to Section 5.01 of the General Conditions.
RgPUBLlQUE DE VANUATU

                                         I

                                 PROJET DE LO1
 ’ 54 DE 1983 RELATIF AUX CONVENTIONS D'OUVERTURE DE CREDIT (PROGRAMME DE VULGARISA­
TION ET DE FORMATION AGRICOLES) ENTRE LA REPUBLIQUE DE VANUATU ET LA BANQUE ASIATIQUE
DE DEVELOPPEMENT ET ENTRE LA REPUBLIQUE DE VANUATU ET L'ASSOCIATION INTERNATIONALE DE
DEVELOPPEMENT (RATIFICATION)     CERTIFICATION
         PAR LE SECRETAIRE GENERAL DU PARLEMENT

                                             Signature: ............................. ....................
                                                  SECRETAIRE GENERAL DU PARLEMENT
                                                   5 Septembre                 19B J

                                             Signature : ............. _.... .............................. .

                                                        PRESIDENT DE LA REPUBLIQUE

                                                                                        Septembre 19® 3
REPUBLIQUE DE VANUATU

 LOI N° 34 DE 1983 RELATIF AUX CONVENTIONS D'OUVERTURE DE CREDIT
 (PROGRAMME DE VULGARISATION ET DE FORMATION AGRICOLES) ENTRE LA
 REPUBLIQUE DE VANUATU ET LA BANQUE ASIATIQUE DE DEVELOPPEMENT ET
 ENTRE LA REPUBLIQUE DE VANUATU ET L'ASSOCIATION INTERNATIONALE DE
                     DEVELOPPEMENT (RATIFICATION)

                               Sommaire

1.   Ratification.

2.   Entree en vigueur.

     Annexe 1

     Annexe 2
REPUBLIQUE DE VANUATU

     LOI N° 34 DE 1983 RELATIVE AUX CONVENTIONS D'OUVERTURE
     DE CREDIT (PROGRAMME DE VULGARISATION ET DE FORMATION
     AGRICOLES) ENTRE LA REPUBLIQUE DE VANUATU ET LA BANQUE
     AS1ATIQUE DE DEVELOPPEMENT ET ENTRE LA REPUBLIQUE DE
     VANUATU ET L‘ASSOCIATION INTERNATIONALE DE DEVELOPPEMENT
                            (RATIFICATION)

Portant ratification de la Convention d'ouverture de credit signee le
5 aoQt 1983 par la R^publique de Vanuatu et la Banque Asiatique de
D^veloppement et de la Convention d'ouverture de crddit signee le
5 aoOt 1983 par la R6publique de Vanuatu et 1'Association Internationale
de D^veloppement.

Le President de la Rdpublique et le Parlement promulguent le texte suivant :

RATIFICATION
1.    1)   Est approuv^e et ratifi^e par les prSsentes la Convention d'ouver­
           ture de credit signee le 5 aoOt 1983 entre la Rgpublique de Vanuatu
           et la Banque Asiatique de D^veloppement, dont le texte est reproduit
            & 1'annexe 1.

2.    2)   Est approuv^e et ratifide par les presentee la Convention d'ouverture
           de credit signee le 5 aoOt 1983 par la Rgpublique de Vanuatu et
            1'Association Internationale de D6veloppement dont le texte est repro­
           duit & 1'annexe 2.

      3)   Vanuatu s'engage irr^vocablement & respecter les conditions desdite9
           Conventions.

ENTREE EN VIGUEUR
2.    Le present texte entrera en vigueur le jour de sa publication au Journal

      officiel.
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