Assurance and conditions to be sought at negotiations

At appraisal the following needs to be given particular attention.

• Subsidiary agreement with Rwanda National Bank. This will concern (a) the role of the RNB, and (b) the rate of interest charged to the RDB and other financial institutions to draw funds from the RNB used for on-lending, and (c) the provision that funds drawn by the RDB to pre-finance the cooperative shares will bear no interest.

• Subsidiary agreement with RDB. This will concern the arrangement regarding the operational role of the RDB in promoting the establishment of the cooperative companies and the coordination of the lending operations envisaged under the project with other participating national financial institutions.

• Conditions of effectiveness to include:

  The preparation by the Nshili communities of the list of the beneficiaries of the distribution of the OCIR-Thé Nshili plantation and of the new smallholder tea plots in the OCIR-Thé land concession at Nshili, such activity to be funded under the SOF

• Condition of disbursement under the tea development component for other activities than the distribution of the Nshili OCIR Thé plantation:

Effective assignment of individual plots to all beneficiaries, including minimum 33% women head of HH
Issue of usufructuary title to all beneficiaries
Formation of cooperatives of beneficiaries and granting of personnalité juridique to all the cooperatives
Preparation by MINAGRI of the complete documentation necessary for the transfer of the OCIR-Thé Nshili woodlots and housing compound to the Nshili Tea Company (NTC), upon establishment of the NTC.

• Condition of disbursement under the coffee diversification component:

Formal acceptance of TWIN as project technical advisor and signature of the contract with TWIN in accordance with the principles established in the appraisal report
Government assurances regarding the policy of location of new coffee washing stations, to avoid overlapping of areas of influence

• Government to accept that an internationally recruited specialist advisor to the project coordinator be recruited for one year to assist in negotiating all the contracts with the service providers. Pro-forma contract will be prepared under the SOF. Failure to sign the contracts with the key service providers within one year from project effectiveness will cause the cancellation of the Loan!

• The Ministry of Agriculture to specifically commit to provide suitable office accommodation for the PCU central office in Kigali, including space required by TWIN, and for the provincial units of the PCU in Gikongoro, Kibuye, and Kigali-Ngali.