Mexico - Second Primary Education Project

<-A/ ',if-7 A Doecot of The World Bank EY)R OFFICIAL USE ONLY RqupRt No P-6208-ME MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN THE AMOUNT EQUIVALENT TO US$412 NILLION TO NACIONAL FINANCIERA, S.N.C. WITH THE GUARANTEE OF THE UNITED MEXICAN STATES FOR A SECOND PRIMARY EDUCATION PROJECT MARCH 11, 1994 MI CROGRAPH ICS Report No: P- 6208 ME Type: MOP This document has a restricted distribution and may be used by recipients only in the perfornce of their official duties. Its contents may not otherwise be disclosed witbout World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = New Peso (N$) US$1.00 - 3.12 New Pesos (Feb. 1993) FISCAL YEAR January 1 - December 31 ACADEMIC YEAR September 1 - June 30 ACRONYMS AND ABBREVIATIONS CAS Country Assistance Strategy CONAFE National Council for Educational Development (Consejo Nacional de Fomento Educativo) LGE General Education Law (Ley General de Educaci6n) NAFIN National Financing Agency (Nacional Financiera, S.N. C.) PARE Bank's first Primary Education Project, Ln. 3407-ME, 1991 (Programa para Abatir el Rezago Educativo) PCU Project Coordinating Unit at the Federal level in CONAFE SEE State Education Entity (State Secretariat of Public Education or equivalent organization) SEP Federal Education Secretariat (Secretaria de Educacion Publica) SPCU Project Coordinating Unit at the State level located in SEEs TAC Technical Advisory Committee  FOR OFFICIAL USE ONLY MEXICO SECOND PRIMARY EDUCATION PROJECT LOAN AND PROJECT SUMMARY Borrower: Nacional Financiera, S.N. C. (NAFIN) Guarantor: United Mexican States Beneficiaries: The Federal Education Secretariat (SEP) through the National Council for Educational Development at SEP (CONAFE) and State Education Entities (SEEs) in primarily 10 Mexican states (Campeche, Durango, Guanajuato, Jalisco, Michoacan, Puebla, San Luis Potosi, Tabasco, Veracruz, and Yucatan). In addition. the four states (Chiapas, Oaxaca, Guerrero, and Hidalgo) assisted under the first Primary Education Project (Loan 3407-ME) will also benefit from the proposed project's Institutional Strengthening Component. Amount: US$412.0 million equivalent. Terms: Repayment in 15 years, including 5 years of grace at the standard variable interest rate. Financing Plan: Local Foreign Total -US$ million- Government 204.7 - 204.7 IBRD 274.4 137.6 412.0 Total Financing 479.1 137.6 616.7 Poverty Category: Program of targeted interventions. Economic Rate of Return: Not applicable Staff Appraisal Report: Report No. 12529-ME; dated March 11, 1994 This document has a restricted distribution and may be used by recipients only in the perforiance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE IBRD TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO NACIONAL FINANCIERA, S.N.C. WITH THE GUARANTEE OF THE UNITED MEXICAN STATES FOR A SECOND PRIMARY EDUCATION PROJECT 1. I submit for your approval the following memorandum and recommendation on a proposed loan to Nacional Financiera, S.N. C. (NAFN) with the guaantee of the United Mexican States for US$412 million eqivalent to help finance a Second Primary Education Project. The loan would be at the Bank's standard variable nterest rate, with a maturity of 15 years, including five years of grace. NAFIN would be the Bontower and the Federal Secrtariat of Education (SEP), the National Council for Educational Development (CONAFE) and the State Education Enitities (SEEs) would be the executing agencies. 2. Backotmund. Over the past seven years, Mexico has consistently implmented highly sccessful economic reform programs involving, inter alia, downsizing and dentalizg the public sector and etensive trade liberdlization. During the period of adjusunent, the Government also implemented a mmiber of progams to alleviate poverty. As a rslt, dte Govenment inrreased spending i the social ors to an estimated 52 percent of central Governme exendiures in 1993, up fron 31 perent in 1987; spending in education, in particular, rose to an esiaed 4.1 peree of GDP in 1993 from a low of 2.6 percet in 1986. The Govemment's poverty alleviation stategy rests strongly on a new emphasis on invesmnets in human capital as a way to redress socioeconomic inequity, targeng persistent sizable pockes of poverty, mairny in nul areas and in the sounem states with large irxgeu populations. TIe low human capital formation among the poor handicaps their participation in the labor foae and enjoyment of the fruis of the contry's anticipatd growth. Besiie equity considerations, invemen in basic education must also address inportant issues of quality and efficieny in the delivery of education services. Qualty and efficiency isses are reflected in students' poor performance and high repetiton and dropout rates. A 1992 study poined out that Mexxan students masered only 53 pert and 30 per of the national core cuniculm m Spanish and mathematics, rsectiveiy. Indpendent esimates place nationwide repetition mbes at 32 peent for the fr gde and asighas s 50 perent in the poorer slaes. e inefy costS are estimated to amont up to 12 pet of total eqendiures in prmary edah o Dropou rates vary from 0.6 pert in Baja Califonia to 13.9 pereent in Chiapas. Every year, about 700,000 Mexican children drop out firm school before conpleting the td grade or achivng ftiona lieacy. Invem s in basic education are now becomn-g even more crucial in the context of Xt North Ameican Free Trade Agreeent, with the couy now facing a demanding peiod of itegrion and compettion with large U.S. and Canadian econiies at a more advanced stage of developmn. 3. Governent Stateg. To address these issues, srng in 1989, the Governmt has implemermed a series of measures to modem educational servies and obtai higher rns on its hiemn in hman resources. The cornrsponding staegy rests on four objectives: (a) improving the quality of education; (b) ing the level of schoolng ghout the population; (c) deializing the system; and (d) engheg community participaton. The quWali of taching will be improved thrugh: (a) upgrading of tachers; (b) updatg of curricula; and (c) provision of high-quality instuctional maerials. The general schooling level will be raised trough: (a) faciloadrg school access to wider population segments; (b) exeding compulsory education to nine years, including the first hee years of secondary educon; and (c) incasing stdens' retenion and their learnig achievments. The e tiorl system was decentralized to the states in 1992; in 1993, a natioral teaching caer progm was insttted, and the General Education Law (GE) was passed to address not only the stuctural framework of the system, but also its c lar contents, the reevahlation of teacers' role, the pariipaon of society in the system, and the nrmative and compensaty role of the feeral Goverment Comumity participation will be enanced thraogh a reorgaization of the education system to involve tears, parets, stldens, education  - 2 - authorities, and community members and leaders to contribute more to the decision-making process and to improve the quality and efficiency of primary education. 4. To tackle isses of poverty reduction head on, the Government is committed to a wide range of social compensatory programs for the couty's most disadvantaged populations by transferring more finamial and technical resources to these population groups. In education, this compensatory strategy includes a new emphasis on basic education (which benefits the poor the most), indigenous education programs, and targeed initial and prmary education projects in the poorest states, with finanrial and technical assistance from the Bank (pam. 6). Additionally, the Govenmient is studying the possibility of investment m preschool education, which also would benefit the poor the most due to anticipatd long-term benefits in school readiess and other social reums. The proposed project would follow up and expand on the first Primary Education Project ("PARE", Ln. 3407-ME). The Government has isWed a satisfactory sector policy statement in the context of the proposed project 5. Raionale for Bank Involvmet. This operation is consistent with the Baik's Country Assistance Strategy (CAS) for Mexico presented to the Board on June 24, 1993, which highlighted the Bank's strg to assist the Government to keep te economic resimulunng process firmly on tack, while supportg programs that contribute to long-tern suinable economic growth and developmen; paricularly thogh irivesimes human rsm s, infiwasnucture, and natral res managwement he tegy also aims at moving the reform process downward to the subnational (state and municipal) level and spport the furter devolttion of expemire and revenue responsibilities to hse local goverments. 6. The Bank, being the single most important source of external financing for the prmy education sector in the country, is in a unique posiion to play a catalyfic role in the human resources sector. It can assist the Government in (a) increasing inveses and addressing critical issues of quality, efficiency, and equity in basic education; and (b) focwsng on the most disadvantaged states and areas. In the 1990s, fr Govemnt reqsted mnajor Bank support for investments in basic education, involving the Bank closely in policy and progrm development in the umatn resources sector in general and in basic education in paricular. The 1991 PARE arx the 1992 a Education Prjet (am. 3518-ME), cunently urder implementation, seek to mxrease education qualit tugh a variety of targeted intventons in the sEs with the worst educational dicators. The proposed project follows up these Bank-finanoed basic education projects, iworang lessons leaned from implemnon experiences. It replicates successful project design to other educationally disadvantaged states in the central and soen areas of MIexio. The proposed project would also complement a set of Bank-finnced projects aming at poverty alleviation, targeting maily on the counry's poorest states and covering the areas of basic health (Ln 3272-ME, 1990), low-income housing (aI 3140-ME, 1990), tccal traming (La 3358-ME, 1991), deentralization and regional development (i 3310-ME, 1991), water supply and saniation U. 3271-ME, 1991), and labor market and pouivity enhancement (LU 3542-ME, 1992). 7. Project Obje1dves. ITh project would improve primary school students' academc achievement levels and reduce the high repetition and droot rates in ten of the cutry's poorest states. It will also contribute to raising the human capial level, redressig sonme of the cutry's social and econmic imblanc as part of the Govment's social compestory program. Thse objectives would be achieved through: (a) tnmmg teachers and administrs; (b) providing classroom-tested educational materials for both teachers and shtues, including specific materials for ixgenous popuations; and (c) strengteig t institional capacity of the education system. partiy at the state level, to carry out its mandate within a decentralized system. Ihe project would futer benefit the four stats beig assisted under the fi Primary Eduatio Project by including their senor-level officials under the projet's nmrgent twaiig program.  - 3 - 8. Project Desaiption. The project consists of dte major componw. Ihe Huma Reources Development Component (17.5 percent of total project cost) would provide in-service taining and assistance to ugrade the skills of pmaWy school teachers, principals, supervisors, emphasizing the role of prmiipals, and spervirs in providing pedagogxal assistance to teachers in classroom teaching. lbe Educatonal MaIerial Reources Component (52.5 percent of total project costs) would: (a) provide edional matrials for both teachers and sudents; (b) supply clssom lhly and refeme books ("Rdng Comers") and promnote their use; (c) design and deliver bilingual textbooks and reading materials for indigemus schools; and (d) rehabilitate, replace, or build urgenty needed educational facilities. The hinstitutioal Sbbengthening Component (30.0 percent of total project costs) would: (a) stengien amion manm en capacity at both central and stte levels by (i) providig management training for plaming and policy analysis, (i) upgrding the monitoring, evahlation, and informaion systems, (iii) conducting eduaton studies to prea futur investments at the preschool and secondary education levels, and (iv) supporting project pronotion aid diffusion mechamsm; (b) provide itcentives for teachers to work in rneote, indgenous, or harhp areas on a declning basis; (c) mrove the supervision system; and (d) streng the textbooks and naterials disution system. 9. Project Cost and Ehiadng. Ihe total project cost, inudidig physical and prie contingencies and taxes, is estimated at US$616.7 million equivalent of which about US$137.6 milion would be foreign exchange; taxes amount to about US$44.3 million. lhe proposed loan of US$412.0 million would finance 72 percet of project costs, net of taxes and duties. The loan would finance 100 percent of foreign excange expeitures and 57 pement of local expiures. Such levels of local cost fnancinrg are justfied under the project due to the highiy trgeted nature of project activities (rural cmmunit of difficult access unlikely to attract any international bidding ierest) anid to the signiScant portion of invesment funds going direly to local residents (through communiy participation civil works, iignous edaional materials, incentives for teachers and others, etc.). Reroactive fnncing of up to US$6.0 million equialent (one percent of project costs) would be provided to help cover eligible strt-up experK ' s for tecical assistance, mosty for technical input and bidding specnications for educational n nrials and civil works and for edaion stdies, made on or after October 31, 1993. A bralkdown of costs and financing plan are shoown in Schedule A. Amn and methods of procurement and disbur nt and the diursement schedule are shown in Schle B. A timetable of key project processing evets and the Ms of Bank Group operations in Mexico are given in Scheles C and D, respectively. The Staff Appiaisal Report No. 12529-ME, dated March 11, 1994 is also atached. 10. Project l enion. Overall autrity for project mangemet would be vested in CONAFE, which has good expence with Bank education projects and whose involvement has been cncial in the preparation of the proposed project, assisted by a Project Coordinating Unit (PCM). The PCU would be assisted by a techmcal suppot staff, which would be orgazed along state-by-state responsibilities, and by extemal consulns. Technical Advisory Committees (TACs) would be established at both central and state levels to help the PCU and Stae Project Coordinatg Units (SPCUs) in sewring necessary suport and cooperation from all SEP and SEE sectors and frm other institutions involved in pnrject activities. At the state level, SPCUs wold hve the responsibility for canying out the project. SPCUs would be rsonsible for coordinating activities of all participating agencies and monitoring project implementation at the st level, with special emphasis on (a) implementation of civil works progrms including contratg; (b) imely acqisition ar1d disntion of educational matials; (c) proper functioning of the supervision system; (d) implementation and monitoring of the teacher incentives pgram; and (e) technical assistance to communities in school rehabilitaon and maintnane. 11. Project Sustainability. The prject's large taining comrponets for teachers, administrators, and maae would ensre that benefits would coinue to accnre beyond the project life. lhe instiutional strengtening compont would bave lasing positive effects on the ability of SEEs to operate a  - 4 - de alized educaton system. Conmunties would be orgad to forn School Councils and trair to cary out urm ig ses of conrucion, maintenance, and o project-rlaed activities, thus enhaning ownrship and sustinabiliy of project achievemenet. Inental r nt costs for participat stes for the last year of f(e project are estimaed to be less than one pert of the education budget transferred to ten in 1993, a .vel easily absorbable once project finaning cases. 12. Lmons F Previous Bank nvivenmet. Early implemertion experience under PARE has provided valuable lessons for the design of the proposed project. Targetn was camied furter to corcente project activities on the poorest comnites whin the stes. Positive experience with teacher traing would be replicated, with added imovemert tugh the introduction of pedagogical advisoxy responsililities to the role of superv s. he package of Readg Corners nmrials (a proven Mexican progam supported under PARE) would be augmerted wih reference books for teacher's and books with regional cotent. A higy paised participatory approach to designing indigenous textbooks and materials was ustd under PARE and would be corinued under the proposed project. Anor participatory approach would be the close involvement of local communte in the constuction and maineac of school facilities. Deficiencies idertified in manaemt caacity at the SEEs would be medied throgh exensive tang of mangeri perl and the early development of a project managemen information system (MIS) and a process evaluation system. Ihe constwtion and use of warehoses for book and mterials distribution under PARE udecor the need to resolve lon xing distibton boffleneks from regional waros to the schools, especially in the poorer states; this has been medied by involving participatn sates in the preparation of indvidual state disiuon and invetory control systems based on their needs. 13. Actis Agreed. During negoiions, the Governmnt confirmed agreemen or provided assurances: (a) that constcon of new schols or classoms would take place only after presention of evidence that (i) lard is available for civil works, Cu) teachers and corresponding budgetary allocations are available, and (iii) local School Cuncils have been formed; (b) that the list of hifiastr e subprojects for the coming year would be presented for Bank review by October 31 of each year, staring in 1994 (with a special ex-ante review in August 1994 of civil works to be camied out in 1994), and that all irastructure ojects would be camed ot acco to a satsactory Operationl Minual; (c) that ft project MIS and the process evaation system would be fully opeational by Decenber 31, 1994; (d) on the list of schools where teacher incetives would be granted for the firt year, and that such list would be reviewed ex-ante with the Bank annally; (e) on the stffing plan and terms of reference for key persorml in the PCLJ and SPCUs and of the TA Cs; () on the fial form and content of particiaion agreemes, including technical annexes; (g) aw the Bank, in conlion with dhe Government, would be able to suspend d iursmen to non-performing states; (h) iat SEP/CONAFE and SEEs will conduct, joindy with and under terms of refernce satisf y to the Bank (i) amual implemetion reviews by October 31 of each year, strting in 1995 and (ii) a mid-term review in October 1996; and (i) that the Govenment 'Will review with the Bank the proess in the compersatory Basic Fdcahtion Progam and in the allocation of federal and state budget resources during the anal ad mid-tem reviews, with a view toward inervasirg de project stats' share of pmay education resources. Conditins of loan effectivens would be that the Governmnit will present saifactory to the Bank: (a) a finalized Operational Mamual for school fiastucte, a handbook for self-help construction, and a handbok for building and fiure maintnance; (b) evidence a the PCU is staffed adequately; and (c) evidence of signed parficipation agements with at least four states and that the respective SPCUs therein have been adequaely staffed. Conditions of disbursmen are the the Governmnt would present, satisfactory to the Bank: (a) for school ifatre, terms of reference for technical suprvision of conxuction/rehabilitation, and (b) for each project state, (i) sigred participation agrements and (ii) evidence that SPCUs have been staffed. 14. Invhronental Aspects. Ihe project would bave an inlirect positive impact on the environment through the inlusion of envirnenal concerns in the updated educational mterials and teacher tranng adivitL ani thrrMlPh q 4h11v nn e.ietinn nni tlkp Pnviuinnn%-nt Th% nn;t ;c Aaecc-i6 or- r'  - 5 - 15. Poverty Category. The project would suppoit a progran of targeted itrvendons. The project would support the national policy of alleviating regional ethnic and iucome disparities in education. Interventions would be targeted not only to ten of the poorest states but also to the poorest communities therein. The proposed project and PARE together would cover the 14 poorest states (out of a total of 32 states). Most urban areas witmin the selected regions have been excluded. 16. Project Benefis. By raising children's cognitive achievement as well as their probability of completing the primary education cycle, the project benefits would consist of a higher rate of humnan capital accumulation, cotributing to economic development. Due to the project's targe.ed naure, project benefits would also inlude a more equal distribution of economic opportunities among Mexican children, especially for underserved indigenous populations. The project would improve the quality of priary education thrugh in-service training of teacher and administrtrs and enhance the systm's efficiency through investments in instituo strengthening, thus contributing to beter allocation and mirsed productvity of human resources in the sector and helping meet the challenges of a recenly decetaled education system. Alwgehr, benefits would accrue to approximately 1.5 million children, 53,000 teachers, and 1,140 administrators. Because half of the stuents would be girls, bemfits of education would also hxchrde (as researeh has demonstated) lower fertlity and iproved health status and educatonal atainmwent of tbeir children. 17. Riks. 1he main project risks lie in the complexity of the implemention an agem among a relatively large rumber of isuions and enies within a still-evolving decentralization process. More specifically, risks are associated with possible delays in project execuion due to the slow imptovement of insdtitional capacity of implentng agents at the state and, where applicable, ommunity levels. To mitgate risks asocitd with lack of inter-iNsttuonal coonlinaion, TACs composed of epretatives of the various implemenon agents would be formed at both central and state levels to ensure adequate cmmuication and cooperation. he risk of weak intutional capacities is addssed under the project through techical assistance in key amas of management such as plang, inforatio, and evabation. The project would benefit from CONAFE's experieaee at the central level, which is cunty implmenting PARE as well as the Initial Education Project and would easily transr successfl opetionl experie as well as familirity widt Bank processes to the prposed project. At the state level, SEEs would have had two years of operatg a decentalzd educationl system by the project's ant effectivernss. At the local level, partipaton of School Councils would be phased in to allow for ate training and adaptaon of eperienee from sinilar oraizations already operating in different sectrs and supported by Bank-finaued projects. The risks identified during eaily project preparation posed by the disparity in salaies for federal and state tachers (who now all belong to the state system) have been pracally elimnated: sbries have been leveled in all but three of the parti states, and these three states are sciduled to complete this proess in 1994. 18. Recommendation. I am satisfied that the proposed loan would comply with the Articles of Agrnent of the Bank and ommeix that the Eeuve Diectors appove i. Lewis T. Preston Preiseft Aaachments Washington, D.C. March 11, 1994  -6- Schedule A Page 1 of 1 MEXICO SECOND PRIMARY EDUCATION PROJECT PROJECT COST SUMMARY Local Foreign Total ---US$ million--- Human Resources Development 99.8 2.6 102.4 Educational Material Resources Teaching Materials & Student Packages 85.6 85.6 171.2 Reading Corners 4.8 2.1 6.9 Indigenous Education 3.9 2.0 5.9 Infrastructure Improvement 93.8 24.7 118.5 188.1 114.4 302.5 Institutional Strengthening Management Capacity 11.6 5.3 16.9 Teacher Incentives 97.5 0.0 97.5 Improvement of Supervision System 16.6 3.4 20.0 Books & Materials Distribution System 7.6 2.8 10.4 Project Administration 26.6 1.0 27.6 159.9 12.5 172.4 BASE COST 447.8 129.5 577.3 Physical Contingencies 5.0 1.4 6.4 Price Contingencies 26.3 6.7 33.0 TOTAL PROJECT COST1' 479.1 1 616.7 FINANCING PLAN Local Foreign Total US$ million Federal Government 204.7 0.0 204.7 IBRD 274.4 137.6 412.0 Total 478.1 138.6 616.7 1' Includes taxes and duties estimated at about US$44.3 million.  -7- Schedule B Page 1 of 2 MEXICO SECOND PRIMARY EDUCATION PROJECT PROCUREMENT METHODS BY CATEGORY (in US$ million) Non-Bank Category ICB LCB Other Financed Total Civil Works (CAPFCE) -- 43.0 30.0 -- 51.9 (21.5) (15.0) (26.0) Civil Works (community) -- -- 53.2A' -- 74.3 (26.6) (37.1) Equipment and Furniture 3.2 3.5 6.7' -- 13.4 (3.2) (3.2) (6.1) (12.5) Vehicles -- - -- 3.1 3.1 (0.0) (0.0) Education Books & Didactic 70.0 6.0 9.2DLcI -- 85.2 Materials (63.0) (5.4) (8.3) (76 7) Student Educational Packages 80.0 13.0 12.7h' -- 105.7 (40.0) (6.5) (6.3) (52.8) Training -- -- 106.3 -- 106.3 (106.3) (106.3) Training Materials -- 1.3 0.4 -- 1.7 (1.3) (0.4) (1.7) Technical Assistance & Studies -- -- 6.7 -- 6.7 (6.7) (6.7) Teacher and Supervisor Incentives, -- -- 168.44' 168.4 Incremental Salaries & Other (92.2) (92.2) Operating Costs Total 153.2 66.8 393.6 3.1 616.7 (106.2) (37.9) (267.9) (0.0) (412.0) Note: Figures in parentheses are amounts estimated to be financed by the Bank. al Direct contracting with communities or local contractors. b' To be procured through shopping. C/ Includes US$6.1 million of direct contracting for proprietary materials. d/ Includes US$14.9 millio X of direct contracting for maintenance recnrrent costs.  -8 - Schedule B Page 2 of 2 MEXICO :.COND PRIMARY EDUCATION PROJECT DISBURSEMENTS WITHDRAWALS OF THE PROCEEDS OF THE LOAN Amount of the Category Loan Allocated Percent of Expenditures (expressed In US$ to be financed million equivalent) -_-_--- 1. Civil Works CAPFCE 32.0 50% Community Model 24.0 50% 2. Equipment and Furniture 8.0 100% of foreign expenditures & 90% of local expenditures 3. Educational Books & Didactic 70.0 90% Materials 4. Student Educational Packages 50.0 75% of expenditures to an aggregate of US$25 (non-durable goods) inillion; 50% of expenditures to an aggregate of US$45 million; and 25% for the remainder S. Training Teacher Training 95.0 100% Management Training 1.8 100% Training Materials 1.7 100% 6. Technical Assistance & Studies 6.7 100% 7. Teacher Incentives & Support 55.3 75% of expenditures to an aggregate of US$20 to Supervisors million; 50% of expenditures to an aggregate of US$50 million; and 25% for the remainder 8. Incremental Operating Costs 27.5 75% of expenditures to an aggregate of US$15 (salaries, travel allowances, million; 50% of expenditures to an aggregate of operation & maintenance, US$25 million; and 25 % for the remainder office supplies & materials) 9. Unallocated 40.0 Total 412.0 ESTIMATED DISBURSEMENTS SCHEDULE EBRD F1scal Year 1994 1995 1996 1997 1998 1999 Annual 30.0-Y 52.0 88.0 112.0 80.0 50.0 Cumulative 30.0 82.0 170.0 282.0 362.0 412.0 1' Includes Special Account deposit of US$25.0 million and retroactive financing of up to US$6.0 million for eligible expenditures incurred on or after October 31, 1993.  -9- Schedule C MEXICO SECOND PRIMARY EDUCATION PROJECT TIMETABLE OF KEY PROJECT PROCESSING EVENTS (a) Time taken to piepare Nine months (b) Prepared by Secretary of Education (SEP) (c) First Bank mission March 1993 (d) Appraisal mission departure November 1993 (e) Negotiations March 1994 (f) Planned date of effectiveness June 1994 (g) List of relevant PCRs and PPARs Not applicable  - 10- Schedule D Page 1 of 3 STATUS OF BANK GROUP OPERATIONS IN MEXICO As of December 31, 1993 CredLt/ Fiscal Borrower Purpose Amount in US$ Million Loan No. Year (less cancellation) Bank IDA Undisbursed 106 loans fully disbursed 13,014.72 Of which SECALs. SALs, Program Loans, and Interest Support ; Ln. 19h9-ME 1981 BANOBRAS Railway IV 149.88 Ln. 2331-ME 1983 BANCOMEXT Export Development 349.33 Ln. 2882-ME 1988 BANCOMEXT Trade Policy Loan 11 500.00 Ln. 2918-ME 1988 NAFIN Agricultural Sector Loan 300.00 Ln. 3159-ME 1990 BANCOMEXT Interest Support Loan 1,260.-O Ln. 3207-ME 1990 BANOBRAS Road Transport & Telecom. 380.00 Ln. 3087-ME 1989 NAFIN Industrial Sector Policy 497.51 Ln. 2745-ME 1987 BANCOMEXT Trade Policy Loan 1 498.63 Ln. 3086-ME 1989 NAFIN Public Enterprise Reform 499.39 Ln. 2777-ME 1987 BANCOMEXT Export Development 11 246.37 Ln. 2919-ME 1988 NAFIN Fertilizer Sector 240.20 Subtotal 4,921.31 Ln. 2526-ME 1985 NAFIN Chiapas Agricultural Dev. 58.00 4.61 Ln. 2575-ME 1985 BANOBRAS Railways V 300.00 3.28 Ln. 2658-ME 1986 NAFIN Agricultural Dev. Proderith 11 88.30 41.10 Ln. 2666-ME 1986 BANOBRAS Municipal Strengthening 40.00 17.34 Ln. 2669-ME 1986 BANOBRAS Solid Waste Management Pilot 25.00 11.27 Ln. 2824-ME 1987 BANOBRAS Urban Transport 90.98 26.64 Ln. 2858-ME 1987 NAFIN Small/Medium-Scale Industry IV 100.00 20.42 Ln. 2875-ME 1987 BANOBRAS Highway Maintenance 135.00 2.78 Ln. 2916-ME 1988 NAFIN Steel Sector Restructuring 321.01 70.13 Ln. 2946-ME 1988 BANOBRAS Ports Rehabilitation 50.00 4.17 Ln. 3047-ME* 1989 NAFIN Industrial Restructuring 250.00 44.35 Ln. 3083-ME 1989 NAFIN Hydroelectric Development 460.00 106.43 Ln. 3085-ME* 1989 BANOCOMEXT Financial Sector Adjustment 487.14 1.19 Ln. 3115-ME 1990 NAFIN Forestry Development 45.50 36.66 Ln. 3140-ME 1990 BANOBRAS Low-Income Housing 11 350.00 55.79 Ln. 3141-ME 1990 NAFIN Agricultural Marketing ll 100.00 0.49 Ln. 3189-ME 1990 NAFIN Transmission & Distribution 450.00 111.98 Ln. 3208-ME 1990 BANOBRAS Telecomm. Technical Assistance 22.00 6.79 Ln. 3271-ME 1991 BANOBRAS Water Supply & Sanitation 300.00 21.27 Ln. 3272-ME 1991 NAFIN Basic Health Care 180.00 105.95 Ln. 3310-ME 1991 NAFIN Decentralization& Regional Develop. 350.00 121.55 Ln. 3357-ME* 1991 NAFIN Agricultural Sector Adj. 11 400.00 15.89 Ln. 3358-ME 1991 NAFIN Technical Training III 152.00 105.93 Ln. 3359-ME 1991 NAFIN Mining Se.tor Restructuring 200.00 117.85 Ln. 3407-ME 1992 NAFIN Primary Education 250.00 150.57 Ln. 3419-ME 1992 NAFIN Irrigation & Drainage Sector 400.00 239.23 Ln. 3461-ME 1992 BANOBRAS Environmental 50.00 37.84 Ln. 3465-ME 1992 NAFIN Agricultural Technology 150.00 141.34 Ln. 3475-ME 1992 NAFIN Science & Technology Infrastructure 189.00 168.65 Ln. 3497-ME 1992 BANOBRAS Housing Market Development 450.00 236.83 Ln. 3518-ME 1993 NAFIN Initial Education 80.00 71.98 Ln. 3542-ME 1993 NAFIN Labor Market & Prod. Enhancement 174.00 151.50 Ln. 3543-ME b 1993 NAFIN Transport Air Pollution Control 220.00 220.00 Ln. 3559-MF' 1993 BANOBRAS Medium Cities Transport 200.00 200.00 Ln. 3628-ME 1993 BANOBRAS Highway Rehab. & Trat'tic Satetv 480.00 454.89 Total 20,612.65 3,126.69 Of which has been repaid 6,317.81 Total now held by the Bank 14,294.84 Amount sold: 92.34 Of which has been repaid: 92.34 Total Undisbursed 3,510.86 3,510.86 ! Approved during or after FY80 b/ Not yet effective * SAL, SECAL. or Program Loan  - 11 - Schedule D Page 2 of 3 STATEMENT OF IFC INVESTMENTS IN MEXICO As of December 31, 1993 Original Gross Commitments Undis- Fiscal Year Held by Held by bursed Committed Company Type of Business IFC Partici- IFC Partici- (Including Loan Equity pants Total pants Partici- pants) 1958/59 Industrias Perfect Circle, SA /a Indastrial Equipment 0.80 - 0.80 - - 1958 Bristol de Mexico, SA /a Aircraft Engine Overhaul 0.52 - - 0.52 - - - 1961 Aceros Solar, SA /a . Twist Drills - 0.28 0.28 196215/618 Fundidora Monterrey, SA /a Steel 2.30 21.44 - 23.74 * * - 1963 Tubos de Acero de Mexico Stainless Steel Pipes 0.71 0.10 0.19 1.00 1963 Quimica del Rey, SA /a Sodium Sulphate 0.07 - 0.68 0.75 1964/66 Industria del Hierro, SA Construction Equipment - 1.96 - 1.96 1970 Minera del Norte /a Iron Ore Mining 0.75 - 0.75 1.50 1971 Celanese Mexicana, SA /a Textiles 8.00 4.00 12.00 1972 Promotora Papel Per., SA de CV /a Pulp & Paper /b - 0.03 0.03 1973/79 Cementos Veracruz, SA /a Cement 11.35 - 4.50 15.85 1974/81 Cancun Aristos Hotel /a Tourism 1.00 0.30 - 1.30 1975n8 Mexinox, SA /a Stainless Steel 12.00 3.18 15.18 - - 1978/81/84 Papeles Ponderosa, SA /a Pulp & Paper 6.16 5.00 4.50 15.66 1978 Tereftalatos Mexicanos, SA /a Petrochemicals 19.00 - - 19.00 1979/81/87 Hotel Camino Real Ixtapa, SA Tourism - 4.20 - 4.20 4.20 1979/84 Empresas Tolteca, SA /a Cement 30.00 7.95 138.00 175.95 1979 Conductores Monterrey, SA Electrical Wire & Cable 8.41 - 13.00 21.41 2.56 1980 Industrias Resistol, SA /a Particle Board 8.00 - 17.00 25.00 - 1980 Vidrio Plano de Mexico, SA Flat Glass 15.00 - 99.90 114.90 0.90 1980 Minera Real de Angeles, SA /a Mining 30.00 - 80.00 110.00 - 1981/86 Celulosicos Centauro, SA /a Pulp & Paper 15.50 - 44.00 59.50 1981 Corporacion Agroindustrial, SA Agribusiness 6.30 3.00 5.00 14.30 1984 Capital Goods Facility /a Capital Goods Financing 34.00 66.00 100.00 - 1984/88 Metalsa, SA Auto Chassis 8.00 1.40 - 9.40 1.88 1985 Proteison, SA de CV /a Agribusiness 2.00 0.77 - 2.77 - - 1985 Prom. Industriales Mexicanas, SA Petrochemicals 32.00 - 4.40 36.40 16.10 1986/88 Celul. y Papel/Durango, SA de CV Pulp & Paper 10.00 3.07 - 13.07 13.06 1987 Agromex (AESA) /a Veg. & Fruit Processing 1.50 0.50 - 2.00 - 1989 Cicasa Constr. Guar. Fac /a Cons't. Guarantee Facility 20.00 - 20.00 1987 Industrias Sulfamex, SA de CV a/ Chem. & Petrochemicals 2.00 0.50 - 2.50 - 1988 Sealed Power de Mexico Auto Assembly 9.00 - - 9.00 2.25 1988 Crescent Market Aggregates Construction Materials 73.00 - - 73.00 48.23 1988 Apasco, SA de CV Cement & Const. Matls. 46.00 - 46.00 20.08 1991/92/93 Apasco, SA de CV /c Cement & Const. Matls. 49.91 - - 49.91 10.00 - - 1994 Apasco, SA de CV /c Cement & Const. Matls. 10.00 - 40.00 50.00 10.00 40.00 40.00 1988 Sigma Alim., SA de CV (Salumi) Food & Food Processing 20.96 2.00 - 22.96 5.00 - - 1989/92 Polimar (ABS), SA de CV Petrochemicals 19.10 - - 19.10 12.49 1989 Grupo Femsa/Visa Consumer Goods 80.00 27.60 107.60 79.08 1989 Banca Serfin Development Finance 60.00 - 60.00 56.00 1989 Cementos Mexicanos Cement & Const. Mat 60.00 - 8.00 68.00 15.71 - 1990/91 Condumex, SA de CV /c Electromanufacturing 35.00 9.54 18.00 62.54 30.63 14.40 1990 Indelpro, SA de CV Petrochemicals 27.00 3.00 30.00 27.00 2.25 - 1990 Banco Nacionat de Mexico Development Pinance 60.00 - - 60.00 44.82 7.50 2.40 1990 Bancomer Credit Line Development Finance 20.00 - - 20.00 17.33 1991 Mexico Fund /a Money & Capital Markets - - 6.57 6.57 - 1991 Petrocel, SA Chem. & Petrochemicals 32.00 - - 32.00 32.00 1991 Vitro Flotado, SA de CV Glass & Related Mnftg. 25.00 - 101.00 126.00 25.00 88.38 1991 Vitro, SA Glass & Related Mnftg. - 10.17 8.04 18.21 10.17 - 1992 Celular de Telefonia, SA de CV Telecommunications 15.00 1.00 37.00 53.00 16.00 37.00 4.00 1992 Grupo Indust. Bimbo, SA de CV Bakery 25.00 - 75.00 100.00 25.00 75.00 1992 Aislantes Leon, SA de CV Battery Manufacturing 10.00 7.03 - 17.03 10.00 1992/93 Grupo Posadas, SA de CV Tourism 20.00 - 37.22 57.22 20.00 33.50 1992 Grupo Financ. Probursa, SA de CV Development Finance 7.50 - 7.50 7.50 - 1992 Banco Mercantil del Norte, S.N.C. Development Finance 20.00 - - 20.00 20.00 10.30  - 12 - Schedule D Page 3 of 3 Original Gross Commitments Undis- Fiscal Year TyefusrsicCP Held by Held by bursed Committed Company Type of Business fE a~c.IFC Partici- (Including Loan Equity pants Total pants Partici- pants) 1992 Mexico City Toluca Toll Road Transport & Storage 13.75 * 13.75 9.76 - 1993 Masterpak, SA de CV Textiles/Packaging 12.00 - 28.00 40.00 12.00 - 2.00 1993 Celulosa y Derivados. SA de CV Textiles/Packaging 11.00 26.00 37.00 11.00 1.00 1993/94 Grupo Operador de Terninales Industrial Services 4.00 2.00 6.00 12.00 6.00 2.24 Maritimas, SA (GOTM) 1994 Gidesa Chem. & Petrochemicals 15.00 8.00 42.50 65.50 23.00 42.50 57.50 1994 Aurum Heller Financial Services 0.98 0.98 0.98 - Total Gross Commitments /d 1058.09 129.21 918.52 2105.82 Less: Cancellations. Terminations, Repayment, & Sales 471.36 70.23 577.99 1,119.58 Net Commitments Now Heid e/ * 586.733 58.986 340.53 986.245 645.719 340.525 119.44 Pending Commnitments: Indelpro, SA de CV III Chem. & Petrochemicals 4.00 - 6.00 10.00 Telecom Golfo Infrastructure 0.74 8.26 18.00 27.00 Kapta Development Finance 9.85 9.85 Bancomer Mgt. Development Finance - 0.15 0.15 Metalsa III Auto Chassis 18.00 6.00 24.00 48.00 .CTAPV Infrastructure 5.00 2.00 7.00 Total Commitment Held and Pending Commitments 614.473 85.246 388.53 1088.24 Total Undisbursed Commitments 43.5764 0 75.864 119.44 a/ Investments which have been fully cancelled, terminated, written-off, sold, redeemed, or repaid. bi US$25,000. c/ Excludes placements of $30.0 million (Apasco), $20.0 million (Vitro), and $19.8 million (Condumex) d/ Consists of approved and signed projects (including underwriting, but excluding swap transactions i.e., Banca Serfin US6.5 million, Indelpro $6.0 million, Banamex $40.0 million and Grupo Posadas II $6.5 million). e/ Held Commitments consist of disbursed and undisbursed investments.  - 13 - [MAP]  [ORD 25451 \ E (' \' ~~~~~~~~~~~~~~~~~~~~UNITED STATES OF AMERICA SEXCON PRM Y ) / p \- \ \* =' Cd J'4;;>r ~~~~~~~~EDUCATION PROJECT \ '\Vi i .S) wHermxiilo \ _, ' ~~~~~~~~~~~~~~~~~~~^Vj Cd.AeulbOE PROJECT'iTATES:~~~~~~PRJEC STTB , 0 X t ! XChihuqhuo Q ^ \t ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ALL COMPONENT$ t --R D t _ucymos t <u PMiu \ {RRST PRIMARY l0UC^TION PROJECT STATeS)~~~~~~~~~~~~RRS PWAR EWAMO PRECTSTAES v t3t'4zb twObrwon ~~~~~~~~~~~~~~~~~~~~~~~Nuefiom N