Peru - Urban Sites And Services Development Project : Loan 1283 - Loan Agreement - Conformed

76-74 CONFORMED COPY LOAN NUMBER 1283 PE LOAN AGREEMENT (Urban Sites and Services Development Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and BANCO DE LA VIVIENDA DEL PERU Dated October 12, 1976 LOAN AGREEMENT AGREEMENT, dated October 12, 1976, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and BANCO DE LA VIVIENDA DEL PERU (hereinafter called the Borrower). -2- ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guar- antee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said Gen- eral Conditions Applicable to Loan and Guarantee Agreements of the Bank 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 Gen- eral Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "SINAMOS" means Sistema Nacional de Apoyo a la Moviliza- ci6n Social, or any successor thereto; (b) "Ministerio Vivienda" means Ministerio de la Vivienda Construcci6n of the Guarantor; (c) "Ministerio Salud" means Ministerio de Salud of the Guarantor; (d) "Technical Assistance Unit" means the technical assis- tance unit to be set up by the Guarantor within its Ministerio Vivienda in accordance with Section 3.03 of the Guarantee Agreement; -3- (e) "ESAL" means Empresa de Saneamiento de Lima, or any successor thereto; (f) "ESAR" means Empresa de Saneamiento de Arequipa, or any successor thereto; (g) "ELECTROPERU" means Electricidad del Pert, or any successor thereto; (h) "ELECTROLIMA" means Empress de Electricidad de Lima, or any successor thereto; (i) "SEAL" means Sociedad El4ctrica de Arequipa, Ltda., or any successor thereto; w () "EMADI" means Empresa de Administraci6n de Inmuebles del Peri, or any successor thereto; (k) "Revolving Fund" means the revolving fund referred to in Section 3.05 of this Agreement; (1) "Basic Laws" means the Ley de Creaci6n of the Borrower, contained in Decreto-Ley No. 14241 of November 21, 1962 and the Estatutos of the Borrower, contained in Resoluci6n Suprema of November 29, 1962, all as amended; (in) "Pueblos J6venes" means marginal urban settlements in Perd which have been granted legal status in accordance with the provisions of Ley No. 13,517, of February 14, 1961, and Decretos Supremos Nos. 014-68-JC, of August 2, 1968, and 014-69-VI, of July 4, 1969, all of the Guarantor; and (n) "soles" means the currency of the Guarantor. I -5- ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or refer- red to, an amount in various currencies equivalent to twenty-one million six hundred thousand dollars ($21,600,000). Section 2.02. The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Bank and the Borrower, for expendi- tures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Proj- 'Rw ect and to be financed out of the proceeds of the Loan. Section 2.03. Except as the Bank shall otherwise agree, the goods and works for the Project to be financed out of the proceeds of the Loan, shall be procured in accordance with the provisions of Schedule 4 to this Agreement. Section 2.04. The Closing Date shall be June 30, 1980 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower and the Guarantor of such later date. Section 2.05. 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. -6- Section 2.06. The Borrower shall pay interest at the rate of eight and eighty-five hundredths per cent (8.85%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semi-annually on June )5 and December 15 in each year. Section 2.08. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. ARTICLE III Execution of the Project Section 3.01. The Borrower shall carry out the Project, sub- stantially in accordance with an implementation schedule satis- factory to the Bank, with due diligence and efficiency and in conformity with appropriate administrative, financial and engi- neering practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. (a) The Borrower shall enter into a contract, satisfactory to the Bank, with SINAMOS to: (i) define in detail the responsibilities, functions and administrative procedures of the Borrower and SINAMOS in respect of the carrying out of the Project, and (ii) make available to SINAMOS such portion of the proceeds of the Loan as shall be necessary to ensure the partici- pation of SINAMOS in the carrying out of the Project. (b) The Borrower shall enter into contracts, satisfactory to the Bank, with Ministerio Vivienda, Ministerio Salud and any other ministries or agencies of the Guarantor which shall participate in the carrying out of the Project, to define in detail: (i) the responsibilities, functions and administrative procedures of the Borrower and Ministerio Vivienda, Ministerio Salud and any such other appropriate agencies of the Guarantor, respectively, in respect of the carrying out of the Project, (ii) where the Guar- antor shall bear the expenses under the Project, the mechanism and terms and conditions under which Ministerio Vivienda, 8- Ministerio Salud or any such other appropriate agencies of the Guarantor shall reimburse the Borrower for amounts disbursed by the Borrower for the Project, and (iii) where the Guarantor shall not bear the expenses under the Project, the terms and conditions under which the Borrower shall make available iunds to Ministerio Vivienda, Ministerio Salud or any such other appropriate agencies of the Guarantor, to cover expenses incurred or to be incurred by them in respect of the Project. (c) The Borrower shall enter into contracts, satisfactory to the Bank, with: (i) ESAL, ESAR, ELECTROPERU, ELECTROLIMA and SEAL, for the carrying out of Part D (a) (b) of the Project; and (ii) EMADI, for the carrying out of Part A (b) of the Project. (d) The contracts referred to in paragraph (c) above shall: (i) define in detail the responsibilities, functions and adminis- trative procedures of the Borrower and ESAL, ESAR, ELECTROPERU, ELECTROLIMA, SEAL and EMADI, respectively, for the carrying out of the Project, and (ii) include the making available to the entities in (d) (i) hereof of such portions of the proceeds of the Loan as shall be necessary to ensure their participation in the carrying out of Parts A (b) and D (a) (b) of the Project. -9- Section 3.03. The Borrower shall exercise its rights under the agreements referred to in Section 3.02 of this Agreement in such manner as to protect the interests of the Bank and the Bor- rower and to accomplish the purposes of the Loan, and except as the Bank shall otherwise agree, the Borrower shall not assign, nor amend, abrogate or waive such arrangements or any provision thereof. Section 3.04. (a) Except as the Bank shall otherwise agree, in the carrying out of Parts A (a), B and D (a) (b) of the Project the Borrower shall make loans to individuals participating in the Project, under terms and conditions satisfactory to the Bank, which shall include, inter alia, a repayment period between ten and twenty years, an annual interest at the rate of not less than twelve per cent (12%) per annum on the outstanding principal and an initial contribution, where applicable, of not less than five per cent (5%) of the principal amount. (b) The Borrower shall furnish to the Bank for its approval standard forms of the loan agreements to be used for lending to individuals under paragraph (a) above. Section 3.05. The Borrower shall: (a) establish and maintain, upon terms and conditions satis- factory to the Bank, a Revolving Fund in soles to be used exclu- sively for the carrying out of the Project; (b) keep in respect of the Revolving Fund separate records and accounts in accordance with Section 5.01 (b) of this Agree- ment; and - 10- (c) promptly deposit in the Revolving Fund: (i) an initial amount of twenty-two million five hundred thousand soles; (ii) such amounts in soles as shall be equivalent of the amounts withdrawn by the Borrower from the Loan Account in accordance with the pro- visions of Schedule 1 to this Agreement, de- termined as of the respective date of each withdrawal from the Loan Account; (iii) such amounts as shall be necessary, so that, on the first day of each calendar month there shall be available in the Revolving Fund amounts sufficient to meet, during the next W following three months, the expected financ- ing requirements of the Borrower under the Project not covered by its own resources; and (iv) such other amounts in soles which the Guarantor or the Borrower shall contribute to the Revolv- ing Fund. Section 3.06. The Borrower shall utilize all funds repaid by participating institutions under the contracts referred to in Section 3 02 of this Agreement and by individuals who have received loans in accordance with Section 3.04 of this Agreement, which are not needed immediately to make payments of principal, interest and other charges under the Loan, exclusively for fi- nancing, in Pueblos J6venes, projects similar to those included in the Project. - 11 - Section 3.07. (a) In order to assist the Borrower in the r carrying out of Part E (a) of the Project, the Borrower shall employ, within twelve months from the date of this Agreement, or such later date as shall be determined by the Ben6, consultants whose qualifications, experience and terms and conditions of em- ployment shall be satisfactory to the Bank. (b) The Borrower shall cause, in accordance with the pro- visions of the contracts referred to in Section 3.02 of this Agreement, the employment of consultants whose qualifications, experience and terms and conditions of employment shall be satis- factory to the Bank, by: (i) the Technical Assistance Unit, within six months from the date of this Agreement, or such later date as shall be determined by the Bank, for the carry- ing out of Part E (b) of the Project; (ii) EMADI, within twelve months from the date of this Agreement, or such later date as shall be deter- mined by the Bank, for the carrying out of Part E (c) of the Project; (iii) ESAR, within six months from the date of this Agree- ment, or such later date as shall be determined by the Bank, for the carrying out of Part E (d) of the Project; and (iv) Ministerio Salud, within six months from the date of this Agreement, or such later date as shall be - 12 - determined by the Bank, for the carrying out of Part E (e) of the Project. Section 3.08. (a) The Borrower shall insure or cause to be insured, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) Except as the Bank shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Loan to be used exclusively for the Project. Section 3.09. The Borrower shall: ' (a) monitor continuously the progress of the Project, in- cluding comparing such progress with the implementation schedule of the Project referred to in Section 3.01 of this Agreement, and shall periodically evaluate the effects of the Project; (b) prepare each semester progress and evaluation reports; and (c) furnish to the Bank the reports in (b) hereof within two months from the end of each such semester. Section 3.10. (a) The Borrower shall furnish, or cause to be furnished, to the Bank, promptly upon their preparation, the - 13 - plans, specifications reports, contract documents and construc- tion and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) The Borrower: (i) shall maintain, or cause to be main- tained, records adequate to record the progress of the Project (including the cost thereof) and to identify the goods, works and services financed out of the proceeds of the Loan, and to disclose the use thereof in the Project; (ii) shall maintain, or cause to be maintained, such detailed records as shall be neces- sary to enable the Borrower to monitor the progress, and evaluate the effects, of the Project; (iii) shall, without limitation upon the provisions of paragraph (c) of this Section, enable, or cause to be enabled, the Bank's representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Loan and any relevant records and documents; and (iv) shall furnish, or cause to be fur- nished, to the Bank all such information as the Bank shall rea- sonably request concerning the Project, the expenditure of the proceeds of the Loan and the goods, works and services financed out of such proceeds. (c) The Borrower shall enable the Bank's representatives to examine all buildings, property, works and equipment of the Borrower and any relevant records and documents. Section 3.11. The Borrower shall take, or cause to be taken, all such action as shall be necessary to acquire as and when needed all such land, and rights in respect of land as shall be required for carrying out the Project. ARTICLE IV Management ,nd Operations of the Borrower Section 4.01. The Borrower shall at all times manage its af- fairs, maintain its financial position, plan its future expansion and carry on its operations, all in accordance with appropriate business, financial, administrative and engineering practices and under the supervision of experienced and qualified management as- sisted by adequate, experienced and qualified staff. Section 4.02. (a) The Borrower shall maintain an organization, including credit and technical departments, for the execution of the Project, satisfactory to the Bank, and shall afford the Bank a reasonable opportunity to comment on any proposed reorganization which may affect the carrying out of the Project. (b) The Borrower shall employ, in its technical department, not less than four additional technicians whose qualifications and experience shall be satisfactory to the Bank. Section 4.03. The Borrower shall take out and maintain with responsible insurers, or make other provisions satisfactory to the Bank for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. - 15 - ARTICLE V Financial Covenants Section 5.01. (a) The Borrower shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. (b) The Borrower shall establish and maintain separate ac- counts on its records to be used exclusively for the Project and shall register in such accounts all receipts and payments for or in connection with the Project, in accordance with appropriate ac- counting practices consistently applied. ak Section 5.02. (a) The Borrower shall: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with sound 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, (A) certified copies of its finan- cial statements 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 Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning the accounts and financial statements of the Borrower and the audit thereof as the Bank shall from time to time reasonably request. (b) Notwithstanding the provisions of paragraph (a) of this Section, the Borrower shall furnish to the Bank, as soon as avail- - 16 - able, but in any case not later than three months after the end of each of the Borrower's fiscal years, certified copies of its unau- dited financial statements. Section 5.03. (a) The Borrower represents that at the date of this Agreement no lien exists on any of its assets as security for any debt. (b) The Borrower undertakes that, except as the Bank shall otherwise agree: (i) if the Borrower shall create any lien on any of its assets as security for any debt, such lien will equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan, and in the creation of any such lien express provision will be made to that effect, at no cost to the Bank; and (ii) if any statutory lien shall be created on any assets of the Borrower as security for any debt, the Borrower shall grant, at no cost to the Bank, an equivalent lien satisfactory to the Bank to secure the payment of the principal of, and interest and other charges on, the Loan; provided, however, that the foregoing provi- sions of this paragraph shall not apply to: (A) any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property; or (B) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after the date on which it is originally incurred. - 17 - ARTICLE VI Remedies of the Bank Section 6.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified: (a) the Borrower or any agency or entity with which the Bor- rover shall have entered into a contract pursuant to Section 3.02 of the Loan Agreement shall have failed to perform any of its re- spective obligations under the Loan Agreement or any such agreement; (b) an extraordinary situation shall have arisen which shall make it improbable that the Borrower or any of such agencies or -. entities will be able to perform any of its respective obligations ' under the Loan Agreement or any such agreement; (c) the Guarantor or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of the Borrower or any of such agencies or entities or for the suspension of its operations which shall adversely affect the carrying out of the Project; (d) the Guarantor or any other authority having jurisdiction shall divest the Borrower or any of such agencies or entities of any of the functions or powers vested in any of them as of the date of this Agreement, which are necessary for the efficient carrying out of the Project; and - 18 - (e) the Basic Laws of the Borrower or any provision thereof shall have been amended, suspended or abrogated so as to affect adversely the performance by the Borrower of its obligations under the Loan Agreement. Section 6.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified, namely, any of the events specified in paragraphs (a), (c), (d) and (e) of Section 6.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Bank to the Borrower. - 19 - ARTICLE VII Effective Date; Termination Section 7.01. 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 Technical Assistance Unit has been established to the satisfaction of the Bank; (b) the Revolving Fund has been established and the initial deposit referred to in Section 3.05 (c) (i) of this Agreement has been made; and (c) the technicians referred to in Section 4.02 (b) of this Agreement have been appointed. Section 7,02. The date January 10, 1977 is hereby specified for the purposes of Section 12.04 of the General Conditions. -20- ARTICLE VIII Addresses Section 8.01. The following addresses are specified for the purposes of Section 1.01 of the General Conditions: 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 440098 (ITT), Washington, D.C. 248423 (RCA) or 64145 (wUI) For the Borrower: Banco de la Vivienda del Peru camant 488 Lima 1, Perfi Cable address: Telex: BANCOVIVIENDA BANVIPE 20077 Lima - 21 - IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agree- ment 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. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ S.M.L. van der Meer Acting Regional Vice President Latin America and the Caribbean BANCO DE LA VIVIENDA DEL PERU By /s/ Raymundo Morales Urresti Authorized Representative By /s/ Victor Castro Munoz Authorized Representative - 22- SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be fi- nanced out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expendi- tures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil works 9,020,000 48% (2) Credit Program 1,770,000 50% of amounts (Part B of the disbursed by Project) Banco Vivienda to individuals participating in Part B of the Project (3) Vehicles and Equip- 6,110,000 100% of foreign ment (including expenditures spare parts thereof) or 100% of the ex-factory cost of locally manu- factured goods (4) Consultants' ser- 1,460,000 50% vices (5) Unallocated 3,240,000 TOTAL 21,600,000 - 23 - 2. For the purposes of this Schedule, the term "foreign expendi- tures" means expenditures in the currency of a country other than the Guarantor and for goods or services supplied from the territory of any country other than the Guarantor. 3. The disbursement percentages have been calculated in compliance with the policy of the Bank that no proceeds of the Loan shall be disbursed on account of payments for taxes levied by, or in the territory of, the Guarantor on goods or services, or on the impor- tation, 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 Loan decreases or increases, the Bank 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 Bank. 4. Notwithstanding the provisions of paragraph 1 above, no with- drawals shall be made in res;pect of payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of $100,000, may be made in respect of Category (4) on account of payments made for such expenditures before that date but after December 1, 1975. 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph 1 above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Bank may, by notice to the Borrower: (i) reallocate to such Category, - 24 - to the extent required to meet the estimated shortfall, proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures, and (ii) if such reallocation cannot fully meet the estimated short- fall, 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 Bank shall have reasonably determined that the procure- ment of any item in any Category i-. 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 Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such expendi- tures which would otherwise have been eligible for financing out of the proceeds of the Loan. -25- SCHEDULE 2 Description of the Project "he Project is an integral part of the Guarantor's program for providing the urban low-income groups with basic facilities and employment opportunities to increase their ability to be productively absorbed into the urban economy. The Project consists of the following Parts: Part A: Sites and Services (a) The preparation of, and provision of the necessary infra- structure such as water supply, sewerage facilities, electrical connections, public lighting, access roads and green areas for, about 706 plots for dwellings and 161 plots for shop-dwellings in the Fundo Vazquez area in Lima. (b) The development of about 50 hectares of land in the Villa El Salvador area in Lima and about 13.5 hectares of land in Arequipa for industrial sites by providing the necessary infrastructure such as water supply, sewerage facilities, electrical connections, public lighting, access roads and green areas, and the construction of a few standard factories and common services buildings. Part B: Credit Program (a) The provision of about 870 loans for self-help construc- tion of dwellings and shop-dwellings to individuals having acquired plots referred to in Part A (a) hereof. - 26 - (b) The provision of about 1,000 loans to low-income indivi- duals who own in Arequipa plots in Pueblos J6venes or in other areas approved by SINAMOS, to enable them to erect or upgrade modest shelter units through a program of mutual aid, 50% of such loans to be in building materials rather than cash. Part C: Community Facilities The construction and equipping of about seven community fa- cilities in the area referred to in Part A (a) hereof, including schools, a health post, a community center, a market and a recre- ational facility. Part D: Primary Infrastructure (a) Construction of water supply and sewerage facilities in four Pueblos J6venes in Lima and eight Pueblos Jvenes in Arequipa, consisting of the extension of water trunk lines, on-site water and sewerage reticulation and individual dwelling connections. (b) Construction of electric facilities, including distribu- tion networks and individual dwelling connections, and primary 10 kv networks, where necessary, to provide electricity to about 12,400 lots in Pueblos J6venes in Lima and 3,900 lots in Pueblos J6venes in Arequipa. (c) Improvement of about 86 kilometers of existing secondary road networks in eight Pueblos J6venes in Lima. - 27- (d) Construction and equipping of three health and nutrition centers and expansion (including equipment) of two existing health and nutrition centers in Pueblos J6venes in Lima. Part E: Technical Assistance The provision of technical services to: (a) the Borrower, for assisting it in the carrying out of the Project and in strengthening its capacity to promote future projects in the urban sector; (b) the Technical Assistance Unit, with regard to Parts A (a) and B (a) of the Project; (c) EMADI, with regard to Part A (b) of the Project; (d) ESAR, for assisting it in the review and preparation of a project that shall meet the future needs for water supply and sewerage in metropolitan Arequipa; and (e) the Ministerio de Salud, with regard to Part D (d) of the Project. T e * The Project is expected to be completed by December 31, 1979. - 28 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* December 15, 1979 280,000 June 15, 1980 300,000 December 15, 1980 310,000 June 15, 1981 325,000 December 15, 1981 335,000 June 15, 1982 355,000 December 15, 1982 370,000 June 15, 1983 385,000 December 15, 1983 00,ooo June 15, 1984 420,000 December 15, 1984 440,000 June 15, 1985 460,000 December 15, 1985 475,000 June 15, 1986 500,000 December 15, 1986 520,000 June 15, 1987 5459000 December 15, 1987 570,000 June 15, 1988 595,000 December 15, 1988 620,000 June 15, 1989 645,000 December 15, 1989 680,000 June 15, 1990 705,000 December 15, 1990 735,000 June 15, 1991 770,000 December 15, 1991 805,000 June 15, 1992 840,000 December 15, 1992 880,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. - 29 - Payment of Principal Date Payment Due (expressed in dollars)* June 15, 1993 915,000 December 15, 1993 955,000 June 15, 1994 1,000,000 December 15, 1994 1,040,000 June 15, 1995 1,090,000 December 15, 1995 1,135,000 June 15, 1996 1,200,000 To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. -30- Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions: Ti-:' of Prepayment Premium Not more than three years before maturity 1.35% More than three years but not more than six years before maturity 2.65% More than six years but not more than eleven years before maturity 4.85% More than eleven years but not more than sixteen years before maturity 7.10% More than sixteen years but not more than eighteen years before maturity 7.95% More than eighteen years before maturity 8.85% - 31 - SCHEDULE 4 Procurement A. General Procedures 1. (a) Except as provided in Part A.3 hereof, contracts for civil works included in Parts A and D of the Project and contracts for vehicles, equipment and materials shall be let under procedures consistent with those set forth in Part A of the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in August 1975 (hereinafter called the Guidelines), on the basis of international competitive bidding. (b) For bidding purposes, contracts included in this Part A shall be grouped, to the extent practicable, in such manner as shall be agreed between the Bank and the Borrower, prior to issu- ing the invitation to bid, so as to permit bulk procurement. 2. Bidders for civil works under Parts A and D of the Project shall be prequalified as described in paragraph 1.3 of Part A of the Guidelines. 3. Contracts for: (i) the purchase of water and electrical meters and other locally manufactured materials under Part A of the Project, provided the aggregate cost of such contracts shall not exceed the equivalent of $80,000; (ii) the purchase of building materials under Part B (b) of the Project; and (iii) the construction of electric facilities in Arequipa under Part D (b) of the Project, provided the aggregate cost of such contracts shall not exceed the equivalent - 32 - of $160,000, shall be awarded to domestic suppliers under local competitive bidding procedures satisfactory to the Bank. 4. Excavation for water pipes in areas included in Part A (a) of the Project and the execution of community facilities under Part C of the Project may be carried out through self-help labor. 5. The Borrower shall furnish to the Bank for its approval, prior to issuing the invitations to bid, a list of vehicles and equip- ment to be procured under the Project. B. Evaluation and Comparison of Bids for Goods For the purpose of evaluation and comparison of bids for the supply of goods: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for imported goods; (ii) customs duties and other import taxes on imported goods shall be excluded; and (iii) the cost of inland freight and other expendi- tures incidental to the delivery of goods to the place of their use or installation shall be included. C. Review of Procurement Decisions by Bank 1. Review of prequalification. The Borrower shall, before quali- fication is invited, inform the Bank in detail of the procedure to be followed and shall introduce such modifications in said pro- cedure as the Bank shall reasonably request. The list of prequali- fied bidders, together with a statement of their qualifications and of the reasons for the exclusion of any applicant for prequali- fication shall be furnished by the Borrower to the Bank for its review and comments before the applicants are notified. 1 -33 - 2. Review of invitation to bid and of proposed awards and final contracts: With respect to all contracts estimated to cost the equivalent of $150,000 or more: (a) Before bids are invited, the Borrower shall furnish to the Bank, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Bank shall reasonably request. Any further modification to the bidding documents shall require the Bank's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform the Bank of the name of the bidder to which it intends to award the contract and shall furnish to the Bank, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. (c) The terms and conditions of the contract shall not, with- out the Bank's concurrence, materiRlly differ from those on which bids were asked or prequalification invited. ~314 (d) Two conformed copies of the contract shall be furnished to the Bank promptly after its execution and prior to the delivery to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 3. With respect to each contract to be financed out of the pro- ceeds of the Loan and not governed by the preceding paragraph, the Borrower shall furnish to the Bank, promptly after its execution and prior to the delivery to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract, two conformed copies of such contract, together with the analysis of bids, recommendations for award and such other informa- tion as the Bank shall reasonably request. The Bank shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination.