Argentina - Public Investment Strengthening Technical Assistance Project : Loan 3958 - Loan Agreement - Conformed

LOAN NUMBER 3958-AR Loan Agreement (Public Investment Strengthening Technical Assistance Project) between ARGENTINE REPUBLIC and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated ru 2/,1997 LOAN NUMBER 3958-AR LOAN AGREEMENT AGREEMENT, dated FeAva t e / .1997, between ARGENTINE REPUBLIC (the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank). 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 Bank to assist in the financing of the Project; and WHaEREAS the Bank has agreed, on the basis, inter alia, of the foregoing, to extend the Loan 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 Loan and Guarantee Agreements" of the Bank, dated January 1, 1985, with the modifications set forth below (the General Conditions) constitute an integral part of this Agreement: (a) The last sentence of Section 3.02 is deleted. (b) The second sentence of Section 5.01 is modified to read: "Except as the Bank and the BorTower shall otherwise agree, no withdrawals shall be made: (a) on account of expenditures in the territories of any country which is not a member of the Bank or for goods produced in, or services supplied from, such territories; or (b) for the purpose of any payment to persons or entities, or for any import of goods, if such payment or import, to the knowledge of the Bank, is prohibited by a decision of the United Nations Security Council taken under Chapter VII of the Charter of the United Nations." (c) In Section 6.02, subparagraph (k) is relettered as subparagraph (1) and a new subparagraph (k) is added to read: -2- "(k) An extraordinary situation shall have arisen under which any further withdrawals under the Loan would be inconsistent with the provisions of Article III, Section 3 of the Bank's Articles of 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) "Administrative Manual" means the manual referred to in Section 5.01 (b) of this Agreement; (b) "BAPIN" means Banco de Proyectos de Inversi6n P6'blica, the Borrower's Public Investment Project Data Bank; (c) "SIP" means Subsecretaria de Inversi6n Publica, the Borrower's Subsecretariat of Public Investment within SEP; (d) "Implementation Plan" means the plan for the execution of the Project agreed between the Borrower and the Bank; (e) "MDE" means the Borrower's Ministry of Economy and Public Works and Services; (f) "PAU" means the Project administration unit refend to in Section 3.04 (a) of this Agreement; (g) "Performance Indicators" means the indicators for measuring the results of the Project agreed between the Borrower to the Bank; (h) "Project Administrator" means the Project administrator referred to in Section 3.04 (b) of this Agreement; (i) "SEP" means the Secretariat of Economic Programming within MDE; (j) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement. -3- ARTICLE H The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Loan Agreement, various currencies that shall have an aggregate value equivalent to the amount of sixteen million dollars ($16,000,000), being the sum of withdrawals of the proceeds of the Loan, with each withdrawal valued by the Bank as of the date of such withdrawal. Section 2.02. (a) The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement for expenditures made (or, if the Bank 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 Loan. (b) The Borrower may, for the puiposes of the Project, open and maintain in dollars a special deposit account in a commercial bank on terms and conditions satisfactory to the Bank, including appropriate protection against set-off, seizure or attachment. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 5 to this Agreement. Section 2.03. The Closing Date shall be June 30, 2001 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.04. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.05. (a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time, at a rate for each Interest Period equal to the Cost of Qualified Borrowings determined in respect of the preceding Semester, plus one-half of one percent (1/2 of 1%). On each of the dates specified in Section 2.06 of this Agreement, the Borrower shall pay interest accrued on the principal amount outstanding during the preceding Interest Period, calculated at the rate applicable during such Interest Period. (b) As soon as practicable after the end of each Semester, the Bank shall notify the Borrower of the Cost of Qualified Borrowings determined in respect of such Semester. -4- (c) For the purposes of this Section: (i) "Interest Period" means a six-month period ending on the date immediately preceding each date specified in Section 2.06 of this Agreement, beginning with the Interest Period in which this Agreement is signed. (ii) "Cost of Qualified Borrowings" means the cost, as reasonably determined by the Bank and expressed as a percentage per annum, of the outstanding borrowings of the Bank drawn down after June 30, 1982, excluding such borrowings or portions thereof as the Bank has allocated to fund: (A) the Bank's investments; and (B) loans which may be made by the Bank after July 1, 1989 bearing interest rates determined otherwise than as provided in paragraph (a) of this Section. (iii) "Semester" means the first six months or the second six months of a calendar year. (d) On such date as the Bank may specify by no less than six months' notice to the Borrower, paragraphs (a), (b) and (c) (iii) of this Section shall be amended to read as follows: "(a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time, at a rate for each Quarter equal to the Cost of Qualified Borrowings determined in respect of the preceding Quarter, plus one-half of one percent (1/2 of 1%). On each of the dates specified in Section 2.06 of this Agreement, the Borrower shall pay interest accrued on the principal amount outstanding during the preceding Interest Period, calculated at the rates applicable during such Interest Period." "(b) As soon as practicable after the end of each Quarter, the Bank shall notify the Borrower of the Cost of Qualified Borrowings determined in respect of such Quarter." "(c) (iii) 'Quarter' means a three-month period commencing on January 1, April 1, July 1 or October 1 in a calendar year." Section 2.06. Interest and other charges shall be payable semiannually on February 15 and August 15 in each year. -5- Section 2.07. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. Section 2.08. The Secretary of SEP, or any other person designated in writing by him, is designated as representative of the Borrower for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V 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 SIP, with due diligence and efficiency and in conformity with appropriate administrative, managerial and financial practices, and shall. provide, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) Without limitation or restriction upon the provisions of paragraph (a) of this Section and except as the Borrower and the Bank shall otherwise agree, the Borrower shall carry out the Project in accordance with the Administrative Manual and the Implementation Plan. S2ction 3.02. Except as the Bank shall otherwise agree, procurement of the goods and consultants' services required for the Project and to be financed out of the proceeds of the Loan shall be governed by the provisions of Schedule 4 to this Agreement. Section 3.03. For the purposes of Section 9.07 of the General Conditions and without limitation thereto, the Borrower shall: (a) prepare, on the basis of guidelines acceptable to the Bank, and furnish to the Bank not later than six months after the Closing Date or such later date as may be agreed for this purpose between the Borrower and the Bank, a plan designed to ensure the continued achievement of the Project objectives; and (b) afford the Bank a reasonable opportunity to exchange views with the Borrower on said plan. -6- Section 3.04. (a) The Borrower shall maintain, at all times until completion of the Project, a Project administration unit with organization, functions and responsibilities satisfactory to the Bank, including, inter alia, the following functions and responsibilities: (i) preparation of the reports referred to in Section 3.07 (b) of this Agreement; (ii) carrying out the procurement of goods and consultants services required for the Project; and (iii) overseeing the administration of the Project, with respect to withdrawals, accounting and auditing. (b) The Borrower shall ensure that the PAU is, at all times during the execution of the Project, headed by a Project administrator, with qualifications, experience, functions and responsibilities satisfactory to the Bank, assisted by qualified staff in adequate numbers. (c) Without limitation or restriction upon other provisions of this Agreement, the Borrower shall provide, promptly as needed, the funds, facilities, services and other resources required for the discharge of the functions of the PAU and the Project Administrator. Section 3.05. With regard to the services of the consultants to be employed under the Project in accordance with the Implementation Plan, the Borrower shall, through the PAU: (a) promptly after the completion of each service, furnish to the Bank a copy of the consultants' findings and recommendations; (b) afford the Bank a reasonable opportunity to comment on such findings and recommendations; and (c) review and implement the recommendations of such consultants, taking into account the Bank's comments thereon. Section 3.06. With regard to the training programs to be carried out under the Project in accordance with the Implementation Plan, the Borrower shall, through the PAU: -7- (a) furnish to the Bank, for its approval, the proposed contents of each such program, the schedule for its implementation, and the trainees' selection criteria; (b) carry out such training programs in accordance with the contents, schedule and selection criteria approved by the Bank; and (c) furnish to the Bank a report, of such scope and in such detail as the Bank shall reasonably request, on the results of each such training program and the benefits derived therefrom. Section 3.07. The Borrower, through the PAU, shall: (a) maintain policies and procedures adequate to enable it to monitor and evaluate on an ongoing basis, in accordance with the Performance Indicators, the carrying out of the Project and the achievement of the objectives thereof; (b) prepare, under terms of reference satisfactory to the Bank, and furnish to the Bank on or about December 31 and June 30 of each year, a report integrating the results of the monitoring and evaluation activities performed pursuant to paragraph (a) of this Section, on the progress achieved in the carrying out of the Project during the period preceding the date of said reports and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives thereof during the twelve-month period following such dates; and (c) review with the Bank the reports referred to in paragraph (b) of this Section, and, thereafter, take all measures required to ensure the efficient completion of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of said reports and the Bank's views on the matter. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records and separate accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall: -8- (i) 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 Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan 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, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan 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 Bank'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. -9- ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as additional conditions to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions: (a) the PAU shall have been established and the Project Administrator shall have been appointed; (b) the Borrower shall have put into effect a Project administrative manual, satisfactory to the Bank, such manual to comprise: (i) details on the organization, functions and responsibilities of the PAU; and (ii) guidelines on the implementation and monitoring of Project activities; and (c) all action shall have been taken by the Borrower in order to permit that the procurement of goods and services required for the Project and to be financed out of the proceeds of the Loan shall be made in accordance with the provisions set forth or referred to in this Agreement. Section 5.02. The following is specified as an additional matter, within the meaning of Section 12.02 (c) of the General Conditions, to be included in the opinion or opinions to be furnished to the Bank, namely, that the action referred to in Section 5.01 (c) of this Agreement has been taken and no other action on behalf of the Borrower is required for the procurement of goods and services in accordance with the provisions set forth or referred to in this Agreement. Section 5.03. The date ?d..k & / , 1997 is hereby specified for the purposes of Section 12.04 of the Geneal Conditions. - 10 - ARTICLE VI Representative of the Borrower; Addresses Section 6.01. Except as provided by Section 2.08 of this Agreement, the Minister of Economy and Public Works and Services of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministerio de Economia y Obras y Servicios Pilblicos Hip6lito Yrigoyen 250 Buenos Aires, Argentina Telex: (390) 21-952 For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 248423 (MCI), or 64145 (MCI) -11 - 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. ARGENTINE REPUBLIC By /5/ Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Regional Vice President Latin America and the Caribbean - 12 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Dollar to be Category Equivalent) Financed (1) Goods 550,000 76% (2) Consultants' 13,750,000 68% services and training (3) Project 1,700,000 82% Administration TOTAL 16,000,000 2. For the purposes of this Schedule, the term "Project Administration" means administration expenditures of the PAU, including: (i) advertising and production of bidding documents; and (ii) local and international travel. 3. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of payments made for expenditures prior to the date of this Agreement. 4. The Bank may require withdrawals from the Loan Account to be made on the basis of statements of expenditure for expenditures under: (a) contracts for goods and for the services of consulting firms costing less than $100,000 equivalent; - 13 - (b) contracts for the services of individual consultants' services costing less than $35,000 equivalent; (c) category 3 of the table set forth in paragraph 1 of this Schedule; and (d) category 2 of the table set forth in paragraph I of this Schedule for training, all under such terms and conditions as the Bank shall specify by notice to the Borrower. - 14 - SCHEDULE 2 Description of the Project The objectives of the Project are to enhance the effectiveness and efficiency of the Borrower's public expenditure management by: (a) improving its investment process; (b) enhancing its project analysis capabilities; and (c) building up its project and program evaluation capacity. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Bank may agree upon from time to time to achieve such objectives: Part A: Sectoral Investment Decision Making 1. Carrying out of a series of high-level seminars aimed at familiarizing decision- makers with best practices in the areas of public investment and public expenditure management in selected developed countries and the concepts of the Borrower's law on public investment Qey del Sistema Nacional de Inversiones Piiblicas), including the following topics: (a) developed countries' innovations in public investment and expenditure management; (b) strategic perspectives in public finance management; and (c) public investment in provinces and municipalities. 2. Carrying out of a series of high-level workshops on decision-making, covering, inter alia, the following topics: (a) participatory approaches to investment decision-making; (b) the public investment management process; and (c) building evaluation capacity to strengthen public sector management. - 15 - Part B: Improvement of Project Analysis and Evaluation Capacity of Agencies of the Borrower 1. Conducting capacity-strengthening courses on investment decision-making, project management, procurement and project cycle implementation, covering, inter alia, the following topics: (a) investment decision-making and project management; (b) application of a strategic framework for developing an investment decision-making system; (c) application of best practices in project analysis and management, integration of the project life-cycle, different approaches to analysis and management according to the sector involved, and environmental considerations in policy and project formulation; (d) role of human and institutional factors in project design and performance; (e) effect on project performance of risk and uncertainty; and (f) financial and economic calculations relating to project analysis. 2. Carrying out of training programs for local trainers on principles and techniques of project analysis and management, and development of a local training methodology that can be applied in all sectors of the Borrower's economy. 3. Carrying out of training programs on principles and techniques of project analysis and management. 4. On-the-job training to strengthen institutional capacity for the preparation of strategic medium term expenditure and investment frameworks. 5. Provision of technical assistance on application of project analysis techniques, through the preparation of specific projects, annual investment plans and multiannual investment programs. 6. Provision of technical assistance on the application of impact evaluation techniques, through the analysis of selected existing projects. -16- Part C: Studies 1. Carrying out of studies to provide the analytical basis for the evaluation of environmental costs and benefits of public-policy decisions and investment projects. 2. Carrying out of studies on natural resources aimed at producing environmentally sound investment strategies. 3. Carrying out of studies on cross-regional infrastructure aimed at providing basic information for the preparation of related public investment policies and strategies. Part D: National Public Investment System Provision of technical assistance in the preparation and implementation of the Borrower's national public investment system. The Project is expected to be completed by December 31, 2000. - 17- SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each August 15 and February 15 beginning August 15, 2001 through February 15, 2011 800,000 * The figures in this column represent Dollar equivalents determined as of the respective dates of withdrawal. See General Conditions, Sections 3.04 and 4.03. - 18- Premiums on Prepayment Pursuant to Section 3.04 (b) of the General Conditions, the premium payable on the principal amount of any maturity of the Loan to be prepaid shall be the percentage specified for the applicable time of prepayment below: Time of Prepayment Premium The interest rate (expressed as a percentage per annum) applicable to the Loan on the day of prepayment multiplied by: Not more than three years 0.20 before maturity More than three years but 0.40 not more than six years before maturity More than six years but 0.73 not more than 11 years before maturity More than 11 years but not 0.87 more than 13 years before maturity More than 13 years before 1.00 maturity -19- SCHEDULE 4 Procurement and Consultants' Services Section I. Procurement of Goods Part A: General Goods shall be procured in accordance with the provisions of Section I of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in January 1995 (the Guidelines) and the following provisions of this Section, as applicable. Part B: International Competitive Biddin Except as otherwise provided in Parts C and D of this Section, goods shall be procured under contracts awarded in accordance with the provisions of Section II of the Guidelines and paragraph 5 of Appendix 1 thereto. Part C: Limited International Bidding 1. Goods which the Bank agrees can only be purchased from a limited number of suppliers, regardless of the cost thereof, may be procured under contracts awarded in accordance with the provisions of paragraph 3.2 of the Guidelines. 2. The following provisions shall apply to goods to be procured under contracts awarded in accordance with the provisions of paragraph I of this Part C. (a) Grouping of contracts To the extent practicable, contracts for goods shall be grouped in bid packages estimated to cost $100,000 equivalent or more each. (b) Two-stage bidding procedure The bidding procedure for computer hardware and software shall be carried out in two stages, in accordance with the provisions of paragraph 2.6 of the Guidelines. - 20 - Part D: Local Shopping Goods estimated to cost less than the equivalent of $25,000 per contract, up to an aggregate amount not to exceed the equivalent of $300,000, may be procured under contracts awarded on the basis of comparison of price quotations solicited from a list of at least three suppliers eligible under the Guidelines, in accordance with procedures acceptable to the Bank. Part E: Review by the Bank of Procurement Decisions 1. Procurement Planning Prior to the issuance of any invitations to bid for contracts, the proposed procurement plan for the Project shall be furnished to the Bank for its review and approval, in accordance with the provisions of paragraph 1 of Appendix 1 to the Guidelines. Procurement of all goods shall be undertaken in accordance with such procurement plan as shall have been approved by the Bank, and with the provisions of said paragraph 1. 2. Prior Review The procedures set forth in paragraphs 2 and 3 of Appendix 1 to the Guidelines shall apply to each contract procured in accordance with the provisions of Parts B and C hereof. Section II. Employment of Consultants 1. Consultants' services shall be procured under contracts awarded in accordance with the provisions of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, such contracts shall be based on the standard form of contract for consultants' services issued by the Bank, with such modifications thereto as shall have been agreed by the Bank. Where no relevant standard contract documents have been issued by the Bank, other standard forms acceptable to the Bank shall be used. 2. Notwithstanding the provisions of paragraph 1 of this Section, the provisions of the Consultant Guidelines requiring prior Bank review or approval of budgets, short lists, selection procedures, letters of invitation, proposals, evaluation reports and contracts, shall not apply to: (a) contracts for the employment of consulting firms estimated to cost less than $100,000 equivalent each; or (b) contracts for the employment of individual consultants -21 - estimated to cost less than $50,000 equivalent each. However, said exceptions to prior Bank review shall not apply to: (a) the terms of reference for such contracts; (b) single-source selection of consulting firms; (c) assignments of a critical nature, as reasonably determined by the Bank; (d) amendments to contracts for the employment of consulting firms raising the contract value to $100,000 equivalent or above; or (e) amendments to contracts for the employment of individual consultants raising the contract value to $50,000 equivalent or above. - 22 - SCHEDULE 5 Special Account 1. For the purposes of this Schedule: (a) the term "Eligible Categories" means Categories (1) through (3) set forth in the table in paragraph I 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 Loan 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 equivalent to $750,000 to be withdrawn from the Loan 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 Bank 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 Bank 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 Bank shall, on behalf of the Borrower, withdraw from the Loan Account and deposit in the Special Account such amount or amounts as the Borrower shall have requested. (b) (i) For replenishment of the Special Account, the Borrower shall furnish to the Bank requests for deposits into the Special Account at such intervals as the Bank shall specify. (ii) Prior to or at the time of each such request, the Borrower shall furnish to the Bank 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 Bank shall, on behalf of the - 23 - Borrower, withdraw from the Loan 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 Bank from the Loan 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 Bank shall reasonably request, furnish to the Bank 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 Bank shall not be required to make further deposits into the Special Account: (a) if, at any time, the Bank shall have determined that all further withdrawals should be made by the Borrower directly from the Loan Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; (b) if the Borrower shall have failed to furnish to the Bank, within the period of time specified in Section 4.01 (b) (ii) of this Agreement, any of the audit reports required to be furnished to the Bank pursuant to said Section in respect of the audit of the records and accounts for the Special Account; (c) if, at any time, the Bank shall have notified the Borrower of its intention to suspend in whole or in part the right of the Borrower to make withdrawals from the Loan Account pursuant to the provisions of Section 6.02 of the General Conditions; or (d) once the total unwithdrawn amount of the Loan allocated to the Eligible Categories, less the amount of any outstanding special commitment entered into by the Bank 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 Loan Account of the remaining unwithdrawn amount of the Loan allocated to the Eligible Categories shall follow such procedures as the Bank shall specify by notice to the Borrower. Such further withdrawals shall be made only - 24 - after and to the extent that the Bank shall have 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 Bank 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 Bank, the Borrower shall, promptly upon notice from the Bank: (A) provide such additional evidence as the Bank may request; or (B) deposit into the Special Account (or, if the Bank shall so request, refund to the Bank) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. Unless the Bank shall otherwise agree, no further deposit by the Bank 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 Bank 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 Bank, refund to the Bank such outstanding amount. (c) The Borrower may, upon notice to the Bank, refund to the Bank all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Bank made pursuant to paragraphs 6 (a), (b) and (c) of this Schedule shall be credited to the Loan Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Intcrnational Bank for Reconstruction and Dcvelopment. FOR SECRE