Bolivia - Environmental Technical Assistance Project : Credit 2443 - Credit Agreement - Conformed

CREDIT NUMR 4 3 B0 Development Credit Agreement (Environmental Technical Assistance Project) between REPUBLIC OF BOLIVIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated K2J , 1992 CREDIT NUMBERc;4/43BO DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated 9 '-- ee -- c>2/, 1992, between REPUBLIC OF BOLIVIA (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS the Borrower, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Association to assist in the financing of the Project; WHEREAS the Association has agreed, on the basis, inter alia, of the foregoing, to extend the Credit to the Borrower upon the terms and conditions set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Development Credit Agreements" of the Association, dated January 1, 1985, with the last sentence of Section 3.02 deleted (the General Conditions) constitute an integral part of this Agreement. Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "ASEO" means Asociaci6n Ecol6gica del Oriente, an NGO (as defined below) operating in Bolivia; (b) "Central Bank" means the Borrower's Banco Central de Bolivia; (c) "CIEC" means Centro Interdisciplinario de Estudios Comunitarios, an NGO (as defined below) operating in Bolivia; (d) "CIEC Cooperation Agreement" means the agreement to be entered into between the Borrower and CIEC pursuant to Section 3.01 (c) (i) of this Agreement as the same may be amended from time to time; - 2 - (e) "Civil Service Ref orm Program" means the Borrower's program designed to improve its public administration as described in the Borrower's document entitled Programa de Reforma administrativa en Bolivia dated August 1992; (f) "ECC Cooperation Agreement" means the agreement to be entered into between the Borrower and the ECC (as defined below) pursuant to Section 3.01 (c) (iii) of this Agreement as the same may be amended from time to time; (g) "Environmental Congressional Commissions" or "ECC" means each of the commissions engaged in the review of environmental legislation in the House of Representatives and the Senate of the Borrower; (h) "Environmental Law" means the environmental law dated April 27, 1992 published in the Official Gazette on June 15, 1992; (i) "FONAMA" means Fondo Nagional para el Medio Ambiente, an agency of the Borrower established pursuant to Article 87 of the Environmental Law; (j) "FONAMA's By-Laws" means the by-laws of FONAMA enacted by the Borrower on November 16, 1992; (k) "FONAMA's Investment Program and Budget" means the annual prograx of investments of FONAMA, identifying the sources of financing of all such investments; (1) "FONAMA's Operations Manual" means the manual approved by the Borrower on November 16, 1992; (m) "Global Environmental Trust Fund Grant Agreement" means the agreement of even date herewith entered into between the Borrower and the Bank acting as Trustee of the Global Environment Trust Fund for the Biodiversity Conservation Project; (n) "LIDEMA" means Lga de Defensa del Medio Ambiente, an NGO (as defined below) operating in Bolivia; (o) "LIDEMA Cooperation Agreement" means the agreement to be entered into between on the one hand LIDEMA, CIEC, ASEO and SENTA and on the other hand, the Borrower pursuant to Section 3.01 (c) (ii) of this Agreement, as the same may be amended from time to time; -3- (p) "Management and Coordination Agreement" means the agreement to be entered into between the Borrower and FONAMA pursuant to Section 3.01 (b) of this Agreement, as the same may be amended from time to time; (q) "NGO" means a non-governmental organization established and operating in the Borrower's territory; (r) "Project Unit" means the unit established in FONAMA for purposes of the Project; (s) "Project Preparation Advances" means the two project preparation advances granted by the Association to the Borrower pursuant to respectively: (i) an exchange of letters between the Borrower and the Association dated July 31, 1991 and August 7, 1991; and (ii) a letter from the Association to the Borrower dated June 12, 1992 which was countersigned by the Borrower on July 20, 1992; (t) "SEMTA" means Servicios MGltiples de Teenologias Apropiadas, an NGO operating in Bolivia; (u) "SENMA" means Secretaria Nacional del Medio Ambiente, the national environmental secretariat established pursuant to Article 6 of the Environmental Law; (v) "SENMA By-laws" means the by-laws of SENMA enacted by the Borrower on November 16, 1992; (x) "SENMA's Work Program and Budget" means the annual program of activities to be carried out by SENMA including its policy, environmental quality control, protected areas and legal departments, identifying the sources of financing for all such activities; and (y) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount in various currencies equivalent to three million three hundred thousand Special Drawing Rights (SDR 3,300,000). 4- Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Credit. (b) The Borrower shall, for the purposes of the Project, open and maintain in dollars a special deposit account in the Central Bank on terms and conditions satisfactory to the Association. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 5 to this Agreement. (c) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and pay to itself the amount required to repay the principal amount of the Project Preparation Advances withdrawn and outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advances shall thereupon be cancelled. Section 2.03. The Closing Date shall be June 30, 1997 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.04. (a) The Borrower shall pay to the Association a commitment charge on the principal amount of the Credit not withdrawn from time to time at a rate to be set by the Association as of June 30 of each year, but not to exceed the rate of one-half of one percent (1/2 of 1%) per annum. (b) The commitment charge shall accrue: (i) from the date sixty days after the date of this Agreement (the accrual date) to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or cancelled; and (ii) at the rate set as of the June 30 immediately preceding the accrual date or at such other rates as may be set from time to time thereafter pursuant to paragraph (a) above. The rate set as of June 30 in each year shall be applied from the next payment date in that year specified in Section 2.06 of this Agreement. (c) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without -5- restrictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Commitment charges and service charges shall be payable semiannually on April 15 and October 15 in each year. Section 2.07. (a) Subject to paragraphs (b) and (c) below, the Borrower shall repay the principal amount of the Credit in semi- annual installments payable on each April 15 and October 15 commencing April 15, 2003 and ending October 15, 2032. Each installment to and including the installment payable on October 15, 2012 shall be one percent (1%) of such principal amount, and each installment thereafter shall be two percent (2%) of such principal amount. (b) Whenever: (i) the Borrower's gross national product per capita, as determined by the Association, shall have exceeded $790 in constant 1985 dollars for five consecutive years; and (ii) the Bank shall consider the Borrower creditworthy for Bank lending, the Association may, subsequent to the review and approval thereof by the Executive Directors of the Association and after due consideration by them of the development of the Borrower's economy, modify the terms of repayment of installments under paragraph (a) above by requiring the Borrower to repay twice the amount of each such installment not yet due until the principal amount of ie Credit shall have been repaid. If so requested by the Borrower, the Association may revise such modification to include, in lieu of some or all of the increase in the amounts of such installments, the payment of interest at an annual rate agreed with the Association on the principal amount of the Credit withdrawn and outstanding from time to time, provided that, in the judgment of the Association, such revision shall not change the grant element obtained under the above-mentioned repayment modification. (c) If, at any time after a modification of terms pursuant to paragraph (b) above, the Association determines that the Borrower's economic condition has deteriorated significantly, the -6- Association may, if so requested by the Borrower, further modify the terms of repayment to conform to the schedule of installments as provided in paragraph (a) above. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement, and, to this end, shall carry out the Project through SENMA,, under the management and coordination of FONAMA6, and with the assistance of: (i) CIEC in respect of Part C.1 of the Project; (ii) LIDEMA, CIEC, ASEO and SEHTA in respect of Part C.2 of the Project; and (iii) the ECC in respect of Part B.2 of the Project; all with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and economic practices and with due regard to ecological and environmental factors, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) The Borrower shall make available, as a grant, the proceeds of the Credit to FONAMA under a mana&ement and coordination agreement to be entered into between the Borrower and FONAMA, under terms and conditions which shall have been approved by the Association which shall include, inter alia, those set fotth in Schedule 6 to this Agreement. (c) The Borrower shall enter into an agreement or make contractual arrangements satisfactory to the Association, under terms and conditions which shall have been approved by the Association, with: (i) CIEC for purposes of Part C.1 of the Project; (ii) LIDEMA, CIEC, ASEO and SEMTA for purposes of Part C.2 of the Project; and (iii) the ECC for purposes of Part B.2 of the Project. (d) The Borrower shall exercise its rights under the Management and Coordination Agreement, the CIEC Cooperation Agreement, the LIDEMA Cooperation Agreement and the ECC Cooperation Agreement in such manner as to protect the interests of the Borrower and the Association and to accomplish the purposes of the Credit, and except as the Association shall otherwise agree, the Borrower - 7 - shall not assign, amend, abrogate or waive the Management and Coordination Agreement, the CIEC Cooperation Agreement, the LIDEMA Cooperation Agreement or the ECC Cooperation Agreement or any provision thereof. (e) Without limitation upon the provisions of paragraph (a) of this Section and except as the Borrower and the Association shall otherwise agree, the Borrower shall carry out the Project in accordance with: (i) the Implementation Program set forth in Schedule 4 to this Agreement; and (ii) performance targets and implementation indicators acceptable to the Association. Section 3.02. Except as the Association shall otherwise agree, procurement of the goods and consultants' services required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to this Agreement. Section 3.03. Without limitation to any of its obligations under this Agreement, the Borrower shall: (a) allocate in its annual budget for SENMA, for the years 1993 through 1996 and thereafter, the following minimum amounts, as counterpart funds for the financing of the Project; (i) $116,000 equivalent for calendar year 1993; (ii) $123,500 equivalent for calendar year 1994; (iii) $150,300 equivalent for calendar year 1995; and (iv) $164,600 equivalent for calendar year 1996, and thereafter; (b) (i) maintain in respect of SENMA, and cause FONAMA to maintain: (A) an organizational structure satisfactory to the Association; and (B) key personnel positions detailed in such organizational structures filled with personnel who shall have experience and qualifications acceptable to the Association; and (ii) consult with the Association with respect to any changes to SENMA's or FONAMA's organizational structures and any replacement of key personnel positions prior to any such change or replacement; (c) (i) employ, and cause FONAMA to employ, any fixed-term staff financed in whole or in part out of the proceeds of the Credit with personnel who shall have experience and qualifications - 8 - acceptable to the Association; and (ii) consult with the Association with respect to any replacement of such fixed-term staff. Section 3.04. Without limitation to its obligations under Article IX of the General Conditions, the Borrower shall: (a) not later than October 31 each year, furnish or cause to be furnished to the Association, for its approval, the operating plans for each part of the Project proposed to be carried out during the following year, including the corresponding budgets, and specifying the extent of compliance with the operating plans submitted the prior year, and implemented during that year; and (b) not later than May 31 and November 30 each year, furnish or cause to be furnished to the Association, for its comments, a progress report identifying the main Project implementation issues, if any, together with recommendations regarding remedial measures, if any, proposed to be taken in relation to the Project. Section 3.05. The Borrower shall: (a) not later than December 31 each year, review with the Association its progress in the implementation of the Project and the actions set forth in Schedule 4 to this Agreement and in meeting the targets and indicators referred to in Section 3.01 (e) (ii) of this Agreement; (b) as part of the annual review to be carried out in 1994, review with the Association, in addition to the matters referred to in paragraph (a) hereof: the extent to which FONAMA's investments and investment proposals are consistent with the Borrower's policy priorities, the types of environmental projects undertaken by FONAMA, SENMA's effectiveness in building working relationships with the private sector and influencing the actions thereof, the extent to which SENMA has been able to influence the integration of environmental concerns into policy formulation and SENHA's progress in enforcing environmental regulations and reviewing environmental impact assessments; and (c) if the results of any of the reviews referred to in paragraphs (a) and (b) hereof are not satisfactory to the Association, take all such remedial action, satisfactory to the Association, as shall be necessary to achieve the objectives of the Project and to meet the performance targets and implementation indicators referred to in Section 3.01 (e) (ii) of this Agreement. Section 3.06. (a) The Borrower shall employ a procurement agent, acceptable to the Association, under terms and conditions satisfactory to the Association, for the purpose of assisting the Borrower in contracting the consultants and procuring the goods and services to be financed out of the proceeds of the Credit. (b) The Borrower shall exercise its rights and comply with its obligations under the contract or contractual arrangements made with the procurement agent referred to in paragraph (a) above in such a manner as to protect the interests of the Borrower and the Association, and to accomplish the purposes of the Credit, and, except as the Association shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive said contract or contractual arrangements or any provision thereof. Section 3.07. The Borrower shall, in the event the Civil Service Reform Program is implemented, include SENMA's personnel in the initial phase of such program. Section 3.08. The Borrower shall, not later than October 31 each year, furnish to the Association for its review, SENMA's Work Program and Budget for the following year. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall maintain or cause FONAMA to maintain, records and separate accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project. (b) The Borrower shall: (i) have or cause FONAMA to have, the records and accounts referred to in paragraph (a) of this Section including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish or cause FONAM& to furnish, to the Association, as soon as available, but in any case not later than six months after the end of - 10 - each such year, a certified copy of 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 or cause FONAMA to furnish, to the Association, such other information concerning said records, accounts and the audit thereof as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, or cause to be retained, until at least one year after the Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account or payment out of the Special Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association's representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. - 11 - ARTICLE V Remedies of the Association Section 5.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional events are specified: (a) FONAMA shall have failed to perform any of its obligations under the Management and Coordination Agreement. (b) As a result of events which have occurred after the date of this Agreement, an extraordinary situation shall have arisen which shall make it improbable that FONAMA will be able to perform its obligations under the Management and Coordination Agreement. (c) The Environmental Law or SENMA's By-laws or FONAMA' s By- laws or FONAMA's Operations Manual shall have been amended, suspended, abrogated, repealed or waived so as to affect, in the opinion of the Association, materially and adversely the ability of the Borrower to carry out the Project or FONAMA to perform any of its obligations under the Management and Coordination Agreement. (d) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of FONAMA or for the suspension of its operations. (e) The Bank acting as Trustee of the Global Environment Trust Fund shall have suspended in whole or in part the right of the Borrower to make withdrawals under the Global Environment Trust Fund Agreement because of a failure by the Borrower to perform any of its obligations under such agreement. Section 5.02. Pursuant to Section 7.01 (d) of the General Conditions, the following additional events are specified: (a) any event specified in paragraph (a) of Section 5.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Association to the Borrower; and (b) any event specified in paragraphs (c) or (d) of Section 5.01 of this Agreement shall occur. - 12 - ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the Management and Coordination Agreement has been executed on behalf of the Borrower and FONAMA; (b) the Borrower has employed, or has caused FONAMA to employ, the consultants required to assist the Borrower in the implementation of Part A.4 of the Project; and (c) FONAMA has employed: (i) a procurement agent pursuant to Section 3.06 (a) of this Agreement; and (ii) the consultants required to assist the Borrower in the implementation of the training included in Parts A.1 (b) and A.2 of the Project. Section 6.02. The following is specified as an additional matter, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association, namely, that the Management and Coordination Agreement has been duly authorized or ratified by the Borrower and FONAMA, and is legally binding upon the Borrower and FONAMA in accordance with its terms. Section 6.03. The date 42 1,3 is hereby specified for the purposes of Section 12104 of the General Conditions. Section 6.04. The obligations of the Borrower under Sections 3.01 (d), 3.03, 3.07 and 3.08 and the provisions of paragraph (d) of Section 5.02 of this Agreement shall cease and determine on the date on which this Agreement shall terminate or on the date ten years after the date of this Agreement, whichever shall be the earlier. A date 90 days after the date of this Agreement will be inserted here. - 13 - ARTICLE VII Representatives of the Borrower; Addresses Section 7.01. The Minister of Planning and Coordination of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministry of Planning and Coordination La Paz Bolivia Cable address: Telex: MINPLANEACION 3280 (MINCORD BV) La Paz, Bolivia For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 248423 (RCA) Washington, D.C. 82987 (FTCC) 64145 (WUI) or 197688 (TRT) - 14 - IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, 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. REPUBLIC OF BOLIVIA By Authorized epresentative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President Lati America and the Caribbean - 15 - SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Goods 170,000 100% of foreign expenditures, 100% of local expenditures (ex- factory cost) and 85% of local expenditures for other items pro- cured locally (2) Consultants' 1,070,000 100% Services (3) Training 720,000 100% (4) Operating 270,000 100% Expenditures - 16 - Amount of the Credit Allocated Z of (Expressed in Expenditures Category SDR Equivalent) to be Financed (5) Incremental Salaries: (a) for payments 60,000) 100% made on or ) before ) December 31, ) 1993 ) (b) for payments 60,000) 100% made after ) December 31, ) 1993 and on or ) before Decem- ) ber 31, 1994 ) (c) for payments 50,000) 80% made after ) December 31, ) 1994 and on or ) before Decem- ) ber 31, 1995 ) (d) for payments 30,000) 50% made after ) December 31, ) 1995 and on or ) before Decem- ) ber 31, 1996 ) - 17 - Amount of the Credit Allocated Z of (Expressed in Expenditures Catezory SDR Equivalent) to be Financed (6) Refunding of 710,000 Amounts due pur- Project Prepara- suant to Section tion Advances 2.02 (c) of this Agreement (7) Unallocated 180,000 TOTAL 3&300000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of the Borrower; (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower; (c) the term "Incremental Salaries" means the salaries of SENMA's Executive Coordinator, two of SENMA's directors and the assistant to the director of SENMA's finance and management unit or any other high-level position that the Association may agree to finance; and (d) the term "Operating Expenditures" means the operating expenditures of the Project Unit. 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) expenditures for Part C.1 of the Project unless the CIEC Cooperation Agreement has been entered into; (c) expenditures for Part C.2 of the Project unless the LIDEMA Cooperation Agreement has been entered into; and (d) expenditures for Part B.2 of the Project unless the ECC Cooperation Agreement has been entered into. - 18 - SCEEDULE 2 Description of the Project The objectives of the Project are: (a) to strengthen the Borrower's institutions involved in the promotion of sustainable use of natural resources and the protection of the environment; (b) to develop the Borrower's skills to plan, evaluate and implement environmental action programs; (c) to rationalize and improve the Borrower's environmental legal and regulatory framework; and (d) to raise public awareness of environmental issues. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Association may agree upon from time to time to achieve such objectives: Part A: Institutional Strengthening of Environmental Agencies 1. Training of SENMA staff in: (a) environmental planning and management, including as part of such training short visits to other environmental agencies abroad; (b) the evaluation of environmental impact assessments; and (c) natural resource and environmental economics. 2. Training of staff of agencies (other than SENMA) involved in the preparation of environmental impact assessments in the preparation of such assessments. 3. Dissemination of information to the public at large on environmental issues. 4. Development, in FONAMA, of a system or systems for: (a) evaluating and approving investment proposals and assessing trade- offs between economic and environmental goals; and (b) collecting information on planned and ongoing environmental activities which would enable FONAM& to influence investment decisions and avoid overlapping of activities financed by different donors. 5. Support for the Project Unit to manage and coordinate Project implementation. 6. Development of a research program to analyze development policies in the context of sustainable development. - 19 - 7. Provision of expert advise to the financial management and budget unit of SENM. Part B: Environmental Legal and Revulatory Framework 1. (a) Preparation of regulations for: (i) the Environmental Law; (ii) the biodiversity and forestry laws to be submitted to the Borrower's Congress; (iii) environmental impact assessments; (iv) environmental quality control; (v) the control of environmental aspects of mining exploration and hydrocarbon exploitation; and (vi) the water law as submitted to the Borrower's Congress; (b) preparation of the land-use planning law; and (c) provision of the consultants services required therefor. 2. Support for the Environmental Congressional Commissions in the review of environmental laws and provision of consultants services required therefor. 3. Carrying out of workshops to support the participation of private and public agencies, NGOs and individuals in the preparation of environmental regulations. 4. Training to individuals in the public and private sector to promote a better understanding of environmental legal issues. 5. Establishment of an environmental law library in SENMA. Part C: Environmental Education 1. Carrying out of a pilot project in the Municipality of La Paz consisting of: (a) the training of selected teachers to prepare them to educate primary school students in environmental issues; (b) the introduction of environmental teaching materials in selected primary schools; and (c) the development of methodologies for curriculum reform. 2. Carrying out of three pilot projects in three rural zones in the Borrower's territory acceptable to the Association consisting of: (a) the activities included to in Part C.1 of the Project; and (b) training to community groups affected by environmental problems in such rural zones. The Project is expected to be completed by December 31, 1996. - 20 - SCHEDULE 3 Procurement and Consultants' Services Section I. Procurement of Goods Part A: Procurement Procedures 1. Goods (including computers and related softwares, and vehicles) shall be procured under coitracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association. 2. Training materials, office supplies and other goods estimated to cost the equivalent of $25,000 or less per contract, up to an aggregate amount equivalent to $120,000, may be procured under contracts awarded on the basis of comparison of price quotations obtained from at l.east three suppliers eligible under the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1992 (the Guidelines), in accordance with procedures acceptable to the Association. Part B: Review by the Association of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to all contracts procured pursuant to the provisions of Part A.1 hereof, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract required to be furnished to the Association pursuant to said paragraph 2 (d) shall be furnished to the Association prior to the making of the first payment out of the Special Account in respect of such contract. (b) With respect to each contract not governed by the preceding paragraph, the procedures set forth in paragraphs 3 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract together with the other information required to be furnished to the Association pursuant to said paragraph 3 shall be - 21 - furnished to the Association as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 5 to this Agreement. (c) The provisions of the preceding subparagraph (b) shall not apply to contracts on account of which withdrawals from the Credit Account are to be made on the basis of statements of expenditure. 2. The figure of 15% is hereby specified for purposes of paragraph 4 of Appendix 1 to the Guidelines. Section II. Employment of Consultants 1. In order to assist the Borrower in carrying out the Project, the Borrower shall employ, or shall cause FONAMA to employ, consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association on the basis of the "Guidelines for the Use of Consultants by World Bank lorrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. - 22 - SCHEDULE 4 Implementation Program Actions to be taken by the Borrower Date (by) 1. Complete implementation of the training included in: (a) Part A.1 (a) of the Project February 28, 1994 (b) Part A.1 (b) and A.2 of the Project June 30, 1995 (c) Part A.1 (c) of the Project December 31, 1995 2. Furnish to the Association for its comments the research program to be developed under Part A.6 of the Project, including the schedule thereof. December 31, 1993 3. (a) Complete implementation of ) the pilot project included in ) Part C.1 of the Project. ) (b) Furnish to the Association for ) its comments the methodology ) and guidelines for incorporating ) the recommendations arising from ) the pilot project referred to in ) 3 (a) above in the primary school) curricula. ) December 31, 1995 4. (a) Complete implementation of the pilot projects included in Part C.2 of the Project. December 31, 1994 - 23 - Actions to be taken by the Borrower Date (by) (b) Furnish to the Association for its comments the methodology and guidelines for incorporating the recommnendations arising from the pilot projects referred to in 4 (a) above in the primary school curricula. December 31, 1994 5. (a) Furnish to the Association for its comients the draft regulations to be prepared Three months under Part B.1 (a) of the before their Project. enactment (b) Enact regulations for: (i) the Environmental ) Law; and ) (ii) the evaluation of ) environmental ) impact assessments ) June 30, 1993 (iii) environmental quality control October 31, 1994 (iv) the biodiversity Twelve months law after the date the biodiversity law is enacted (v) the forestry law Twelve months after the date the forestry law is enacted (vi) the water law Twelve months after the date the water law in enacted - 24 - Actions to be taken by the Borrower Date (by) (vii) the control of environ- mental aspects of mining exploration and hydrocarbon ex- ploitation December 31, 1996 - 25 - SCHEDULE 5 Special Account 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (1), (2), (3), (4) and (5) set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (b) the term "eligible expenditures" means expenditures in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit allocated from time to time to the eligible Categories in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount of $400,000 to be withdrawn from the Credit Account and deposited in the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Payments out of the Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Association has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Special Account shall be made as follows: (a) For withdrawals of the Authorized Allocation, the Borrower shall furnish to the Association a request or requests for a deposit or deposits which do not exceed the aggregate amount of the Authorized Allocation. On the basis of such request or requests, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit in the Special Account such amount or amounts as the Borrowei shall have requested. (b) (i) For replenishment of the Special Account, the Borrower shall furnish to the Association requests for deposits into the Special Account at such intervals as the Association shall specify. (ii) Prior to or at the time of each such request, the Borrower shall furnish to the Association - 26 - the documents and other evidence required pursuant to paragraph 4 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account such amount as the Borrower shall have requested and as shall have been shown by said documents and other evidence to have been paid out of the Special Account for eligible expenditures. All such deposits shall be withdrawn by the Association from the Credit Account under the respective eligible Categories, and in the respective equivalent amounts, as shall have been justified by said documents and other evidence. 4. For each payment made by the Borrower out of the Special Account, the Borrower shall, at such time as the Association shall reasonably request, furnish to the Association such documents and other evidence showing that such payment was made exclusively for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Schedule, the Association shall not be required to make further deposits into the Special Account: (a) if, at any time, the Association shall have determined that all further withdrawals should be made by the Borrower directly from the Credit Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or (b) once the total unwithdrawn amount of the Credit allocated to the eligible Categories, less the amount of any outstanding special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions with respect to the Project, shall equal the equivalent of twice the amount of the Authorized Allocation. Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to the eligible Categories shall follow such procedures as the Association shall specify by notice to the Borrower. Such further withdrawals shall be made only after and to the extent that the Association shall have - 27 - been satisfied that all such amounts remaining on deposit in the Special Account as of the date of such notice will be utilized in making payments for eligible expenditures. 6. (a) If the Association shall have determined at any time that any payment out of the Special Account: (i) was made for an expenditure or in an amount not eligible pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association: (A) provide such additional evidence as the Association may request; or (B) deposit into the Special Account (or, if the Association shall so request, refund to the Association) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association shall have determined at any time that any amount outstanding in the Special Account will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to paragraphs 6 (a), (b) and (c) of this Schedule shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions. - 28 - SCHEDULE 6 Terms and Conditions of the Management and Coordination Agreement The Management and Coordination Agreement shall provide, inter alia, the following rights and obligations: (a) the Borrower's obligation to make available to FONAMA, as a grant, the proceeds of the Credit, so as to enable FONAMA to manage and coordinate the Project in the name and on behalf of the Borrower; (b) FONAMA's obligation: (i) to manage and coordinate the Project with due diligence and efficiency and in accordance with: (A) sound administrative, financial, managerial and environmental practices and standards; and (B) FONAMA's Operations Manual and FONAMA's By- laws; (ii) to maintain records and separate accounts adequate to reflect in accordance with sound accounting practices, the operations, resources and expenditures in respect of the Project; (iii) to maintain the Project Unit, in form and with functions satisfactory to the Association, to manage and coordinate the Project and to staff the said unit with personnel in numbers and with qualifications and experience acceptable to the Association; (iv) to furnish to the Association for its review, not later than September 30 each year, FONAMA's Investment Program and Budget for the following year; and (v) to assist the Borrower in meeting the requirements set forth in Sections 3.01, 3.02, 3.03 (b), 3.04, 3.05 and 3.06, and Article IV of this Agreement; - 29 - (c) the requirement that: (i) the goods and services to be financed out of the proceeds of the Credit shall be procured in accordance with Schedule 3 to this Agreement; (ii) such goods and services shall be used exclusively in the carrying out of the Project; and (iii) FORAMA enter into the CIEC Cooperation Agreement, the LIDEMA Cooperation Agreement and the ECC Cooperation Agreement acting in the name and on behalf of the Borrower; (d) the right of the Borrower: (i) to inspect, each by itself, or jointly with representatives of the Association, if the Association shall so request, FONAMA's facilities in respect of the Project and any relevant records and documents; (ii) to obtain all such information as the Borrower or the Association shall reasonably request regarding the foregoing, the administration, operations and financial condition of the Project and the benefits to be derived from it; and (iii) to suspend or terminate the right of FORAMA to use the proceeds of the Credit upon failure by FONAMA to perform any of its obligations under the Management and Coordination Agreement. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Development Association. F SECRETA