Conformed Copy - C1977 - Economic Management Strengthening Operation - Amendment 1

Page 1 October 4, 1993 Mr. Fernando Illanes Minister of Finance and Economic Development Ministry of Finance and Economic Development Avda. Arce No. 2147 La Paz, Bolivia RE: Dutch Grant Related to PPF Nos. 638-0-BO and 638-1-BO and to Credits Number 1809-BO, 1977-BO and 2092-130 Amendment to the Dutch Grant Agreement Dear Mr. Illanes: We refer to the Dutch Grant Agreement between the Republic of Bolivia and the International Development Association as Administrator of Grant Funds provided by the Minister for Development Cooperation of the Netherlands dated July 29, 1993 (the Dutch Grant Agreement). We are pleased to inform you that we agree with your Government's proposal to modify certain provisions of the Dutch Grant Agreement as follows: 1. Section 2.02 Paragraph (a): The words "the Schedule" are deleted and replaced by the words "Schedule 1"; Paragraph (b): Paragraph "(b)" is deleted and replaced by a n new paragraph "(b)" to read as follows: "(b) The Recipient shall, for the purposes of the Project, open and maintain in dollars in its Central Bank: (i) for expenditures related to the PPF, a special deposit account (the PPF Special Account); (ii) for expenditures related to the First IDA Agreement, a special deposit account (the First IDA Agreement Special Account); (iii) for expenditures related to the Second MA Agreement, a special deposit account (the Second IDA Agreement Special Account); and (iv) for expenditures related to the Third IDA Agreement, a special deposit account (the Third IDA Agreement Special Account); all on terms and conditions satisfactory to the Administrator. Deposits into, and payments out of the PPF Special Account, the First IDA Special Account, the Second IDA Special Account, and the Third IDA Special Account shall be made in accordance with the provisions of Schedule 2 to this Agreement". 2. Section 3.01. The words "Dutch Special Account" are deleted and replaced by "the PPF Special Account, the First IDA Agreement Special Account, the Second IDA Agreement Special Account, and the Third IDA Agreement Special Account (collectively, the Special Accounts)". 3. In Schedule 1 to the Dutch Grant Agreement, paragraph 2 (c) is amended by adding after the word "quality," and before the word "and" the following words: "and the cost of consultants (including fees, per them and travel expenses, and related materials and services) and logistical support for the preparation and dissemination of information and promotion of public discussion on topics related to education". 4. A new Schedule 2 is added as per Attachment I to this amendment letter. Page 2 Please confirm your agreement to the foregoing amendments by signing and dating both duplicate originals of this letter in the space provided below, and returning one of the duplicate originals to us at your earliest convenience. Sincerely, INTERNATIONAL DEVELOPMENT ASSOCIATION as Administrator of Grant Funds provided by the Minister for Development Cooperation of the Netherlands Yoshiaki Abe Country Director Latin America and the Caribbean Region Confirmed: REPUBLIC OF BOLIVIA By /s/ Fernando Illanes de la Rioa Authorized Representative Date: October 15, 1993 Attachment I SCHEDULE 2 Special Accounts 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Category (1) for the PPF Special Account, Category (2) for the First IDA Agreement special account, Category (3) for the Second IDA Agreement Special Account and Category (4) for the Third IDA Agreement Special Account, all as set forth in the table in paragraph 1 of Schedule 1 to this Agreement. (b) the term "eligible expenditures" means expenditures in respect of the reasonable cost of goods and services required for the Project and to be financed out of the amount of the Grant allocated from time to time to the eligible Categories In accordance with the provisions of Schedule 1 to this Agreement; (c) the term "PFF Authorized Allocation" means an amount equivalent to US$86,600 to be withdrawn from the Grant Account and deposited in the PPF Special Account pursuant to paragraph 3 (a) of this Schedule; (d) the term "First IDA Agreement Authorized Allocation" means an amount equivalent to US$48,200 to be withdrawn from the Grant Account and deposited in the First IDA Agreement Special Account pursuant to paragraph 3 (a) of this Schedule; (e) the term "Second IDA Agreement Authorized Allocation" means an amount equivalent to US$17,200 to be withdrawn from the Grant Account and deposited in the second IDA Agreement special Account pursuant to paragraph 3 (a) of this schedule; (f) the term "Third IDA Agreement Authorized Allocation" means an amount equivalent to US$7,000 to be withdrawn from the Dutch Account and deposited in the Third IDA Agreement Special Account pursuant to paragraph 3 (a) of this Schedule; and (g) the PPF Authorized Allocation, the First IDA Agreement Authorized Allocation, the Second IDA Agreement Authorized Allocation and the Third IDA Page 3 Agreement Authorized Allocation shall be collectively referred to as Authorized Allocations. 2. Payments out of the Special Accounts shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Administrator has received evidence satisfactory to it that the respective Special Accounts have been duly opened, withdrawals of the Authorized Allocations Of the Special Accounts so opened and subsequent withdrawals to replenish the respective Special Accounts shall be made as follows: (a) For withdrawals of the respective Authorized Allocations, the Recipient shall furnish to the Administrator a request or requests for a deposit or deposits which do not exceed the aggregate amount of the respective Authorized Allocations. On the basis of such request or requests, the Administrator shall, on behalf of the Recipient, withdraw from the Grant Account and deposit in the respective Special Accounts such amount or amounts as the Recipient shall have requested. (b) (i) For replenishment of the Special Accounts, the Recipient shall furnish to the Administrator requests for deposits into the respective. Special Accounts at such intervals as the Administrator shall specify. (ii) Prior to or at the time of each such request, the Recipient shall furnish to the Administrator the' documents and other evidence required pursuant to paragraph 4 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Administrator shall, on behalf of the Recipient, withdraw from the Grant Account and deposit into the respective Special Accounts such amount as the Recipient shall have requested and as shall have been shown by said documents and other evidence to have been paid out of the respective Special Accounts for eligible expenditures. All such deposits shall be withdrawn by the Administrator from the Grant Account under the respective eligible Categories, and in the respective equivalent amounts, as shall have been justified by said documents and other evidence. 4. For each payment made by the Recipient out of the respective Special Accounts, the Recipient shall, at such time as the Administrator shall reasonably request, furnish to the Administrator such documents and other evidence showing that such payment was made exclusively for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Schedule, the Administrator shall not be required to make further deposits into the respective Special Accounts: (a) if, at any time, the Administrator shall have determined that all further withdrawals should be made by the Recipient directly from the Grant Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or (b) once the total unwithdrawn amount of the Credit allocated to the respective eligible Categories, less the amount of any outstanding special commitment entered into by the Administrator pursuant to Section 5.02 of the General Conditions with respect to the Project, shall equal the equivalent of twice the amount of the respective Authorized Allocations. Thereafter, withdrawal from the Grant Account of the remaining unwithdrawn amount of the Grant allocated to the respective eligible Categories shall follow such procedures as the Administrator shall specify by notice to the Recipient. Such further withdrawals shall be made only after and to the extent that the Administrator shall have been satisfied that all such amounts remaining on deposit in the respective Special Accounts as of the date of such notice will be utilized in making payments for eligible expenditures. 6. (a) If the Administrator shall have determined at any time that any payment out of the respective Special Accounts: (i) was made for an expenditure or in an amount not eligible a pursuant to paragraph 2 of this Schedule; (ii) was not justified by the evidence furnished to the Administrator, the Recipient Page 4 shall, promptly upon notice from the Administrator: (A) provide such additional- evidence as the Administrator may request; or (3) deposit into the respective special Accounts (or, if the Administrator shall so request, refund to the Administrator) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. Unless the Administrator shall otherwise agree, no further deposit by the Administrator into the respective Special Accounts shall be made until the Recipient has provided such evidence or made such deposit or refund, as the case may be. (b) If the Administrator shall have determined at any time that any amount outstanding in the respective Special Accounts will not be required to cover further payments for eligible expenditures, the Recipient shall, promptly upon notice from the Administrator, refund to the Administrator such outstanding amount. (c) The Recipient may, upon notice to the Administrator, refund to the Administrator all or any portion of the funds on deposit in the respective Special Accounts. (d) Refunds to the Administrator made pursuant to paragraphs (a), (b) and (c) of this Schedule shall be credited to the Grant Account gar subsequent withdrawal or for cancellation in, accordance with the relevant provisions of this Agreement, including the General Conditions.