Bolivia - Agricultural Credit Project : Credit 0561 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 561 BO Development Credit Agreement (Agricultural Credit Project) BETWEEN REPUBLIC OF BOLIVIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JUNE 20, 1975 CONFORMED COPY CREDIT NUMBER 561 BO Development Credit Agreement (Agricultural Credit Project) BETWEEN REPUBLIC OF BOLIVIA AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED JUNE 20, 1975 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated June 20, 1975, between REPUBLIC OF BOLIVIA (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT . ASSOCIATION (hereinafter called the Association). WHEREAS (A) The Borrower has requested the Association to assist in the financing of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) The Project will be partly carried out by Banco Agricola de Bolivia (hereinafter called BAB) with the Borrower's assistance and, as part of such assistance, the Borrower will make available to BAB part of the proceeds of the Credit as hereinafter provided; and (C) The Association is willing to make the Credit available upon the terms and conditions set forth hereinafter and in a project agreement of even date herewith between the Association and BAB; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agreements of the Association being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Project Agreement" means the agreement between the Association and BAB of even date herewith, as the same may be amended from time to time, and such term includes the schedule to the Project Agreement; 4 (b) "Subsidiary Loan Agreement" means any one of the agreements to be entered into between Banco Central, acting on behalf of the Borrower, and a Participating Bank pursuant to Section 3.03(iii) of this Agreement, as the same may be amended from time to time; and "Subsidiary Loan" means a loan provided for in a subsidiary loan agreement; (c) "Banco Central" means Banco Central de Bolivia; (d) "BAB" means Banco Agricola de Bolivia; (e) "Participating Bank" means BAB or any commercial bank, once it has entered into a Subsidiary Loan Agreement; (f) "Project Account" means Banco Central's account referred to in Section 3.03(i) of this Agreement; (g) "Farm Loan Agreement" means an agreement to be entered into, pursuant to paragraph B of Schedule 3 to this Agreement, between a Participating Bank and a Beneficiary for the financing of a Farm Plan; and "Farm Loan" means a loan provided for in a Farm Loan Agreement; (h) "Beneficiary" means a farmer or group of farmers to which the Participating Bank proposes to make or has made a Farm Loan; (i) "Farm Plan" means the farm development and the farm management plan, to be carried out by a Beneficiary, to increase or to improve, or both, the physical resources and productivity of a farm, including, but without limitation, the acquisition of such goods and services and the construction of such facilities as shall be suitable for the purposes of the Farm Plan; (j) "ALPD" means the Agricultural and Livestock Project Division of BAB referred to in Section 2.02(i) of the Project Agreement; (k) "Project Director" and "Deputy Project Director" mean the persons referred to in Section 3.08 of this Agreement; and (1) "peso" means the currency of the Borrower. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an 5 amount in various currencies equivalent to seven million and five hundred thousand dollars ($7,500,000). Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time, 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 and to be financed out of the proceeds of the Credit. Section 2.03. Except as the Association shall otherwise agree, goods, works and services (other than consultants' services) for the Project and to be financed out of the proceeds of the Credit allocated from time to time to Category (2) of the table in paragraph I of Schedule 1 to this Agreement, shall be procured in accordance with the provisions referred to in Section 2.03 of the Project - Agreement. Section 2.04. The Closing Date shall be June 30, 1979 or such later date - as the Association shall establish. The Association shall promptly notify the Borrower of such later date. 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. Service charges shall be payable semi-annually on March 1 and September 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each March I and September 1 commencing September 1, 1985 and ending March 1, 2025, each installment to and including the installment payable on March 1, 1995 to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. 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. Section 2.09. Banco Central 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. 6 ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall, through its Ministerio de Asuntos Compesinos Y Agropecuarios, carry out Part B of the Project and shall cause Banco Central and the Participating Banks to carry out Part A of the Project, with due diligence and efficiency and in conformity with appropriate administrative, financial, banking and agricultural practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Without any limitation or restriction upon any of its other obligations under the Development Credit Agreement, the Borrower shall cause BAB to perform in accordance with the provisions of the Project Agreement all the obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable BAB to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (c) Without restriction or limitation upon its obligations under the preceding paragraph (b) of this Section, the Borrower shall subscribe to increases of capital stock of BAB not less than the equivalent of $4,300,000 and make payments on account thereof as follows: (i) the equivalent of $250,000, before the Effective Date; (ii) the equivalent of $860,000, not later than January 31, 1976; (iii) the equivalent of $860,000, not later than July 31, 1976; (iv) the equivalent of $1,360,000, not later than January 31, 1977; and (v) the equivalent of $970,000, not later than September 30, 1977. Section 3.02. (a) Without limitation or restriction upon the provisions of Section 3.01(a) of this Agreement, the Borrower shall, for the purposes of carrying out Part B of the Project, and in addition to the proceeds of the Credit withdrawn from time to time from Category (3) of the table in paragraph I of Schedule 1 to this Agreement, provide as and when needed funds equivalent to not less than $100,000. 7 (b) In carrying out the program of agricultural research and experimentation included in Part B of the Project, the Borrower shall cause its staff to work in close coordination with the Project Director to ensure that such program conforms to the needs of the Project. Section 3.03. Except as the Association shall otherwise agree, the Borrower shall: (i) establish and maintain in Banco Central a Project Account for the purpose of recording all receipts and payments of money for or in connection with Part A of the Project; (ii) deposit in the Project Account (A) immediately upon withdrawal from the Credit Account, such amounts of money in the currency of the Borrower as shall be equivalent to the amounts withdrawn by the Borrower from time to time from the Credit Account for Farm Loans; (B) the amount referred to in Section 6.01(c) of this Agreement; (C) an amount equivalent to not less than $280,000, not later than January 31, 1976; and (D) an amount equivalent to not less than $280,000, not later than January 31, 1977; and (iii) cause Banco Central, acting on behalf of the Borrower, (A) to lend to the Participating Banks such amounts of money as shall have been credited to the Project Account pursuant to the preceding paragraph (ii), under Subsidiary Loan Agreements on such terms and conditions as set forth in Schedule 3 to this Agreement, as such Schedule may be amended from time to time, and on such other terms and conditions as shall be satisfactory to the Association; and (B) to exercise its rights in relation to any Subsidiary Loan Agreement in such manner as to protect the interests of the Borrower and the Association, and not to take or concur in any action which would have the effect of amending, abrogating, assigning or waiving any provision of any such Subsidiary Loan Agreement without the prior approval of the Association. Section 3.04. The Borrower shall review every six months, starting six months after the date of this Agreement, the amounts contributed by the Participating Banks (other than BAB) for the execution of the Project. In the event that such contribution by any Participating Bank (other than BAB) shall have not taken 8 place as required for the execution of the Project, the Boirower shall promptly provide BAB with funds, in the form of contribution to the capital of BAB, in such amounts as shall correspond to the difference between the expected contribution of the equivalent of about $225,000 in each six-month period and the actual contribution of such Participating Bank in the Project. Section 3.05. The Borrower: (i) shall maintain, and in respect of Part A of the Project shall cause Banco Central and the Participating Banks to maintain, records adequate to record the progress of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Credit, and to disclose the use thereof in the Project; (ii) shall enable the Association's accredited representatives to visit the farms and facilities included in the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish or cause to be furnished to the Association all such information as the Association shall reasonably request concerning the Project, the expenditure of the proceeds of the Credit, the goods and services financed out of such proceeds, and in respect of Part A of the Project, the administration, operations and financial condition of Banco Central and the Participating Banks. Section 3.06. The Borrower shall transfer to BAB in the form of contribution to the capital of BAB the proceeds of the Credit withdrawn from time to time from the Credit Account for the purposes of Project administration. Section 3.07. The Borrower shall cause the amounts paid by the Participating Banks to Banco Central under the Subsidiary Loan Agreements less the amounts needed by the Borrower to service the Credit, to be used for further lending for the same purposes of Part A of the Project for a period of 15 years from the date of this Agreement on such terms and conditions as shall be agreed from time to time between the Borrower and the Association. Section 3.08. The Borrower shall appoint, in agreement with the Association, an experienced high level administrator and an agricultural and livestock expert to be respectively the Project Director and Deputy Project Director of ALPD, such persons to be employed under terms and conditions satisfactory to the Association. ARTICLE IV Other Covenants Section 4.01. The Borrower shall: (i) give priority to the carrying out, in consultation with BAB, of a program for granting legal land titles to farmers settled 9 in the lands in the Project areas; and (ii) provide, promptly as needed, the funds, facilities, services and other resources required therefor. Section 4.02. The Borrower shall maintain a price policy aimed at increasing its agricultural production and providing adequate incentives to farmers. Section 4.03. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consistently maintained appropriate 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. Section 4.04. The Borrower shall cause Banco Central to: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements), in respect of Part A of the Project, for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than four months after the end of each such year, (A) certified copies of its financial statements, in respect of Part A of the Project, for such year as so audited and (B) 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 to the Association such other information concerning the accounts and financial statements of Banco Central, in respect of Part A of the Project, and the audit thereof as the Association shall from time to time reasonably request. ARTICLE V Remedies of the Association Section 5.01. For the purposes of Section 6.02 of the General Conditions the following additional events are specified pursuant to paragraph (h) thereof: (a) a default shall occur in the performance of any obligation on the part of BAB under the Project Agreement; (b) a Participating Bank shall have become unable to pay its debts as they mature or any action or proceeding shall have been taken by a Participating Bank or by others whereby any of the property of such Participating Bank shall or may be distributed among its creditors; and (c) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of any Participating Bank or 10 for the suspension of its operations; provided, however, that if any event referred to in paragraph (a), (b) or (c) of this Section shall have occurred and be continuing, the Association may at its option suspend the right of the Borrower to make withdrawals from the Credit Account only in respect of amounts relent or proposed to be relent to such Participating Bank. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (d) thereof: (a) the 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 BAB; and (b) any event specified in paragraph (b) or (c) of Section 5.01 of this Agreement shall occur. 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 execution and delivery of the Project Agreement on behalf of BAB have been duly authorized or ratified by all necessary corporate and governmental action; (b) the execution and delivery of the Subsidiary Loan Agreement on behalf of Banco Central and BAB, respectively, have been duly authorized or ratified by all necessary corporate and governmental action; (c) the Project Account has been established and the Borrower has made a deposit therein in the currency of the Borrower tquivalent to not less than $250,000; (d) the amount set forth in Section 3.01(c)(i) of this Agreement has been paid to BAB as required therein; (e) the Project Director and the Deputy Project Director have been retained as required in Section 3.08 of this Agreement; and 11 (f) a Decreto Supremo has been enacted authorizing the adoption by Banco Central and the Participating Banks of the adjustment method provided in paragraphs A.3(i) and B.5(i) of Schedule 3 to this Agreement and of the rate of interest provided in paragraphs A.4(a)(ii) and B.6(i) of such Schedule 3. 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 Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, BAB, and is legally binding upon BAB in accordance with its terms Section 6.03. The date September 19, 1975 is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 6.04. The obligations of the Borrower under Section 4.02 of this Agreement and the provisions of paragraphs (a) and (b) of Section 5.02 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date 15 years after the date of this Agreement, whichever shall be the earlier. ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister of Finance 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. Ministerio de Finanzas La Paz Bolivia Cable address: MINFINANZAS La Paz 12 For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INDEVAS Washington, D.C. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF BOLIVIA By /s/ Roberto Capriles Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ Adalbert Krieger Regional Vice President Latin America and the Caribbean 13 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 9% Of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Fart Loans under 7,100,000 73% of amounts Part A of the disbursed under Project Farm Loans (2) Project administra- 300,000 tion (a) Civil works and 40% equipment (b) Vehicles and 100% of foreign salaries of expenditures staff (3) Equipment for agri- 100,000 100% of foreign cultural research and expenditures experimentation TOTAL 7,500,000 2. For the purposes of this Schedule the term "foreign expenditures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower. 14 3. The disbursement percentages have been calculated in compliance with the policy of the Association that no proceeds of the Credit shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Credit decreases or increases, the Association may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Association. 4. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of (i) expenditures prior to the date of this Agreement, and (ii) a Farm Loan until the Association has received evidence satisfactory to the Association that the execution and delivery of the appropriate Subsidiary Loan Agreement for the Farm Loan in question, on behalf of Banco Central and the Part'cipating Bank, have been duly authorized or ratified by all necessary governmental and corporate action. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in paragraph I above: (a) withdrawals in respect of Farm Loans under Part A(i) of the Project shall not exceed 55% of the amount of the Credit allocated to Category (1); and (b) if the Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Association nay, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to another Category and which in the opinion of the Association are not needed to meet other expenditures, and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Association shall have reasonably determined that the procurement of any item in Category (2) is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount 15 of the Credit as, in the Association's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. & 16 SCHEDULE 2 Description of the Project The Project is part of the Borrower's lending program to help develop beef and sugarcane production in the lowlands, annual crops and grapes in the valleys and mutton and wool production in the high plateau. Its main objectives are: (a) to expand agricultural production both for export (livestock and sugarcane) and domestic consumption (wool, mutton, wheat, potatoes, oats and grapes); (b) to improve the social and economic condition of about 3,600 poor families in the rural areas; and (c) to channel additional resources to the poorer regions (high plateau and valleys) of the country. The Project includes: Part A: Provision of Farm Loans to: (i) beef cattle ranchers in Beni and Santa Cruz for development of beef cattle breeding and fattening ranches; (ii) sugarcane farmers in Santa Cruz; (iii) grape growers in the valley of Tarija; (iv) potato, wheat and oat growers in Cochabamba; and (v) sheep ranchers in the highlands north and east of La Paz for development of sheep breeding for both wool and mutton. Part B: A program of agricultural research and experimentation at the Saavedra station. The Project is expected to be completed by December 31, 1989. 17 SCHEDULE 3 Lending and Operating Policies and Procedures A. Subsidiary Loan Agreements 1. Banco Central will refinance, under the Subsidiary Loans, to the Participating Banks: (i) 75% of the Farm Loans under Part A(i) of the Project; (ii) 80% of the Farm Loans under Part A(ii) and (iii) of the Project; and (iii) 100% of the Farm Loans under Part A(iv) and (v) of the Project; provided that any such refinancing by Banco Central to a Participating Bank other than BAB will be made only with the prior approval of ALPD of the technical and financial aspects of the respective Farm Plans. 2. Each Subsidiary Loan will be repayable by the Participating Bank to Banco Central within the same period provided by the Participating Bank for the repayment of the amounts disbursed by it under Farm Loans. 3. The outstanding principal amount of the Subsidiary Loan utilized for refinancing Farm Loans under Part A(i), (ii) and (iii) of the Project will be adjusted by Banco Central in the same proportion as the modification of either (i) the rate of exchange between the peso and the dollar between the date of the first disbursement under the Subsidiary Loan and whenever such modification shall occur, such adjustment to be made on the portions of the Subsidiary Loan utilized for refinancing Farm Loans adjusted as provided in paragraph B.5(i) hereof, or (ii) the La Paz cost-of-living index published by hIstituto Nacional de Estadisticas or any successor thereto, every year starting one year after the date of the first disbursement under the Subsidiary Loan, provided that amounts of the Subsidiary Loan disbursed between such first disbursement and the first anniversary thereof, or between such anniversaries, will be adjusted for the time period between such disbursement and such anniversary and the corresponding adjustment will be added to the outstanding amount of the Subsidiary Loan on such anniversary, such adjustment to be made on the portions of the Subsidiary Loan utilized for refinancing Farm Loans adjusted as provided in paragraph B.5(ii) hereof. 4. (a) The outstanding principal amount of the portions of the Subsidiary Loan utilized for refinancing Farm Loans under Part A(i), (ii) and (iii) of the Project will bear (i) no interest in the case of the portions of the Subsidiary Loan adjusted as provided in the preceding paragraph A.3(ii) hereof, and (ii) interest at the rate of 9% per annum in the case of the portions of the Subsidiary Loan adjusted as provided in the preceding paragraph A.3(i) hereof. 18 (b) The outstanding principal amount of the portions of the Subsidiary Loan utilized for refinancing Farm Loans under Part A(iv) and (v) of the Project will bear interest at the rate of 6% per annum. 5. Each Participating Bank will undertake to make Farm Loans in accordance with the provisions of paragraph B of this Schedule. 6. (a) Each Participating Bank will undertake that, unless the Association shall otherwise agree, any Farm Loan will be made on terms whereby the Participating Bank will obtain, by written contract with the Beneficiary or by other appropriate legal means, rights adequate to protect the interests of the Borrower, the Association and the Participating Bank, including the right of the Participating Bank to: (i) require the Beneficiary to carry out the Farm Plan with due diligence and efficiency and in accordance with appropriate technical, financial and agricultural practices and to maintain adequate records; (ii) require that (1) goods and services to be financed out of the proceeds of the Farm Loans be purchased through regular commercial channels, at a reasonable price, account being taken also of other relevant factors such as time of delivery, efficiency and reliability of the goods and availability of service facilities and (2) the goods financed by the Farm Loan - be used exclusively in the carrying out of the Farm Plan; (iii) inspect, by itself or jointly with representatives of the Association if the Association shall so request, such goods and the farms and facilities included in the Farm Plan, the operation thereof, and any relevant records and documents; (iv) require that the Beneficiary shall take out and maintain with responsible insurers such insurance, against such risks and in such amounts, as shall be consistent with appropriate practice; (v) obtain all such information as the Association, the Borrower or the Participating Bank shall reasonably request relative to the foregoing and to the administration, operations and financial condition of the Beneficiary; and (vi) suspend and terminate the right of the Beneficiary to the use of the proceeds of the Farm Loan, and accelerate the maturity of the Farm Loan, upon failure by such Beneficiary to perform its obligations under its Farm Loan Agreement. (b) Each Participating Bank will exercise its rights in relation to each Farm Plan in such manner as to: (i) protect the interests of the Association, the Borrower and the Participating Bank; (ii) comply with its obligations under the Subsidiary Loan Agreement; and (iii) achieve the purposes of the Project. 7. Each Participating Bank will establish and maintain a separate account through which all amounts withdrawn from, and to be paid into, the Project Account by such Participating Bank will flow, such account to (i) identify each Farm Loan made by such Bank; (ii) identify the goods and services financed out 19 of each such Farm Loan; and (iii) reflect, in accordance with consistently maintained appropriate accounting practices, the administration of such account and of each such Farm Loan. 8. Each Participating Bank will have: (i) the account referred to in the preceding paragraph 7 for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (i) furnish to the Association as soon as available, but in any case not later than four months after the end of each such year, (A) certified copies of such account as so audited and (B) 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 to the Association such other information concerning such account and the audit thereof as the Association shall from time to time reasonably request. B. Farm Loan Agreements I. To qualify for the granting of a Farm Loan, each applicant will show to the satisfaction of the Participating Bank that he meets all such creditworthiness criteria as shall be reasonably established from time to time by the Participating Bank. No Farm Loan will be made (i) to any sugarcane farmer with a farm exceeding 50 hectares of area, and (ii) to any grape grower with a farm exceeding 4 hectares of area. 2. Farm Loans will be made on the basis of Farm Plans prepared by qualified technicians employed by the Participating Bank, such Plans to demonstrate, inter alia, the possibility of increased production and the Beneficiary's potential for repayment of the Farm Loan. 3. Farm Loans' under Part A(ii), (iii), (iv) and (v) of the Project will finance up to the total cost (excluding labor by members of the Beneficiary's family) of Farm Plans, and those under Part A(i) will finance up to 80% of the cost of Farm Plans. 4. Farm Loans will be denominated and repayable in the currency of the Borrower. 5. The outstanding principal amount of each Farm Loan under Part A(i), (ii) and (iii) of the Project will be adjusted by the Participating Bank, at the option of the Beneficiary, in the same proportion as the modification of either (i) the rate of exchange between the peso and the dollar, between the date of the first disbursement under the Farm Loan and whenever such modification shall occur, 20 or (ii) the La Paz cost-of-living index published by 1IstitUto Nacional de Estadisticas or any successor thereto, every year starting one year after the date of the first disbursement under the Farm Loan, provided that amounts of the Farm Loan disbursed between such first disbursement and the first anniversary thereof, or between such anniversaries, will be adjusted for the time period between such disbursement and such anniversary and the corresponding adjustment will be added to the outstanding amount of the Farm Loan on such anniversary. The foregoing option by the Beneficiary will be made at the date of the Farm Loan Agreement and will not be modified thereafter. 6. The adjusted outstanding principal amount of each Farm Loan under Part A(i), (ii) and (iii) of the Project will bear interest at the annual rate of (i) X4 in the case of Farm Loans adjusted as provided in the preceding paragraph B.5(i) hereof, and (ii) 40 in the case of Farm Loans adjusted as provided in the preceding paragraph B.5(ii) hereof. 7. The outstanding principal amount of each Farm Loan under Part A(iv) and (v) of the Project will bear interest at the rate of I20< per annum. 8. Repayment of the principal of, and payment of interest on, the Farm Loan will be made on the anniversaries of the first disbursement under the Farm Loan. The Farm Loans will be repaid over a period commensurate with the Beneficiary's estimated net income arising from the carrying out of his Farm Plan, including an appropriate grace period, provided that such periods will not exceed the following terms: Farm Loan Grace Period RepaYment Period Total (Part of the Projeet) (rears) (vears) (i?ears) Parl A(i) and (v) 4 8 12 Part A(ii) 3 3 6 Part A(iii) 4 4 8 Part A(iv) 2 2 4 9. Not more than 50' of the amount of any Farm Loan under Part A(i) of the Project may be used for the purchase of breeding cattle. 10. All cattle and sheep belonging to Beneficiaries will be periodically vaccinated against foot-and-mouth disease, paralytic rabies and brucellosis. 1 1. Any Farm Loan which by itself or together with any other loan to the same Beneficiary financed under this Development Credit Agreement or under any 21 other Development Credit Agreement between the Borrower and the Association shall exceed the equivalent of $50,000, will require the prior approval of the Association. 12. The staff of the Participating Bank will regularly visit the farms where Farm Plans have been financed by it to ensure that Beneficiaries are effectively and punctually carrying out such Plans and are complying with the provisions of their respective Farm Loan Agreements. 13. Participating Banks will also make to Beneficiaries additional short-term loans needed to satisfy the working capital requirements of such Beneficiaries for the carrying out of their Farm Plans.