Nicaragua - Rural Sanitation Project : Loan 1495 - Amending Agreement - Conformed

D E NTS LOAN NUMBER 1495 NI Amending Agreement (Rural Sanitation Project) between REPUBLIC OF NICARAGUA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated , 1981 LOAN NUMBER 1495 NI AGREEMENT AGREEMENT, dated (- ,1981, between REPUBLIC OF NICARAGUA (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS by a Loan Agreement (hereinafter called the Loan Agreement) dated February 9, 1978, between the Borrower and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to three million United States dollars ($3,000,000) on the terms and conditions set forth in the Loan Agreement; WHEREAS Decree No. 20, dated July 25, 1979, of the Borrower created INAA - Instituto Nicaragiiense de Acueductos y Alcantarilla- dos, to provide all water supply and sewerage services in Nicaragua; WHEREAS PLANSAR - Plan Nacional de Saneamiento Ambiental Basico Rural, has been replaced by Area de Higiene del Medio (hereinafter called AHM), as the executing unit of the Basic Rural Health Program of the Borrower's Ministry of Health; WHEREAS the Borrower and the Bank have agreed to certain changes in the Loan Agreement, and, for such purpose, have agreed to enter into this Agreement (hereinafter called this Agreement), upon the terms and conditions hereinafter set forth; NOW THEREFORE, it is hereby agreed as follows: ARTICLE I Section 1.01. The Loan Agreement is amended as follows: (a) Section 1.02 (a) shall read as follows: "(a) "Sub-project" means a project included in Part A of the Project to be carried out following the design criteria set forth in Part A of Schedule 5 to this Agreement, and which the Borrower proposes to finance or has financed out of the proceeds of the Loan; and "Approved Sub-project" means a Sub-project, as so defined, which has been approved by the Director of AHM."; -2- (b) Section 1.02 (c) shall read as follows: "(c) "Region" means (i) any of the Regions I, III or VI of the Borrower's terrritory as hereinafter described: Region I consists of the Borrower's Departamentos of Chinandega and Le6n; Region III consists of the Borrower's Departamentos of Rivas, Carazo, Masaya and Granada; and Region VI consists of the Borrower's Departamentos of Boaco, Chontales and Rio San Juan; and any other town or village located in other parts of the Borrower's territory which may be included in the Project by agreement between the Borrower and the Bank."; (c) Section 1.02 (d) shall read as follows: "(d) "Administraci6n" means Direcci6n de Proyectos, an administrative unit of the Borrower's Ministry of Health; and "Regional Office" means each office of AHM responsible for a specific Region."; (d) Section 1.02 (k) si, .1 read as follows: "(k) "Municipality" means any of the Borrower's Munici- pios within any of the Regions."; (e) Add new sub-paragraph (1) to Section 1.02, to read as follows: "(1) "Special Account" means the account to be opened pursuant to Section 2.02 (b) of this Agreement."; (f) Add new sub-paragraphs (b), (c), (d), (e) and (f) to Section 2.02, to read as follows: "(b) The Borrower shall, for the purposes of Part A of the Project, establish and maintain a Special Account in Banco Nacional de Desarrollo (BND) on terms and conditions satisfactory to the Bank. Withdrawals out of the Special Account shall be made exclusively to pay the reasonable local costs of goods and services required to carry out Part A of the Project and to be financed under this Agreement in accordance with the provisions of the table set forth in paragraph 1 of Schedule 1 of this Agreement; (c) The Bank shall, promptly after this Agreement is declared effective, withdraw on behalf of the Borrower from -3- the Loan Account and deposit in the Special Account an initial amount in the currency of the Borrower equivalent to $250,000. Thereafter, at the request of the Borrower, the Bank shall further so withdraw on behalf of the Borrower from the Loan Account and deposit in the Special Account such amounts as shall be required to replenish the Special Account with amounts equal to payments made out of the Special Account for expenditures for Part A of the Project eligible to be financed under this Agreement, but only to the extent that the amount of any such deposit, together with any amount remaining on deposit in the Special Account as of the date of such request, sk.all not exceed in the aggregate the equiva- lent of $250,000. Except as the Bank shall otherwise deter- mine, each such deposit after the initial deposit shall be withdrawn by the Bank on behalf of the Borrower from the Loan Account under the same Categories set forth in the table in paragraph 1 of Schedule 1 to this Agreement, and in the same respective amounts, as have been justified by the evidence supporting the request for such deposit furnished pursuant to paragraph (d) of this Section; (d) Prior to or at the time of each request by the Borrower for a deposit by the Bank on behalf of the Borrower into the Special Account, the Borrower shall furnish to the Bank in respect of each payment made by the Borrower out of the Special Account such documents and other evidence as the Bank shall reasonably request, showing that the payment was made on accounu of the reasonable cost of goods or services required for Part A of the Project and to be financed out of the proceeds of the Loan in accordance with Schedule 1 to this Agreement; (e) If the Bank shall have determined that any payment out of the Special Account (i) was made for any expenditure or in any amount not eligible for financing from the Loan Account, or (ii) was not justified by the evidence furnished pursuant to paragraph (d) of this Section, the Borrower shall, promptly upon notice from the Bank and, unless other- wise determined by the Bank, prior to any further deposit in the Special Account by the Bank, deposit in the Special Account an amount equal to the amount of such payment or the portion thereof not so eligible or justified; and (f) Notwithstanding the provision of paragraph (c) of this Section, no further deposit in the Special Account shall -4- be requested by the Borrower when the Bank shall have deter- mined that all further withdrawals from the Loan Account may be made directly by the Borrower from the Loan Account under paragraph (a) of this Section, or when the total amount withdrawn from the Loan Account plus the amount of any qualified agreement to reimburse made by the Bank and of any special commitment entered into by the Bank pursuant to Section 5.02 of the General Conditions, shall have reached the equivalent of $2,750,000, whichever shall be sooner. Withdrawal from the Loan Account of the remaining amount of the Loan for Part A of the Project shall follow such proce- dures as shall be agreed between the Borrower and the Bank and shall be made only to the extent that the Bank shall be satisfied by the evidence submitted in support of the appli- cations for such withdrawal that all payments by the Borrower out of the Special Account were made on account of the reasonable cost of goods or services required for Part A of the Project and to be financed out of the proceeds of the Loan in accordance with this Agreement."; (g) Section 2.04 shall read as follows: "Section 2.04. The Closing Date shall be December 31, 1983 or such later date as the Bank shall otherwise estab- lish. The Bank shall promptly notify the Borrower of such later date."; (h) Section 3.01 (b) shall read as follows: "(b) Without in any way limiting the generality of paragraph (a) above, the Borrower shall: (i) as and when needed for purposes of the Project, strengthen the accounting and procurement sections of Administraci6n in a manner acceptable to the Bank; and (ii) from time to time, review with the Bank the number of Approved Sub-projects included in Part A of the Project to determine, solely on the basis of the design criteria set forth in Part A of Schedule 5 to this Agreement and of the experience acquired in carrying out Approved Sub-projects under the Project, whether the afore- said number of Appro, 'd Sub-projects may require an adjust- ment.'; (i) Add new sub-paragraphs (c) and (d) to Section 3.01 to read as follows: -5- "(c) The Borrower, through its Miristry of Health, shall enter into contractual arrangements, satisfactory to the Bank, with INAA, providing for: (i) the carrying out of the drilled wells and the water supply systems included in Sections A (1) and A (4) of the Exhibit to Schedule 2 to this Agreement; (ii) the transfer to INAA of the equipment acquired under the Project necessary for the purpose of subparagraph (i) hereof; and (iii) the operation and main- tenance of such water supply systems by INAA after their construction."; "(d) The Borrower shall provide INAA, not later than December 31, 1980, four vehicles and tools and equipment estimated to cost in the aggregate the equivalent of about $70,000 for the carrying out of the Part A of the Project described in Section A (1) and (4) of the Exhibit to Schedule 2 to this Agreement."; (j) Section 3.02 (a) and (b) shall read as follows: "Section 3.02. (a) The Borrower shall, before the commencement of any work to be carried out under each Approved Sub-project, enter into a contract or any other legally binding arrangements satisfactory to the Bank with the Municipality or Cooperative corresponding to the Town where each such Approved Sub-project will be located or with the Cooperative corresponding to the Town or Village where each such Approved Sub-project will be located (each such contract hereinafter called Contrato); (b) Each Contrato shall: (i) be on terms and condi- tions satisfactory to the Bank, and, for such purpose, the Borrower shall furnish the Bank with the model form to be used for each Contrato, and shall introduce such modifica- tions in such form as the Bank shall reasonably request; and (ii) be approved by AHM's Director."; (k) Section 3.03 shall read as follows: "Section 3.03. In order to assist the Borrower in carrying out the Project, the Borrower shall employ, not later than June 30, 1981, consultants in the fields referred to in Part C (2) of the Project. Such consultants' qualifi- cations, experience and terms and conditions of employment shall be satisfactory to the Bank."; -6- (1) Section 5.01 shall read as follows: "Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) an extraordinary situation shall have arisen which shall make it improbable that a Municipality or a Cooperative referred to in Section 3.02 (a) of this Agreement will be able to perform any of its obligations under any contract or other arrangement which it has entered into pursuant to Section 3.02 of this Agreement; and (b) the Borrower or any authority having jurisdiction shall have taken any action for the dissolution or dis- establishment of any Cooperative referred to in Section 3.02 (a) of this Agreement or for the divestment of any of the functions or powers vested in any such Cooperative, Munici- pality or AHM which are necessary for the efficient carrying out and operation and maintenance of any Sub-project."; (m) Section 7.01 shall read as follows: "Section 7.01. The Minister of Health of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. The address of the Borrower in Section 7.02 shall read as follows: Ministerio de Salud P'blica Complejo Civico "Camilo Ortega" Managua, D.N. Nicaragua, C.A. Cable address: SALUBRIDAD Managua, Nicaragua."; (n) Paragraph I of Schedule 1 shall read as follows: -7- "1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the a,-unts of the Loan to each Category and the percent- age 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) Civil works, 950,000, 100% of for- materials and eign expendi- equipment for tures and Approved 85% of local Sub-projects expenditures (Part A of the Project - Sec- tion A (1) through (5) of Exhibit to Schedule 2) (2) Civil works, 1,000,000 100% of for- materials and eign expendi- equipment for tures and Approved 85% of local Sub-projects expenditures (Part A (6) of Exhibit to Schedule 2) (3) Equipment for 320,000 100% of for- Part C of the eign expendi- Project tures (4) Technical Adviser 120,000 100% of for- and Technical eign expendi- Assistance for tures Part C of the Project (5) Salaries of AHM's 230,000 50% educators render- ing services for purposes of Part D of the Project -8- Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (6) Intial deposit in 250,000 Special Account under Section 2.02 (c) to prefinance items under Cate- gories (1) and (2), above (7) Unallocated 130,000 TOTAL 3,000,000"; (o) Part A of Schedule 2: Delete "550" from the second line and substitute therefor "220"; (p) Delete Part B (2) of Schedule 2; (q) Part C of Schedule 2 shall read as follows: "Part C: Strengthening of ARM and INAA by means of: (1) Acquisition and utilization of equipment to be used by AHM and INAA in the execution of the Project, consisting, primarily, of office and communications equipment, tools and jeeps and trucks; and (2) provision of consultants' services in the fields of, inter alia, appropriate latrine technology, water treatment for small communities and implemen- tation of low-cost technical solutions therefor."; (r) The new date for the expected completion of the Project will be June 30, 1983; -9- (s) EXHIBIT to SCHEDULE 2 shall read as follows: "EXHIBIT TO SCHEDULE 2 Different Types of Works for Approved Sub-projects (A) The decision of which of the following types of works will be included in each Sub-project will be made on the basis of the design criteria set forth in Part A of Schedule 5 to this Agreement: (1) building and equipping approximately 30 drilled wells; (2) building and equipping approximately 160 dug wells; (3) improving approximately 20 existing wells (mostly dug wells); (4) building approximately 40 water supply systems of different types, as such types are described in Part A (iv) of Schedule 5 to this Agreement; and (5) building approximately 120 sanitary units (communal facilities for laundry and showers); and (6) building about 12,000 new latrines. (B) The estimated aggregate amount of works included in para- graphs (1) through (6) above are a function of paragaph (A) above and, consequently, may be changed from time to time by agreement between the Bank and AHM's Director; provided, however, that the aggregate number of Approved Sub-projects may be changed only in accordance with Section 3.01 (b) (ii) of this Agreement."; (t) Schedule 4. Delete "$500,000" from the last line of Paragraph B and substitute therefor "$1,500,000"; and Delete the words "by the Technical Adviser" from the fifth line and the words "of the said Technical Adviser" from the seventh line of Paragraph D (1) (b). Delete the words "a report of the Technical Adviser" from the eighth line of Paragraph D (2); - 10 - (u) Schedule 5. Sub-paragraph (ii) of Part A shall read as follows: "(ii) For public stand pipes, the per capita supply will be about 40 liters per capita per day (lcd), and for small supply systems, the per capita supply will be as high as about 100 lcd."; Sub-paragraph (iv) of Part A shall read as follows: "(iv) There will be three types of small water supply systems (used only if they are the least costly solution or the only alternative to manually operated wells) with priority connections to the school or other community buildings. They are: (a) Type A water supply systems, which will include gravity transmission from the water source. It will be used when topographic conditions make it possible. (b) Type B water supply systems, which will be the same as Type A except that storage for 1/2 day demand and minimum water treatment will be added. Type B water supply systems will be used when sources cannot satisfy the diurnal demand. (c) Type C water supply systems, which will be used only when the Town or Village has a population of 500 people or more or where the water levels require mechanical pumping. Such Type C water supply systems will include appropriate water storage and basic distri- bution facilities."; Delete the number "$25" from the next-to-the-last line of sub-paragraph (iv) of Part B and substitute therefor "$38"; and delete the date "1977" from the last line of sub-paragraph (iv) of Part B and substitute therefor "1980"; and (v) Delete the world "PLANSAR" wherever it occurs in the Loan Agreement and substitute therefor "AHM". - 11 - ARTICLE II Section 2.01. This Agreement shall become effective upon receipt by the Bank of an opinion or opinions satisfactory to the Bank of counsel acceptable to the Bank showing that: (a) the person or persons executing and delivering this Agreement are duly authorized to act on behalf of the Borrower for such purpose; and (b) this Agreement has been duly authorized or ratified by, and is legally binding upon, the Borrower, in accordance with its terms. IN WITNESS WHEREOF, the parties hereto, acting through their respective representatives thereunto duly authorized have caused this Agreement to be signed in their respective names, and delivered in the District of Columbia, United States of America, as of the day and year above written. REPUBLIC OF NICARAGUA By Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Regional Vice President Latin America and the Caribbean