Bolivia - Agricultural Credit Project : Credit 0561 - Project Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 561 BO Project Agreement (Agricultural Credit Project) BETWEEN INTERNATIONAL DEVELOPMENT ASSOCIATION AND BANCO AGRICOLA DE BOLIVIA DATED JUNE 20, 1975 I PROJECT AGREEMENT AGREEMENT, dated June 20, 1975, between INTERNATIONAL DEVELOPMENI ASSOCIATION (hereinafter called the Association) and BANCO AGRICOLA DE BOLIVIA (hereinafter called BAB). WHEREAS by the Development Credit Agreement of even date herewith between Republic of Bolivia (hereinafter called the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to seven million and five hundred thousand dollars ($7,500,000), on the terms and conditions set forth in the Development Credit Agreement, but only on condition that BAB agree to undertake such obligations toward the Association as hereinafter set forth; and WHEREAS BAB, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, has agreed to undertake the obligations hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I Definitions Section 1.01. Wherever used in this Agreement, unless the context shall otherwise require, the several terms defined in the Development Credit Agreement and in the General Conditions (as so defined) have the respective meanings therein set forth. ARTICLE II Execution of the Project Section 2.01. BAB shall carry out that portion of Part A of the Project described in Schedule 2 to the Development Credit Agreement to be carried out by it in its capacity as a Participating Bank with due diligence and efficiency and in conformity with appropriate administrative, financial, banking and agricultural practices. (b) The operating policies and procedures for the carrying out of Part A of the Project shall be as set forth in Schedule 3 to the Development Credit 4 Agreement, and BAB shall ensure at all times that said operating policies and procedures are duly carried out. Section 2.02. In order to assist BAB in the carrying out of Part A of the Project, BAB shall (i) expand its livestock project division to include agricultural projects and related technical responsibilities, such division to be called Agricultural and Livestock Project Division (ALPD); (ii) cause ALPD to have an adequate number of qualified staff under the direction of the Project Director, who shall be assisted by the Deputy Project Director. Section 2.03. Except as the Association shall otherwise agree, goods, works and services (other than consultants' services) for the Project and to be financed out of the proceeds of the Credit allocated from time to time to Category (2) of the table in paragraph 1 of Schedule 1 to the Development Credit Agreement, shall be procured in accordance with the provisions of Schedule 1 to this Agreement. Section 2.04. BAB: (i) shall maintain records adequate to record the progress of Part A of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Credit relent to it by the Borrower and to disclose the use thereof in the Project; (ii) shall enable the Association's representatives to visit the facilities and farms included in Part A of the Project, and to examine the goods financed out of such proceeds and any relevant records and documents; and (iii) shall furnish to the Association all such information as the Association shall reasonably request concerning Part A of the Project, the expenditure of the proceeds of the Credit so relent to it and the goods and services financed out of such proceeds. Section 2.05. BAB shall establish a special unit within ALPD to carry out, in respect of Part A of the Project, a systematic recording of on-farm investments, incomes and expenditures, and other relevant data, such recording to be made on the basis of a representative sample of farms included in Part A of the Project. Section 2.06. (a) BAB shall, at the request of the Association, exchange views with the Association with regard to the progress of Part A of the Project, the performance of its obligations under this Agreement and under the Subsidiary Loan Agreement, and other matters relating to the purposes of the Credit. (b) BAB shall promptly inform the Association of any condition which interferes or threatens to interfere with, the progress of Part A of the Project, the accomplishment of the purposes of the Credit, or the performance by BAB of its obligations under this Agreement and under the Subsidiary Loan Agreement. I 5 Section 2.07. BAB shall cause ALPD to provide such agricultural extension and other technical services as shall be required by the Beneficiaries for Part A of the Project, and shall cause such services to be made available to the Beneficiaries through an adequate staff of officers trained in the techniques appropriate to the Farm Plans. ARTICLE III Management and Operations of BAB Section 3.01. (a) BAB shall complete within 18 months from the date of this Agreement, or such other date as the Association shall agree (i) a detailed study of its financial condition; (ii) a management and organizational study based on job analysis and evaluation; (iii) a revision of its accounting procedures; and (iv) a training program for its staff. (b) In order to assist BAB in the carrying out of the studies and training program referred to in the preceding paragraph (a) of this Section, BAB shall employ consultants, whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. (c) BAB shall, after having afforded the Association a reasonable opportunity to comment, adopt an overall reorganization plan, including staff development, based on the recommendations of the consultants referred to in the preceding paragraph (b) of this Section and shall put such plan into effect within six months after receiving such recommendations. Section 3.02. BAB shall (i) within 12 months from the date of this Agreement, or such other date as the Association shall agree, revise, in consultation with the Association, its regulations concerning future operations with a view to improving its financial practices; and (ii) put such regulations into effect in a manner satisfactory to the Association. Section 3.03. BAB shall, within 18 months from the date of this Agreement, or such other date as the Association shall agree, review with the Association the possibility of integrating the management and finances of ALPD into those of BAB, taking into account therefor the strengthening of BAB's organization and finances. 6 ARTICLE IV Financial Covenants Section 4.01. BAB shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. Section 4.02. BAB shall establish and maintain a separate account in respect of the Project and: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements), including such separate account, for each fiscal year audited, in accordance with sound auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than four months after the end of each such year, (A) certified copies of its financial statements and such separate account for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning the accounts and financial statements of BAB, including such separate account, and the audit thereof as the Association shall from time to time reasonably request. Section 4.03. BAB shall: (i) carry out an analysis of its loans which have been in arrears, classifying debts by age, category of borrowers and amounts recoverable and non-recoverable; (ii) write-off such loans as BAB shall have reasonably determined, on the basis of such analysis, to be non-recoverable; and (iii) submit to the Association for approval, not later than 12 months from thc date of this Agreement, or such other period as the Association shall agree, a financial plan to be undertaken which shall ensure that BAB will maintain an acceptable financial standing according to appropriate banking practices. ARTICLE V Effective Date; Termination; Cancellation and Suspension Section 5.01. This Agreement shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Section 5.02. (a) This Agreement and all obligations of the Association and of BAB thereunder shall terminate on the earlier of the following two dates: I 7 (i) the date on which the Development Credit Agreement shall terminate in accordance with its terms; or (ii) a date 15 years after the date of this Agreement. (b) If the Development Credit Agreement terminates in accordance with its terms before the date specified in paragraph (a)(ii) of this Section, the Association shall promptly notify BAB of this event. Section 5.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the Development Credit Agreement. ARTICLE VI Miscellaneous Provisions Section 6.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed co have been duly given or made when it shall be delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party's address hereinafter specified or at such other address as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. For BAB: Banco Agricola de Bolivia Casilla 1179 La Paz, Bolivia 8 Cable address: BANAGRICO LaPaz Section 6.02. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Agreement on behalf of BAB may be taken or executed by the Presidente and the Gerente General of BAB or such other person or persons as they shall designate in writing. Section 6.03. BAB shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of the person or persons who will, on behalf of BAB, take any action or execute any documents required or permitted to be taken or executed by BAB pursuant to any of the provisions of this Agreement. Section 6.04. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. 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 the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Adalbert Krieger Regional Vice President Latin America and the Caribbean BANCO AGRICOLA DE BOLIVIA By /s/ Luis Arnal Authorized Representative I 9 SCHEDULE Procurement A. General Procedures 1. Contracts concerning the acquisition of vehicles for ALPD staff shall be let Linder procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in April 1972, as revised in October 1972 (hereinafter called the Guidelines), on the basis of international competitive bidding. 2. Office and laboratory equipment costing in the aggregate not more than the equivalent of $110,000 shall be purchased through regular commercial channels, at a reasonable price, account being taken also of other relevant factors such as time of delivery, efficiency and reliability of the equipment and availability of service facilities. 3. Civil works costing in the aggregate not more than $200,000 shall be directly contracted, provided, however, that in the case of any such works costing more than the equivalent of $75,000, the procurement thereof shall be made through competitive bidding advertised locally in accordance with the Borrower's procedures. B. Review of Procurement Decisions by the Association 1. Review of invitation to bid and of proposed awards and final contracts. With respect to all contracts referred to in Part A.1 hereof: (a) Before bids are invited, BAB shall furnish to the Association, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Association shall reasonably request. Any further modification to the bidding documents shall require the Association's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, BAB shall, before a final decision on the award is made, inform the Association of the name of the bidder to which it intends to award the contract and the reasons for the intended award 10 and shall furnish to the Association, in sufficient time for its review, a detailed report, on the evaluation and comparison of the bids received, together with the recommendation for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform BAB and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Association's concurrence, materially differ from those on which bids were asked. (d) Two conformed copies of the contract shall be furnished to the Association promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract. 2. With respect to each contract to be financed out of the proceeds of the Credit and not governed by the preceding paragraph, BAB shall furnish to the Association, promptly after its execution and prior to the submission to the Association of the first application for withdrawal of funds from the Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of bids, recommendations for award and such other information as the Association shall reasonably request. The Association shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform BAB and state the reasons for such determination.