Romania - Moldova Agricultural Credit Project : Loan 2077 - Loan Agreement - Conformed

OFFICI LOAN NUMBER 2077 RO LDOCUMTS Loan Agreement (Moldova Agricultural Credit Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and BANCA PENTRU AGRICULTURA SI INDUSTRIE ALIMENTARA Dated , 1982 LOAN NUMBER 2077 RO LOAN AGREEMENT AGREEMENT, dated , 1982, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and BANCA PENTRU AGRICULTURA SI INDUSTRIE ALIMENTARA (hereinafter called the Borrower). WHEREAS (A) the Borrower has requested the Bank to assist in the financing of the Project described in Schedule 2 to this Agreement by making the loan as hereinafter provided; and (B) the Borrower intends to contract loans from foreign lending institutions up to an approximate aggregate amount equiva- lent to one hundred million dollars ($100,000,000) to assist further in the financing of the said Project. NOW THEREFORE, the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated October 27, 1980, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agree- ments of the Bank being hereinafter called the General Condi- tions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Romania" and "Guarantor" both mean the Socialist Republic of Romania; (b) "MAFI" means the Ministry of Agriculture and Food Industry of Romania; (c) "DELIF" means the Directorate for Exploitation of Land Reclamation Works in MAFI, established by Decree No. 298/1979 of the Council of State of Romania; -2- (d) "Foreign Trade Bank" means the Romanian Bank for Foreign Trade, established by Law No. 16/1968 of Romania; (e) "ROMAGRIMEX" means the Romanian Foreign Trade Enter- prise of the Ministry of Agriculture and Food Industry of Romania; established under Law No. 11 of 1971 of Romania, and operating under Decision No. 938 of August 14, 1972 of the Council of Ministers of Romania, as amended from time to time; (f) "BAFI-loan" means a loan or credit made or proposed to be made by the Borrower to a Loan Beneficiary for an Investment Project; (g) "Loan Beneficiary" means a State agricultural enter- prise, DELIF, In agricultural production cooperative, a fGod enterprise, a cereal marketing enterprise, a station for agri- cultural machinery, a pasture enterprise or an individual producer to which a BAFI-loan is proposed to be made or has been made; (h) "Investment Project" means a project for any of the investments included in Parts A through G of the Project and to be carried out by a Loan Beneficiary utilizing the proceeds of a BAFI-Loan; (i) "Lei" means the national currency of Romania; (j) "Charter" means the Charter of the Borrower approved by Decree No. 55 of 1970 of the Council of State of Romania, approved by Law No. 15 of 1970 of Romania, as amended from time to time; and (k) "Projec: Area" means the area comprising of the follow- ing six judets: Neamt, Bacau, Vrancea, Botosani, lasi, Vaslui. ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to ninety-five million dollars ($95,000,000). Section 2.02. (a) The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of -3- Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Bank and the Borrower, on account of disbursements made by the Borrower under BAFI-loans for Investment Projects included in Parts A through G of the Project and to be financed out of the proceeds of the Loan. (b) The Foreign Trade Bank is designated as representative of the Borrower for the purpose of taking any action required or permitted to be taken under the provisions of paragraph (a) of this Section and Article V of the General Conditions. Section 2.03. Except as the Bank and the Borrower shall otherwise agree, contracts for goods and services required for the Project, selected by agreement between the Bank and the Borrower and to be financed out of the proceeds of the Loan, shall be awarded in accordance with the provisions of Schedule 4 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1986 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower and the Guarantor of such later date. Section 2.05. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.06. The Borrower shall pay interest at the rate of eleven and three-fifths per cent (11-3/5%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semiannually on February 1 and August 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. ARTICLE III Execution of the Project Section 3.01. The Borrower shall cause the Project to be carried out with due diligence and efficiency and in conformity -4- with appropriate agricultural, engineering, financial and adminis- trative practices as follows: (a) The Borrower shall be responsible for supervising the execution of the Project, including the procurement of the goods and services required therefor; (b) MAFI shall have the responsibility for the overall coordination of the carrying out of the Project (except Part C thereof) and for the Project-related activities of the other departments and agencies of the guarantor under the Project (except under Part C thereof). (c) DELIF shall have the responsibility for .the overall coordination of the carrying out of Part C of the Project and for the Project-related activities of the other departments and agencies of the guarantor under Part C of the Project; and (d) DELIF shall make or cause to be made a timely supply of the general engineering services required for Part C of the Project, and make timely arrangements with the appropriate con- struction organizations of Romania as required for the civil works and the installations included in Part C of the Project; and (e) ROMAGRIMEX shall make suitable arrangements for the procurement of the goods and services referred to in Section 2.03 of this Agreement. Section 3.02. (a) For each Investment Project, the Borrower shall make a BAFI-loan to the Loan Beneficiary that is to carry out such Investment Project for all or part of the cost of such Investment Project. (b) Each BAFI-loan shall bear interest at a rate which shall be equal to the interest rate then charged by the Borrower in respect of loans for the same type of investments and shall be repaid over 'such period, after such grace period, as shall be consistent with the expected implementation period and yields of such Investment Project and the repayment capacity of the Loan Beneficiary. (c) The Borrower undertakes that, unless the Bank shall otherwise agree, each BAFI-loan will be made on terms whereby the Borrower shall have rights adequate to protect the interests of the Bank and the Borrower, including the right of the Borrower -5- to: (i) require the Loan Beneficiary to carry out and operate the Investment Project with due diligence and efficiency and in accordance with sound technical, agricultural, financial and managerial standards and to maintain adequate records; (ii) require that (A) notwithstanding the provisions of Section 2.03 of the Loan Agreement, the goods and services to be financed out of the proceeds of the BAFI-loan shall be purchased at a reasonable price, account being taken also of other relevant factors such as time of delivery and efficiency and reliability of the goods and availability of maintenance facilities and spare parts therellr and, in the case of services, of their quality and competence c the parties rendering them, and (B) such goods and services shal' be used exclusively in the carrying out of the Investment Project; (iii) inspect and enable representatives of the Bank, if the Bank shall so request, to examine, such goods and the sites, works, plants and construction included in the Investment Project, the operation thereof, and any relevant records and documents; (iv) obtain all such information as the Bank or the Borrower shall reasonably request relating to the foregoing and to the admin- istration, operations and financial condition of the Loan Bene- ficiary; and (v) suspend or terminate the right of the Loan Beneficiary to the use of the proceeds of the BAFI-loan upon failure by such Loan Beneficiary to perform its obligations under its contract with the Borrower. (d) The Borrower shall exercise its rights in relation to the Loan Beneficiary in such manner as to: (i) protect the interests of the Bank and the Borrower; (ii) comply with its obligations under this Agreement; and (iii) achieve the purposes of the Project. Section 3.03. The Borrower shall cause adequate provision to be made for the insurance of the imported goods to be financed out of the proceeds of the Loan against hazards incident to the acquisition, transportation and delivery thereof to the place of importation into the territory of Romania, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. Section 3.04. Except as the Bank and the Borrower shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Loan or any BAFI-loan to be used exclusively for -the Project. -6- ARTICLE IV Achievement of the Purposes of the Project Section 4.01. (a) The Bank and the Borrower agree that, in order to realize the purposes of the Project, it shall be necessary that: (i) the Loan Beneficiaries will be supplied with agricultural, technical, advisory and research services and agricultural financing and marketing facilities, all as required to make optimal produc- tive use of the investments made under -the Project; (ii) MAFI shall make available (A) adequate quantities of chemical fertilizers and adequate transport facilities for Investment Projects to be carried out under Part E of the Project, and (B) adequate numbers of farm machinery and equipment, together with the required spare parts and fuel, for Invest- ment Projects to be carried out under Part A of the Project; (iii) the facilities established under the Project will be designed, operated and maintained with due regard to ecological, environmental and safety factors, and in accordance with sound administra- tive, financial, engineering and agricultural practices; and (iv) the facilities constructed or installed under Part C of the Project shall be operated and maintained by DELIF in close cooperation with the entities cultivating farms in the Project Area, in accord- ance with appropriate agricultural, engineering and administrative practices. (b) The Borrower shall, to the extent that it is authorized under the laws of Romania, ensure that the requirements set forth in this Section will be met. -7- ARTICLE V Management and Operations of the Borrower; Financial Covenants Section 5.01. The Borrower shall manage and conduct its operations and affairs in accordance with appropriate admini- strative and financial standards and practices and in accordance with the Charter. Section 5.02. The Borrower shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. Section 5.03. (a) It is not the practice of the Borrower to create liens as security for debt. Accordingly, the Borrower represents that at the date of this Agreement no lien exists on any of its assets as security for any debt. (b) In the event that, notwithstanding the foregoing, a lien shall be created on any of the Borrower's assets as security for any debt, the Borrower undertakes that, except as the Bank shall otherwise agree: (i) if the Borrower shall create the lien, such lien will equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan, and in the creation of any such lien express provision will be made to that effect, at no cost to the Bank; and (ii) if the lien shall be created by law, the Borrower shall grant, at no cost to the Bank, an equivalent lien satisfactory to the Bank to secure the payment of the principal of, and interest and other charges on, the Loan. Section 5.04. The Bank and the Borrower agree that in carrying out the provisions of this Agreement the Borrower shall take such measures as shall be necessary according to the National Plan for Economic and Social Development of Romania and the applicable laws in order to achieve the purposes of the Project. ARTICLE VI Cooperation and Information; Financial Data Section 6.01. The Bank and the Borrower shall cooperate fully to ensure that the purposes of the Loan will be accom- plished. To that end: -8- (a) the Bank and the Borrower shall from time to time at the request of either party exchange views through their repre- sentatives with regard to the progress of the Project, the bene- fits derived from the Project, the performance of their respective obligations under the Loan Agreement, the fulfillment of the requirements set forth in Section 4.01 of this Agreement and other matters relating to the purposes of the Loan, and the Borrower shall enable the Bank's representatives to exchange views with representatives of the Loan Beneficiaries, MAFI and the other departments, agencies and entities concerned of Romania with regard to the Project, the benefits derived from the Project, and the fulfillment of the requirements set forth in Section 4.01 of this Agreement; (b) the Borrower shall obtain from the Loan Beneficiaries, MAFI and the other departments, agencies and entities of Romania concerned with the Project, and furnish to the Bank, 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 Bank and the Borrower shall agree; (c) the Borrower: (i) shall maintain, or cause to be main- tained, (A) accounts adequate to independently record all Project expenditures and Project-related financial transactions, and (B) procedures adequate to monitor and record the progress of the Project (including its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Loan or any BAFI-loan, and to disclose their use in the Project; and (ii) shall furnish to the Bank within forty- five calendar days after each calendar quarter, a report, of such scope and in such detail as the Bank and the Borrower shall agree, on the progress of the Project during such quarter; (d) the Borrower shall enable the Bank's representatives to visit and examine the goods and services financed out of the proceeds of tho Loan or any BAFI-loan, the facilities and con- struction sites included in the Project and the accounts of the Borrower referred to in paragraph (c) of this Section and the records and documents relating to the Project of the Loan Beneficiary, MAFI and of the departments, agencies and entities of Romania responsible for the Project or any part thereof; (e) the Borrower shall: (i) furnish to the Bank not later than six months after the end of each of its fiscal years, -9- certified copies of its financial statements (balance sheets, statements of income and expenses and related statement,-, as agreed between the Bank and the Borrower), and un:il the com- pletion of the Project certified copies of its accounts referred to in paragraph (c) of this Section, for such fiscal year, both the statements and the accounts to be in the form in which they shall be audited; (ii) submit such statements and accounts including all records supporting certificates referred tc in paragraph 5 of Schedule 1 to this Agreement to an independent audit conducted, in accordance with appropriate auditing prin- ciples consistently applied, by the Ministry of Finance of Romania, and the report of such audit by said auditor, of such scope and in such detail as the Guarantor and the Bank shall agree, including a separate opinion by said auditor in respect of the said certificates showing whether the proceeds of the Loan withdrawn on the basis of such certificates have been used for the purpose for which they were provided; and (iii) furnish to the Bank such other information concerning the before-mentioned financial statements of the Borrower and the audit thereof as the Bank shall from time to time reasonably request; (f) the Bank and the Borrower shall from time to time furnish to each other such additional information as the other party shall reasonably request with regard to the progress of the Project, the expenditure of the proceeds of the Loan and the BAFI-loans, the goods and services financed out of such proceeds, the operations, resources and expenditures of the Loan Benefi- ciary, the benefits derived from the Project and the general status of the Loan; (g) upon the award by the Borrower of any contract for goods, works or services to be financed out of the proceeds of the Loan, the Bank may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price; and (h) 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 Bank and the Borrower, the Borrower shall prepare and furnish to the Bank a report, of such scope and in such detail as the Bank and the Borrower shall reasonably agree, 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 Bank and the Borrower of their respective obligations under the Loan Agreement and the accomplishment of the purposes of the Loan. - 10 - Section 6.02. The Bank and the Borrower shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the progress of the Project, the accomplishment of the purposes of the Loan, the maintenance of the service thereof or the performance by either party of its obliga- tions under the Loan Agreement. ARTICLE VII Effective Date; Termination Section 7.01. The date a ml #112, is hereby specified for the purpose of Section 2.04 of the General Condi- tions. ARTICLE VIII Addresses Section 8.01. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For the Borrower: Banca pentru Agricultura si Industrie Alimentara Strada Smirdan No. 3 Bucharest, Romania - 11 - Cable address: Telex: AGROBANK 11622 Bucharest 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 BANK FOR RECONSTRUCTION AND DEVELOPMENT By Regional Vice President Europe, Middle East and North Africa BANCA PENTRU AGRICULTURA SI INDUSTRIE ALIMENTARA By Rereenatv Authorized Representative - 12 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Part A of the 61,000,000 45% Project (2) Part B (i) of 10,500,000 25% the Project (3) Part B (ii) to 3,000,000 25% (v) of the Project (4) Part C of the 9,000,000 20% Project (5) Part D of the 4,000,000 20% Project (6) Part E of the 3,500,000 20% Project (7) Part F of the 2,500,000 25% Project (8) Part G of the 1,500,000 20% Project TOTAL 95,000,000 - 13 - 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures for goods or services supplied from the territory and in the currency of any country other than Romania; and (b) the term "local expenditures" means expenditures in the currency of Romania and for goods or services supplied from the territory of Romania. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) payments made for expenditures prior to the date of this Agreement; (b) disbursements under BAFI-loans, the loan contracts of which were signed before the date of this Agreement; (c) any BAFI-loan, unless the Bank shall have authorized withdrawals from the Loan Account for the said Investment Project; (d) any BAFI-loan for an Investment Project costing more than Lei 70 million, unless the Bank's prior consent to such BAFI-loan shall have been obtained; when submitting a BAFI-loan to the Bank for its consent, the Borrower shall furnish to the Bank an application, together with a description of the Loan Beneficiary concerned and an appraisal of the Investment Project concerned, in such form and containing such information as the Bank and the Borrower shall agree, and the proposed terms and conditions of the BAFI-loan; (e) the BAFI-loan under Part B (i) of the Project, unless the Bank shall have been furnished with a detailed investment study of the Investment Project together with the application referred to in paragraph (d) above and the Bank's consent has been obtained for the Investment Project after review of the said study and the operations of selected existing sugar mills in Romania; and (f) any BAFI-loans under Part E of the Project, unless the Bank shall have been furnished with detailed guidelines for grazing control measures and their supervision, and a schedule for training of personnel of entities operating the pastures, for review. - 14 - 4. Each request for withdrawal from the Loan Account in respect of foreign expenditure for any BAFI-loans under the Project will be accompanied by full documentation. 5. Each request for withdrawal from the Loan Account in respect of local expenditures for any BAFI-loans under the Project will be accompanied by a certificate issued by the Borrower by which the Borrower certifies that the disbursement on account of which the withdrawal is requested has been made for an Investment Project duly approved by an authority competent to give such approval under Romanian law and the local expenditures have been incurred in respect of goods, works and services for the said Investment Project. The certificate shall be in such form as shall have been agreed upon between the Bank and the Borrower. 6. If the Bank shall have reasonably determined that the procurement of any item required for the Project and to be procured in accordance with the procedures set forth or referred to in Schedule 4 of this Agreement is inconsistent with such procedures, no expenditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan. - 15 - SCHEDULE 2 Description of the Project The Project is a part of the 1981-85 National Plan for Economic and Social Development of Romania and consists of a 3-year program for the judets (districts) of Neamt, Bacau, Vrancea, Botosani, lasi and Vaslui, to finance the following: Part A: Farm Mechanization Purchase of: (i) about 6,500 tractors of about 45 to 180 horsepower; (ii) about 1,500 harvesters and combine-harvesters; and (iii) related equipment, including trailers, forage havesters, fertilizer and manure spreaders, disk harrows of not less than 55 kilograms per blade, cultivators, ploughs including reversible mold board ploughs for increasing agricultural production. Part B: Agroindustries Construction and equipping of: (i) one sugar mill with a processing capacity of 2,000 tons of sugar-beet per 24 hours; (ii) one flour mill with a processing capacity of about 25 tons of wheat or 25 tons of corn per 24 hours; (iii) one cold store with a capacity of about 3,000 tons, for storing cheese, butter and ice cream; (iv) two grain silos, each with a capacity of between 22,000 and 34,000 tons, for storing maize, wheat and barley; and (v) three flat grain stores with a total capacity of about 25,000 tons. - 16 - Part C: Soil Erosion Control Works Carrying out of works for soil erosion control covering an area of about 142,000 hectares, including construction of terraces, banquet terraces, grassland buffer strips and check structures; and the provision of maintenance equipment for such works. Part D: On Farm Investment Projects for Individual Producers On farm Investment Projects by individual prrducers for purchase of dairy heifers, sheep breeding stock and other goods and materials needed for agricultural production. Part E: Pasture Improvement Works Carrying out of works for the improvement of about 44,000 hectares of pasture, consisting of land clearing construction of access roads and watering points, land preparation, manuring, fertilization and liming, reseeding and oversowing. Part F: Dairy Farms Modernization Modernization and renovation of about 18 existing dairy farms of Agricultural Production Cooperatives for increasing their capacity to an average of about 680 cows and followers. Part G: Vineyards Establishment of about 450 hectares of rainfed vineyards and modernization of about 1,200 hectares of existing vineyards. The Project is expected to be completed by June 30, 1986. - 17 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each February I and August 1 beginning August 1, 1985 through August 1, 1996 3,960,000 On February 1, 1997 3,920,000 * The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal; see General Conditions, Section 3.04. - 18 - Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.04 (b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 2.30% More than three years but not more than six years before maturity 4.65% More than six years but not more than eleven years before maturity 8.50% More than eleven years but not more than thirteen years before maturity 10.05% More than thirteen years before maturity 11.60% - 19 - SCHEDULE 4 Procurement A. International Competitive Bidding 1.A Goods shall be procured under contracts awarded in accordance with procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in March 1977 (hereinafter called the Guidelines), on the basis of international competitive bidding as described in Part A of the Guidelines. 2. For goods to be procured on the basis of international competitive bidding under the Project and in addition to the requirements of paragraph 1.2 of the Guidelines, the Borrower shall prepare and forward to the Bank as soon as possible, and in any event not later than 60 days prior to the date of availability to the public of the first tender, a general procurement notice, in such form and detail and containing such information as the Bank shall reasonably request; the Bank will arrange for the publication of such notice in order to provide timely notification to prospective bidders of the opportunity to bid for the goods in question. The Borrower shall provide the necessary information to update such notice annually so long as any goods remain to be procured on the basis of international competitive bidding. 3. Identical or similar items to be procured for the Project shall be grouped together, whenever practicable, for the purpose of bidding and procurement, and such grouping of items shall be subject to agreement between the Bank and the Borrower. B. Evaluation and Comparison of Bids for Goods; Preference for Domestic Manufacturers 1. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of international competitive bidding: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for imported goods, or the ex-factory price or off-the-shelf price of other goods, offered in such bid; (ii) customs duties and other import taxes levied in connection with the sale or delivery, pursuant to the bid, of the goods shall not be taken into account in the evalua- tion of the bids and (iii) the cost of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be included. - 20 - 2. Goods manufactured in Romania may be granted a margin of preference in accordance with, and subject to, the following provisions: (a) All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the information required to establish the eligibility of a bid for such preference and the following methods and stages that will be followed in the evaluation and comparison of bids. (b) After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in Romania if the bidder shall have established to the satisfaction of the Borrower and the Bank that the manufacturing cost of such goods includes a value added in Romania equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other domestic bids. (3) Group C: bids offering any other goods. (c) In order to determine the lowest evaluated bid of each group, all evaluated bids in each group shall first be compared among themselves, without taking into account customs duties and other import taxes levied in connection with the importation, and sales and similar taxes levied in connection with the sale or delivery, pursuant to the bids, of the goods. Such lowest evaluated bids shall then be compared with each other, and if, as a result of this comparison, a bid from group A or group B is the lowest, it shall be selected for the award. (d) If, as a result of the comparison under paragraph (c) above, the lowest bid is a bid from group C, all group C bids shall be further compared with the lowest evaluated bid from group A after adding to the evaluated bid price of the imported goods offered in each group C bid, for the purpose of this further comparison only, an amount equal to: (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in such group C bid; or (ii) 15% of the c.i.f. bid price of such goods if said customs duties and taxes exceed 15% of such price. If the group A bid in such further comparison is the lowest, it - 21 - shall be selected for the award; if not, the bid from group C which as a result of the comparison under paragraph (c) is the lowest evaluated bid shall be selected. C. Review of Procurement Decisions by the Bank In regard to the goods procured pursuant to paragraph A.1 of this Schedule: (a) Before bids or price quotations are invited, ROMAGRIMEX shall furnish to the Bank, for its comments, the text of the invitations to bid or quote prices and the specifications and, in the case of invitations to bid., 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 Bank shall reasonably request. Any further modi'ication to the bidding documents or the invita- tions to quote prices shall require the Bank's concurrence before it is issued to the prospective bidders or suppliers. (b) Promptly after the bids or price quotations have been received, ROMAGRIMEX shall inform the Bank of the names of the bidders or prospective suppliers and the respective amounts of the bids or prices quoted, and shall indicate those items for which only one bid was received. (c) After bids or price quotations have been evaluated, ROMAGRIMEX shall, before a final decision on the award is made, inform the Bank of the name of the bidder or the supplier to which the contract is intended to be awarded and the reason for the intended award and shall furnish to the Bank, in sufficient time for its review, a detailed report on the evaluation and com- parison of the bids or the price quotations received, together with the recommendations for award and such other information as the Bank shall reasonably request. The Bank shall, if it deter- mines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform ROMAGRIMEX and state the reasons for such determination. (d) The terms and conditions of the contract shall not, without the Bank's concurrence, materially differ from those on which bids or price quotations were asked. (e) Two conformed copies of the contract shall be furnished to the Bank promptly after its execution and prior to the sub- mission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. - 22 - 4. Before agreeing to any material modification or waiver of the terms and conditions of a contract, or granting an exten- sion of the stipulated time for performance of such contract, or issuing any change order under such contract (except in cases of extreme urgency) which would increase the cost of the contract by more than 20% of the original price, ROMAGRIMEX shall inform the Bank of the proposed modification, waiver, extension or change order and the reasons therefor. The Bank, if it determines that the proposal would be inconsistent with the provisions of this Agreement, shall promptly inform ROMAGRIMEX and state the reasons for its determination. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Bank for Reconstruction and Develop- ment. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Bank thereunto this day of LA--, 198 1. FOR SECRETARY