Bolivia - Urban Development Project : Loan 1489 - Loan Agreement - 1 - Conformed

CONFORMED COPY LOAN NUMBER 1489 BO Loan Agreement (Urban Development Project) between REPUBLIC OF BOLIVIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated November 30, 1977 LOAN NUMBER 1489 BO LOAN AGREEMENT AGREEMENT, dated November 30, 1977, between REPUBLIC OF BOLIVIA (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS (A) the Borrower has requested the Bank to assist in the financing of the Project described in Schedule 2 to this Agreement by making the Loan as hereinafter provided; (B) the Project will be carried out by Consejo Nacional de Vivienda, Honorable Alcaldia Municipal de La Paz, Banco Industrial S.A., Banco de la Vivienda and the Borrower's Ministry of Health, respectively, with the Borrower's assistance and, as part of such assistance, the Borrower will make available to said entities the proceeds of the Loan as hereinafter provided; and WHEREAS the Bank has agreed, on the basis inter alia of the foregoing, to make the Loan available to the Borrower upon the terms and conditions set forth hereinafter and in project agreements of even date herewith between the Bank and Consejo Nacional de Vivienda, Honorable Alcaldia Municipal de La Paz, Banco Industrial S.A. and Banco de la Vivienda, respectively; 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 Loan and Guarantee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General 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 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: -2- (a) "CONAVI" means Consejo Nacional de Vivienda, an autonomous decentralized public institution under the Borrower's Ministry of Urbanization and Rousing, established by Decreto Supremo No. 06816 of July 3, 1964 and operating pursuant to its statutes approved by Decreto Supremo No. 11566 of June 28, 1974; (b) "HAM" means Honorable Alcaldia Municipal de La Paz, the Municipality of La Paz, an autonomous entity established under title 6 (Articles 200 through 205 thereof) of the Borrower's Con- stitution and which operates in accordance with the Borrower's Law of Municipalities of December 2, 1942, as amended to August 8, 1977 (hereinafter called the Law of Municipalities); (c) "BANVI" means Banco de la Vivienda, a mixed economy corporation, established by Decreto Ley No. 11308 of January 23, 1974 and operating pursuant to its statutes approved by Resolution No. 58 of September 11, 1974; (d) "BISA" means Banco Industrial S.A., a bank established under Decreto Ley No. 06213 of September 12, 1962, of the Borrower on industrial banks and operating under the laws of the Borrower; (e) "Executing Agencies" means the agencies and legal enti- ties defined in paragraphs (a) to (d) of this Section; (f) "CONAVI Project Agreement" means the agreement between the Bank and CONAVI of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the CONAVI Project Agreement and all agreements supplemental to the CONAVI Project Agreement; (g) "HAM Project Agreement" means the agreement between the Bank and HAM of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the HAM Project Agreement and all agreements supplemental to the HAM Project Agreement; (h) "BANVI Project Agreement" means the agreement between the Bank and BANVI of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the BANVI Project Agreement and all agreements supplemental to the BANVI Project Agreement; (i) "BISA Project Agreement" means the agreement between the Bank and BISA of even date herewith, as the same may be -3- amended from time to time, and such term includes all schedules to the BISA Project Agreement and all agreements supplemental to the BISA Project Agreement; (j) "Project Agreements" means the agreements defined in paragraphs (f) to (i) of this Section; (k) "CONAVI Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and CONAVI pursuant to Section 3.01 (c) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the CONAVI Subsidiary Loan Agreement; (1) "HAM Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and HAM pursuant to Section 3.01 (d) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the HAM Subsid- iary Loan Agreement; (m) "BISA Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and BISA pursuant to Section 3.01 (e) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the BISA Subsid- iary Loan Agreement; (n) "Subsidiary Loan Agreements" means the agreements defined in paragraphs (k) to (m) of this Section; (0) "Financing and Fiscal Agency Agreement" means the agree- ment to be entered into between the Borrower and BANVI pursuant to Section 3.01 (f) of this Agreement, as the same may be amended from time to time; and (p) "SAMAPA" means Servicio Aut6nomo Municipal de Agua Potable y Alcantarillado, an autonomous decentralized agency of HAM established by Decreto Ley No. 07597 of April 20, 1966, and operating pursuant to its statutes issued on December 22, 1966 by Resoluci6n Suprema No. 143294. 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 -4- referred to, an amount in various currencies equivalent to seventeen million dollars ($17,000,000). 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 Borrower and the Bank, 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 Project and to be financed out of the proceeds of the Loan. Section 2.03. Except as the Bank shall otLerwise agree, con- tracts for the purchase of goods or for civil works 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, 1983 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.05. The Borrower shall pay to the Bank a commit- ment 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 2.06. The Borrower shall pay interest at the rate of eight per cent. (8%) 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-anually on April 1 and October 1 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. Section 2.09. The following entities are designated as repre- sentatives of the Borrower for the purposes of taking any action required or ,rmitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions: (i) BANVI with regard to Parts A, B, C and E of the Project; and (ii) BISA with regard to Part D of the Project. -5- ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out Part E.5 of the Project by its Ministry of Health with due diligence and effi- ciency and in conformity with appropriate administrative and financial 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 Loan Agreement, the Borrower shall cause the Executing Agencies to perform in accordance with the provisions of their respective Project Agreements all the obliga- tions therein set forth, shall take or cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable the Executing Agencies to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (c) The Borrower shall make available to CONAVI the equiva- lent of $9,470,000 of the proceeds of the Loan, required for the carrying out of Part A of the Project, under a subsidiary loan agreement to be entered into between the Borrower and CONAVI, under terms and conditions which shall have been approved by the Bank (including inter alia an interest rate of 8-1/4% per annum, and a repayment period of twenty (20) years including a grace period of five (5) years). (d) The Borrower shall make available to HAM the equivalent of $3,030,000 of the proceeds of the Loan, required for the car- rying out of Parts B and C of the Project, under a subsidiary loan agreement to be entered into between the Borrower and HAM, under terms and conditions which shall have been approved by the Bank (including inter alia an interest rate of 8-1/4% per annum, and a repayment period of twenty (20) years including a grace period of five (5) years). (e) The Borrower shall relend to BISA the equivalent of $2,550,000 of the proceeds of the Loan, required for the carrying out of Part D of the Project, under a subsidiary loan agreement to be entered into between the Borrower and BISA, under terms and conditions which shall have been approved by the Bank (including -6- inter alia an interest rate of 8-1/4% per annum, and a repayment period of twenty (20) years including a grace period of five (5) years). (f) The Borrower shall: (i) make available to BANVI the equivalent of $1,950,000 of the proceeds of the Loan, required for Part E of the Project; and (ii) appoint BANVI as its fiscal agent for the funds allocated for Parts A, B, C and E of the Project, under a financing and fiscal agency agreement to be entered into between the Borrower and BANVI, under terms and conditions which shall have been approved by the Bank. (g) The Borrower shall exercise its rights under the Sub- sidiary Loan Agreements and the Financing and Fiscal Agency Agree- ment in such manner as to protect the interests of the Borrower and the Bank 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 any of the Subsidiary Loan Agreements or the Financing and Fiscal Agency Agreement or any provision thereof. (h) Without limitation upon the generality of the provisions of paragraph (b) of this Section, the Borrower shall provide out of its own resources: (i) the funds required by CONAVI and HAM in addition to the proceeds of the Loan for the construction of off- site infrastructure and community facilities, such as community centers, day-care facilities, and recreational spaces, included in Parts A and B of the Project; and (ii) the equivalent of $100,000 to BANVI as compensation for the services to be performed by BANVI under the Financing and Fiscal Agency Agreement. Section 3.02. For the purpose of advising the Borrower on the coordination of the execution of the several parts of the Project by the Executing Agencies and the Ministry of Health, respec- tively, the Borrower shall maintain the Coordinating Commission (Comisi6n Coordinadora) under the chairmanship of the Under- secretary of Coordination of the Ministry of Planning and Coordi- nation. Section 3,3. (a) The Borrower shall make adequate provision for the insuraice, in a currency freely usable by the Borrower, of the imported Aoods for Part E.5 of the Project to be financed out of the proceeds of the Loan against hazards incident to the acqui- sition, trausportation and delivery thereof to the place of use or installation. -7- (b) Except as the Bank shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Loan for Part E.5 of the Project to be used exclusively for Part E.5 of the Project. Section 3.04. (a) The Borrower shall furnish to the Bank, promptly upon their preparation, the plans, specifications, reports, contract documents and work and procurement schedules for Part E.5 of the Project, and any mterial modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) The Borrower: (i) shall maintain records adequate to record the progress of Part E.5 of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Loan, and to disclose the use thereof in Part E.5 of the Project; (ii) shall enable the Bank's accredited repre- sentatives to examine the goods financed out of the proceeds of the Loan and any records and documents relevant to Part E.5 of the Project; and (iii) shall furnish to the Bank all such information as the Bank shall reasonably request concerning Part E.5 of the Project, the expenditure of the proceeds of the Loan allocated to such part of the Project and the goods and services financed out of such proceeds. ARTICLE IV Other Covenants Section 4.01. (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, in normal circumstances, special security from the member concerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distribution of for- eign exchange held under the control or for the benefit of such member. To that end, if any lien shall be created on any public assets (as hereinafter defined), as security for any external debt, which will or might result in a priority for the benefit of the creditor of such external debt in the allocation, realization or distribution of foreign exchange, such lien shall, unless the Bank shall otherwise agree, ipso facto and at no cost to the Bank, equally and ratably secure the principal of, and interest and other charges on, the Loan, and the Borrower, in creating or per- mitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional -8- or other legal reason such provision cannot be made with respect to any lien created on assets of any of its political or adminis- trative subdivisions, the Borrower shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, the Loan by an equivalent lien on other public assets satisfactory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (c) As used in this Section, the term "public assets" means assets of the Borrower, of any political or administrative subdi- vision thereof and of any entity owned or controlled by, or oper- ating for the account or benefit of, the Borrower or any such sub- division, including gold and other foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Bor- rower. Section 4.02. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consis- tently maintained sound accounting practices the operations, resources and expenditures, in respect of Part E.5 of the Project, of the Borrower's Ministry of Health responsible for carrying out Part E.5 of the Project. Section 4.03. The Borrower shall take all action necessary on its part to ensure that adequate quantities of water will be provided by SAMAPA to the areas included in Parts A and B of the Project as and when needed. Section 4.04. The Borrower shall at all times adequately maintain, and provide the required staff for, the facilities (inter alia schools and health units) established under the Project. Section 4.05. The Borrower shall establish and operate a guarantee system satisfactory to the Bank to provide coverage to BISA for any credit risk in its term lending to artisans and small-scale enterprises pursuant to Part D of the Project. The Borrower shall compensate BISA out of such system for up to 85% of -9- any loss due to a default on a loan made pursuant to Part D of the Project, provided, however, that in the aggregate such compensa- tion shall not exceed 30% of all such term lending then outstand- ing or the equivalent of $300,000, whichever shall be smaller. ARTICLE V Remedies of the Bank Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) The Borrower, CONAVI, HAM, BISA or BANVI, as the case may be, shall have failed to perform any of their respective covenants, agreements or obligations under the CONAVI Project Agreement, CONAVI Subsidiary Loan Agreement, HAM Project Agree- ment, HAM Subsidiary Loan Agreement, BISA Project Agreement, BISA Subsidiary Loan Agreement, BANVI Project Agreement or the Financ- ing and Fiscal Agency Agreement, as the case may be. (b) An extraordinary situation shall have arisen which shall make it improbable that the Borrower, CONAVI, HAM, BISA or BANVI, as the case may be, shall be able to perform their respec- tive obligations under the CONAVI Project Agreement, CONAVI Subsidiary Loan Agreement, HAM Project Agreement, HAM Subsidiary Loan Agreement, BISA Project Agreement, BISA Subsidiary Loan Agreement, BANVI Project Agreement or the Financing and Fiscal Agency Agreement, as the case may be. (c) The Decreto Supremo No. 06816 or the Decreto Supremo No. 11566 shall have been amended, suspended, abrogated, repealed or waived in such a way as to materially and adversely affect the ability of CONAVI to carry out the covenants, agreements and obligations set forth in the CONAVI Project Agreement or the CONAVI Subsidiary Loan Agreement. (d) The Borrower's Constitution or the Law of Municipalities or both shall have been amended, suspended, abrogated, repealed or waived in such a way as to materially and adversely affect the ability of HAM to carry out the covenants, agreements and obliga- tions set forth in the HAM Project Agreement or the HAM Subsidiary Loan Agreement. (e) The Decreto Leyr No. 06213 shall have been amended, suspended, abrogated, repealed or waived in such a way as to - 10 - materially and adversely affect the ability of BISA to carry out the covenants, agreements and obligations set forth in the BISA Project Agreement or the BISA Subsidiary Loan Agreement. (f) The Decreto Ley No. 11308 shall have been amended, suspended, abrogated, repealed or waived in such a way as to materially and adversely affect the ability of BANVI to carry out the covenants, agreements and obligations set forth in the BANVI Project Agreement or the Financing and Fiscal Agency Agreement. (g) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of any of the Executing Agencies or for the suspension of the respective operations of any such entity. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) the event specified in paragraph (a) of Section 5.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower, CONAVI, HAM, BISA or BANVI, as the case may be; and (b) any event specified in paragraphs (c), (d), (e), (f) or (g) of Section 5.01 of this Agreement shall occur. ARTICLE TI Effective Date; 1rmination Section 6.01. The following events are specified as addi- tional conditions to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions: (a) the execution of the CONAVI Project Agreement, HAM Project Agreement, BISA Project Agreement and BANVI Project Agreement on behalf of CONAVI, HAM, BISA and BANVI, respectively, has been duly authorized or ratified by all necessary corporate and governmental action; (b) the execution of the CONAVI Subsidiary Loan Agreement on behalf of the Borrower and CONAVI, respectively, the HAM Sub- sidiary Loan Agreement on behalf of the Borrower and HAM, respec- tively, and the BISA Subsidiary Loan Agreement on behalf of the Borrower and BISA, respectively, has been duly authorized or ratified by all necessary corporate and governmental action; and - 11 - (c) the execution of the Financing and Fiscal Agency Agree- ment on behalf of the Borrower and BANVI, respectively, has been duly authorized or ratified by all necessary corporate and govern- mental action. Section 6.02. The following are specified as additional mat- ters, within the meaning of Section 12.02 (c) of the General Con- ditions, to be included in the opinion or opinions to be furnished to the Bank: (a) that the CONAVI Project Agreement, HAM Project Agree- ment, BISA Project Agreement and BANVI Project Agreement have been duly authorized or ratified by CONAVI, HAM, BISA and BANVI, respectively, and are legally binding upon CONAVI, HAM, BISA and BANVI, respectively, in accordance with their respective terms; (b) that the CONAVI Subsidiary Loan Agreement, HAM Subsid- iary Loan Agreement and BISA Subsidiary Loan Agreement have been duly authorized or ratified by the Borrower and CONAVI, HAM and BISA, respectively, and are legally binding upon the Borrower and CONAVI, HAM and BISA in accordance with their respective terms; and (c) that the Financing and Fiscal Agency Agreement has been duly authorized or ratified by the Borrower and BANVI, respec- tively, and is legally binding upon the Borrower and BANVI in accordance with its terms. Section 6.03. The date February 28, 1978, is hereby specified for the purposes of Section 12.04 of the General Conditions. I ARTICLE VII Representatives of the Borrower; Addresses Section 7.01. The Ministro de Finanzas 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 - 12 - Cable address: Telex: MINFINANZAS BX 5332 La Paz 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) 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/ Alberto Crespo Gutierrez Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Suitbertus M.L. van der Meer Acting Regional Vice President Latin America and the Caribbean - 13 - 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 Category Dollar Equivalent) to be Financed (1) Equipment and vehicles (a) Part A of 125,000 100% of foreign the Project expenditures or 100% of ex- factory price of domesti- cally manufac- tured goods (b) Parts B and C 100,000 100% of foreign of the Project expenditures or 100% of ex- factory price of domesti- cally manufac- tured goods (c) Part E.5 of 175,000 100% of foreign the Project expenditures or 100% of ex- factory price of domesti- cally manufac- tured goods (2) Civil works and construction mate- rials credits (a) Part A of 8,230,000 77% the Project -14- Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (b) Parts B and C 2,530,000 77% of the Project (3) Design, engineering, supervision and management (a) Part A of 1,240,000 77% the Project (b) Parts B and C 500,000 77% of the Project (4) Technical assis- tance (a) Part E.1 of 150,000 100% the Project (b) Part E.2 of 500,000 100% the Project (c) Part E.3 of 150,000 100% the Project (d) Part E.4 of 500,000 100% the Project (e) Part E.5 of 250,000 100% the Project (5) Loans to artisans 2,550,000 84% of amounts and small-scale disbursed enterprises TOTAL 17,000,000 - 15 - 2. For the purposes of this Schedule, the term "foreign expendi- tures" 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. 3. The disbursement percentages have been calculated in compli- ance 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 tecritory 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 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 withdrawals shall be made in respect of payments made for: (a) expenditures prior to the date of this Agreement, except that withdrawals in an aggregate amount not exceeding the equiva- lent of $300,000 may be made in respect of Category (3) on account of payments made for such expenditures before that date but after February 1, 1977; and (b) expenditures in respect of Categories (1) and (2) on account of urban upgrading under Part B of the Project until the Bank has been furnished with evidence satisfactory to it that HAM has made arrangements to provide to the participants in the urban upgrading pursuant to Part B of the Project secure tenure with regard to their respective plots. 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in para- graph I above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insuffi- cient to finance the agreed percentage of all expenditures in that Category, the Bank may, by notice to the Borrower: (i) reallocate to such Category, 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 realloca- tion cannot fully meet the estimated shortfall, reduce the dis- bursement percentage then applicable to such expenditures in order - 16 - 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 pro- curement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expendi- tures 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 expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan. - 17 - SCHEDULE 2 Description of the Project The Project consists of the following parts: Part A Sites and Services (to be carried out by CONAVI) Development of about 2,525 serviced plots with core dwelling units, of community facilities, and of about 142 industrial/commercial plots in the El Alto area of La Paz, and provision of credits for construction materials, all as more fully described in Schedule 1 to the CONAVI Project Agreement. Part B Urban Upgrading (to be carried out by HAM) Provision of basic infrastructure and other urban services to about 4,500 families living in low-income areas of La Paz, and of credits for construction mate- rials, all as more fully described in Schedule 1 to the HAM Project Agreement. Part C: Retail Markets (to be carried out by HAM) Construction of five new retail food markets to serve low-income areas of La Paz, all as more fully described in Schedule 1 to the HAM Project Agreement. Part D: Credits for Artisans and Small-scale Enterprises (to be carried out by BISA) Provision of a special line of credit for artisans and small-scale enterprises designed to increase incomes and provide about 1,560 new jobs among low- income groups primarily in the areas covered by Part A and Part B hereof, all as more fully described in Schedule 1 of the BISA Project Agreement. Part E: Technical Assistance Provision of technical assistance to: 1. CONAVI to mechanize and computerize its administra- tive and accounting procedures and to develop new design and construction standards for low-cost housing and related infrastructure; - 18 - 2. HAM to process loan applications made under Part D of the Project, to train its staff and to analyze its socio-economic surveys; 3. BISA to manage the granting of loans, under Part D of the Project, to artisans and small-scale enterprises; 4. BANVI to strengthen its technical capacities, to support its project unit, to monitor and eval- uate the Project and to prepare similar urban development projects; and 5. Ministry of Health to prepare and carry out a health and nutrition program; all as more fully described in Schedule 1 to the respec- tive Project Agreements. The Project is expected to be completed by December 31, 1982. - 19 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each April 1 and October 1 beginning April 1, 1983 through April 1, 1997 565,000 On October 1, 1997 615,000 * 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 equiva- lents determined as for purposes of withdrawal. - 20 - 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: Time of Prepayment Premium Not more than three years before maturity 1.20% More than three years but not more than six years before maturity 2.40% More than six years but not more than eleven years before maturity 4.40% More than eleven years but not more than sixteen years before maturity 6.40% More than sixteen years but not more than eighteen years before maturity 7.20% More than eighteen years before maturity 8.00% - 21 - SCHEDULE 4 Procurement A. International Competitive Bidding Except as provided in Part B and/or D hereof, contracts for the purchase of goods or for civil works shall be procured in accordance with procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in March 1977 (hereinafter called the Guidelines) on the basis of international competitive bidding as described in Part A of the Guidelines. B. Other Procurement Procedures Contracts for civil works estimated to cost less than the equivalent of $250,000 for Parts A and C of the Project may be procured on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Bank. C. Evaluation and Comparison of Bids for Goods; Preference for Domestic Manufacturers 1. 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, or the ex-factory price for domestically-manufactured goods; (ii) customs duties and other import taxes on imported goods, and sales and similar taxes on domestically-supplied goods, shall be excluded; and (iii) the cost to the Borrower of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be included. 2. Goods manufactured in Bolivia may be granted a margin of preference in accordance with, and subject to, the following provisions: (a) All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the information required to establish the eligibility of a bid for such preference and the following methods and stages that will be followed in the evaluation and comparison of bids. (b) After evaluation, responsive bids will be classified in one of the following three groups: - 22 - (1) Group A: bids offering goods manufactured in Bolivia if the bidder shall have established to the satisfaction of the Borrower and the Bank that the manufacturing cost of such goods includes a value added in Bolivia equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in Bolivia. (3) Group C: bids offering any other goods. (c) All evaluated bids in each group shall be first compared among themselves, excluding any customs duties and other import taxes on goods to be imported and any sales or similar taxes on goods to be supplied domestically, to determine the lowest evaluated bid of each group. Such lowest evaluated bids shall then be compared with each other, and if, as a result of this compari- son, a bid from group A or group B is the lowest, it shall be selected for the award. (d) If, as a result of the comparison under paragraph (c) above, the lowest bid is a bid from group C, all group C bids shall be further compared with the lowest evaluated bid from group A after adding to the c.i.f. bid price of the imported goods offered in each group C bid, for the purpose of this further comparison only, an amount equal to (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in such group C bid; or (ii) 15% of the c.i.f. bid price of such goods if said customs duties and taxes exceed 15% of such price. If the group A bid in such further comparison is the lowest, it shall be selected for the award; if not, the bid from group C which as a result of the comparison under paragraph (c) is the lowest evaluated bid shall be selected. D. Procurement Without Contracting 1. Civil works included in Part B of the Project may be carried out by use of force account. 2. Notwithstanding the provisions set forth in Section B of this Schedule, civil works included in Part A of the Project may, with the prior approval of the Bank, be carried out by use of force account. - 23 - E. Review of Procurement Decisions by the Bank 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for civil works and equipment estimated to cost the equivalent of $50,000 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, together with the recommendations for award 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, without the Bank's concurrence, materially differ from those on which bids were asked or prequalification invited. (d) Two conformed copies of the contract shall be furnished to the Bank promptly after its execution and prior to the submis- sion to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 2. With respect to each contract to be financed out of the proceeds of the Loan and not governed by the preceding paragraph, the Borrower shall furnish to the Bank, promptly after its execu- tion and prior to the submission to the Bank of the first applica- tion for withdrawal of funds from the Loan Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids, recommendations for - 24 - award and such other information 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.