Conformed Copy - L3363 - Technical Assistance and Critical Imports Project - Amendment 2

Page 1 May 7, 1992 His Excellency The Minister of Economy and Finance Ministry of Economy and Finance 17 Apolodor Street Bucharest, Romania Excellency: Re: ROMANIA: Loan No. 3363 RO (Technical Assistance and Critical Imports Project) Amendment to the Loan Agreement Please refer to the Loan Agreement dated July 3, 1991, as amended (the Loan Agreement) between Romania (the Borrower) and the International Bank for Reconstruction and Development (the Bank) for the above referenced Project, and to the previous discussions between the Borrower and the Bank on the subject of amending the Loan Agreement to simplify the procedures for approving the financing of eligible expenditures thereunder. I am pleased to inform you that the Bank hereby agrees to amend the Loan Agreement as set forth in the Attachment to this letter. Kindly confirm your agreement, on behalf of the borrower, to the foregoing amendment by signing and dating the form of confirmation set forth on the enclosed duplicate original of this letter and returning it to us. Sincerely, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Authorized Representative Agreed and Confirmed by ROMANIA Attachment Amendment to the Loan Agreement Loan Number 3363 RO (Technical Assistance and Critical Imports Project) 1. The words "seventeen million four hundred thousand dollars ($17,400,000)" in WHEREAS (B) of the preamble are amended to read "thirty million dollars ($30,000,000)". 2. Section 1.02 is deleted and the following is substituted therefor: "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) "Special Accounts" means the accounts, referred to in Section 2.02 (b) of this agreement; (b) "Implementing Agencies" means the Borrower, departments, agencies, enterprises, and other entities responsible for the carrying out of the project, or any part thereof; Page 2 (c) "PIU" means the Project Implementation Unit established within the Borrower's Ministry of Economy and Finance pursuant to said Ministry's Ministerial Decision No. 233, dated April 15, 1991. (d) "Lei" means the currency of the Borrower; and (a) "Interbank Market Rate" means the foreign currency exchange rate for the convertibility of the Lei as established from time to time in accordance with the provisions of the Borrower's Law No. 15, dated 1990; 3. Section 3.02 is deleted and Sections 3.03 through 3.07 are renumbered as Sections 3.02 through 3.06. 4. In Section 3.02 (as renumbered pursuant to paragraph (3) hereof). (a) the words "the energy cost and pricing study referred to in Part B (4) (b) (i) of the Project" in paragraph (a) thereof are deleted and the words "an energy cost and pricing study, based on terms of reference satisfactory to the Bank' are substituted therefor; (b) the word "RAL's" in paragraph (b) thereof is deleted and the words "the Borrower's Autonomous Lignite Authority's" are substituted therefor; and (c) the words "the irrigation sector study referred to in Part B (6) of the Project" in paragraph (c) thereof are deleted and the words "an irrigation sector study, based on terms of reference satisfactory to the Bank" are substituted therefor. 5. The words "any goods provided under part 4 (c) of the Project in section 3.04 (as renumbered pursuant to paragraph (3) hereof) are deleted and the words "equipment spare parts and related materials for the deep-sea port of Constanza" are substituted therefor. 6. Sections 6.01 and 6.02 are deleted and Section 6.03 is renumbered as Section 6.01. 7. In Schedule 1 (a): the table set forth in paragraph 1 thereof is amended to read as follows: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent to be financed 1. Goods 151,100,000 100% of foreign expenditures 2. Consultants' 21,630,000 100% of foreign services and training expenditures 3. Unallocated 7,270,000 Total 180,000,000 (b) paragraph 3 thereof is amended to read as follows: "3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expenditures prior to the date of this agreement, except that Page 3 withdrawals, in an aggregate amount not to exceed the equivalent of $18,000,000, may be made on account of payments made for expenditures, before that date but after May 1, 1991." 8. Parts A, B and C of Schedule 2 are deleted and the following Parts are substituted therefor: "Part A: Provision of critical imports of equipment, spare parts and materials needed to maintain or restore output performance in the essential productive sectors of the economy. Part B: Provision of advisory and expert services, studies, computer hardware and software and personnel training needed for the formulation and implementation of strategies and policies to promote and accelerate the transition to a market economy." 9. Part B of schedule 5 is deleted and the following is substituted therefor: "B. Project Implementation 1. The Borrower shall, through its Ministry of Economy and Finance, make available the proceeds of the Loan to the Implementing Agencies for the carrying out of their activities under the Project. 2. The principle amount to be made available under paragraph 1 hereof to each Implementing Agency, which is a non-revenue earning department, agency or entity, shall be: (a) equal to the amount of the currency or currencies withdrawn from the Loan Account or paid out of the Special Accounts on account of the cost of goods and services financed out of the proceeds of the Loan for such Implementing Agency; and (b) made available on a grant basis through the normal budgetary allocations to said department, agency or entity. 3. The principal amount to be made available under paragraph 1 hereof to each Implementing Agency, which is a revenue earning enterprise or entity, shall be: (a) denominated in dollars or deutsche mark; (b) the equivalent in (i) dollars or deutsche mark (determined as of the date or respective dates of withdrawal from the Loan Account or payment out of the Special Account) of the value of the currency or currencies withdrawn from the Loan Account or paid out from the special accounts on account of the cost of goods and services financed out of the proceeds of the Loan for such Implementing Agency; (c) made for a period not exceeding 10 years, inclusive of a grace period not exceeding three years; and (d) charged, on the amounts thereof withdrawn and outstanding from time to time, interest at a rate per annum equal at least to: (i) the dollar six- month London Interbank Offered Rate plus one and one- half percentage points, or (ii) the deutsche mark six- month Frankfurt Interbank Market Rate plus one and one- half percentage points. 4. Before making available any part of the proceeds of the Loan to any Implementing Agency pursuant to the provisions of this Part, the Borrower shall furnish to the Bank, for its approval, an application, in form satisfactory to the Bank, together with: (a) a description of the Implementing Agency and of the expenditures proposed to be financed out of the proceeds of the Loan; (b) the terms and conditions under which the proceeds of the Loan will be made available to such Page 4 Implementing Agency; and (c) such other information as the Bank shall reasonably request. 5. No expenditures shall be eligible for financing out of the proceeds of the Loan unless the Bank shall have received and approved the application and information required under paragraph 4 hereof." 10. Schedule 7 is deleted.\1a