Conformed Copy - L3057 - Health Project - Loan Agreement

Page 1 CONFORMED COPY LOAN NUMBER 3057 TU Loan Agreement (Health Project) between REPUBLIC OF TURKEY and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated August 16, 1990 LOAN NUMBER 3057 TU LOAN AGREEMENT AGREEMENT, dated August 16 1990, between REPUBLIC OF TURKEY (the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank). WHEREAS the Borrower, having satisfied itself as to the fea- sibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Bank to assist in the financing of the Project; and WHEREAS the Bank has agreed, on the basis, inter alia, of the foregoing, to extend the Loan to the Borrower upon the terms and conditions set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Loan and Guarantee Agreements" of the Bank, dated January 1, 1985, with the Page 2 last sentence of Section 3.02 deleted (the General Conditions) constitute an integral part of this Agreement. Section 1.02. 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) "MOH" means the Ministry of Health of the Borrower; (b) "PCU" means the Project Coordination Unit, established within MOH; (c) "PCC" means the Project Coordination Committee referred to in Part A of Schedule 5 to this Agreement; (d) "Project Area" means the provinces of Ankara, Diyarbakir, Istanbul, Mardin, Mugla, Sivas, Tokat and Yozgat; (e) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement; (f) "Project Preparation Advance" means the project prepara- tion advance granted by the Bank to the Borrower pursuant to an exchange of letters dated December 2, 1987 and December 18, 1987 between the Borrower and the Bank; and (g) "Committees" means the Fellowship Selection Committee, the Management Information System Steering Committee and the Training Advisory Committee, referred to in Part A.2 of Schedule 5 to this Agreement. ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Loan Agreement, an amount in various currencies equivalent to seventy-five million dollars ($75,000,000). Section 2.02. (a) The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of works, goods and services required for the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Loan. (b) The Borrower shall, for the purposes of the Project, open and maintain in dollars a special account in its Central Bank on terms and conditions satisfactory to the Bank. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 6 to this Agreement. (c) Promptly after the Effective Date, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and pay to itself the amount required to repay the principal amount of the Project Preparation Advance withdrawn and outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advance shall thereupon be cancelled. Section 2.03. The Closing Date shall be December 31, 1997 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.04. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.05. (a) The Borrower shall pay interest on the Page 3 principal amount of the Loan withdrawn and outstanding from time to time at a rate per annum for each Interest Period equal to one half of one percent (1/2 of 1%) per annum above the Cost of Qualified Borrowings for the last Semester ending prior to the commencement of such Interest Period. (b) As soon as practicable after the end of each Semester, the Bank shall notify the Borrower of the Cost of Qualified Borrowings for such Semester. (c) For purposes of this Section: (i) "Interest Period" means the six-month period com- mencing on each date specified in Section 2.06 of this Agreement, including the Interest Period in which this Agreement is signed. (ii) "Cost of Qualified Borrowings" means the cost of the outstanding borrowings of the Bank drawn down after June 30, 1982, expressed as a percentage per annum, as reasonably determined by the Bank. (iii) "Semester" means the first six months or the second six months of a calendar year. Section 2.06. Interest and other charges shall be payable semiannually on May 15 and November 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement, and, to this end, shall carry out the Project through MOH with due diligence and efficiency and in conformity with appropriate financial, engineering, administrative and public health practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) Without limitation upon the provisions of paragraph (a) of this Section and except as the Borrower and the Bank shall otherwise agree, the Borrower shall carry out the Project in accordance with the Implementation Program set forth in Schedule 5 to this Agreement. Section 3.02. Except as the Bank shall otherwise agree, pro- curement of the goods, works and consultants, services required for the Project and to be financed out of the proceeds of the Loan shall be governed by the provisions of Schedule 4 to this Agreement. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project of the departments or agen- cies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall: (i) have the records and accounts referred to in paragraph (a) of this Section including those for the Special Account for each fiscal year audited, in accordance with appropriate auditing Page 4 principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year, the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank's representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, support the related withdrawals. ARTICLE V Termination Section 5.01. The date ninety (90) days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Undersecretary of the Treasury and Foreign Trade of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Basbakanlik Hazine Ve Dis Ticaret Mustesarligi Bakanliklar, Ankara Cable address: Telex: HAZINE, Ankara 821-42285 (MLYE-TR) or Page 5 821-42689 (ANK-TR) 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 197688 (TRT), Washington, D.C. 248423 (RCA), 64145 (WUI) or 82987 (FTCC) IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF TURKEY By /s/ F. Selekler Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ K. Dervis Acting Regional Vice President Europe, Middle East and North Africa 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) Works 9,000,000 18% (2) Equipment and 100% of foreign vehicles: expenditures 100% of local (a) equipment 43,000,000 expenditures (ex-factory (b) vehicles 9,000,000 cost) and 50% of local ex- penditures for other items pro- cured locally (3) Consultant's 5,400,000 100% services and Page 6 overseas fellow- ships (4) Local training, 3,000,000 80% including books and materials Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (5) Refunding of 600,000 Amount due pur- Project Prepara- suant to Section tion Advance 2.02 (c) of this Agreement (6) Unallocated 5,000,000 __________ TOTAL 75,000,000 ========== 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower. 3. Notwithstanding the provisions of paragraph 1 above, no with- drawals shall be made in respect of payments made for expenditures prior to the date of this Agreement. SCHEDULE 2 Description of the Project The objectives of the Project are: (i) to improve access to basic health services in the Project Area; (ii) to introduce mea- sures to improve efficiency in the delivery of health services and the management of the health sector; and (iii) to strengthen the technical and managerial capabilities of MOH. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Bank may agree upon from time to time to achieve such objectives: Part A: Provincial Health Services The reorganization and strengthening of the basic health services in the Project Area through: (1) the upgrading of about 620 health posts, 280 rural health centers, 140 urban health centers, 30 district hospitals, 8 provincial hospitals, 8 health colleges, and training centers; (2) the construction of about 100 health posts, 14 rural health centers, 69 urban health centers, 8 district hospitals, 2 public health laboratories, 2 vehicle maintenance workshops, 6 health colleges and 2 training centers; (3) the provision of equipment, furniture and vehicles for the health service facilities and of books and training materials for the health training colleges, referred to in paragraphs (1) and (2) above; and (4) the carrying out of in-service training programs to Page 7 upgrade the skills of personnel, provide induction training for staff assigned to the Project Area and increase community awareness of health related matters. Part B: Institutional Development Strengthening of the health sector's institutions and increasing the efficient use of its resources through: (1) the implementation of a manpower development program, including: (a) the revision, with the assistance of experts, of teacher training programs and the upgrading and equipping of the Gevher Nesibe Institute for Teacher Training; (b) the revision or design, with the assistance of experts, of curricula for nurses, midwives and technicians and the carrying out of programs for continuing education and short-term specialized courses; (c) the provision of local training and of overseas training fellowships for public health staff; and (d) the acquisition of textbooks, and reference manuals and copyrights for health colleges, and the translation and printing of health training and education materials; (2) the establishment of a management information system, comprising a statistical data base system, a hospital administration system, an equipment and vehicles control system, a financial management system, a personnel system, a PHC management system, an epidemiology system and a MCH-FP system; and (3) the implementation of a program to strengthen the capa- cities of health central institutions, including: (a) overseas fellowships and study tours and the provision of technical services to strengthen MOH's capacity in management, planning, monitoring and supervision; (b) studies and applied research, to be carried out with the assistance of experts; and (c) technical assistance to the PCU in technical matters related to Project execution. * * * The Project is expected to be completed by June 30, 1997. SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each May 15 and November 15 beginning November 15, 1994 through May 15, 2006 3,125,000