Bolivia - Development Project : Credit 2531 - Credit Agreement - Conformed

CREDIT NUMBER 2531 BO Development Credit Agreement (Integrated Child Development Project) between REPUBLIC OF BOLIVIA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1994 CREDIT NUMBER 2531 BO DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated 2fAk- CA , 1994, between REPUBLIC OF BOLIVIA (the Borrower) abd INTERNATIONAL DEVELOPMENT ASSOCIATION (the Association). WHEREAS: (A) the Borrower, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Association to assist in the financing of the Project; and (B) the Borrower intends to obtain from bilateral and multilateral aid and development organizations loans and grants to assist in the carrying out of the Project (the External Assistance) on the terms and conditions set forth in agreements to be entered into among the Borrower and such organizations; WHEREAS the Association has agreed, on the basis, inter alia, of the foregoing, to extend the Credit 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 Development Credit Agreements" of the Association, dated January 1, 1985, with the 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 and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Administrative Manual" means the ONAMFA' s (as hereinafter defined) Manual Administrativo, dated May 1993, approved by the ONAMFA's Administrative Resolution 1010/93, of June 1, 1993, as the same may be amended from time to time with the agreement of the Association; (b) "CDD" means the ONAMFA's (as hereinafter defined) Child Development Department, an administrative structure created for the - 2 - purposes of implementing the PIDI (as hereinafter defined) and the Project; (c) "CDD Regional Office" means an administrative structure under CDD to be created pursuant to Section 3.04 (a) of this Agreement for the purposes of coordinating and supervising the implementation of the PIDI (as hereinafter defined) and of Part B of the Project in a particular region; (d) "Civil Servant Agreement" means any of the agreements referred to in Section 3.04 (d) of this Agreement; (e) "CSRP" means the Borrower's Civil Service Reform Program, a program created by the Borrower's Decreto Supremo 23336, of November 1992; (f) "CSRP-ONAMFA Arrangements" means the arrangements between the Borrower's Ministry of Finance and ONAMEA (as hereafter defined), dated January 18, 1993, providing for the incorporation of ONAMFA in the CSRP; (g) "Day-care Center" means each of the households in a community participating in the carrying out of Part B of the Project; (h) "External Supervisor" means any of the persons to be contracted pursuant to Section 3.04 (c) of this Agreement; (i) "Health Fund" means the fund to be created by the Borrower, through ONAMFA (as hereafter defined), pursuant to Section 3.07 (a) of this Agreement; (j) "Health Grant" means any of the grants to be made by the Borrower, through ONAMFA (as hereinafter defined), pursuant to Section 3.07 (b) of this Agreement; (k) "IHS" means an integrated household survey carried out annually by the Borrower; (1) "Implementation Indicators" means the Project's implementation indicators set forth in Schedule 6 to this Agreement; (m) "Manuals" means the Administrative Manual and the Operations Manual (as hereinafter defined) or any of them; (n) "ONAMFA" means Organismo Nacional del Menor, Muier y Familia, created by the Borrower's law 1403, of December 18, 1992 (C6digo del Menor) and regulated by the Borrower's Supreme Decree 23469, of April 7, 1993; (0) "ONAMPA-Health Center Arrangements" means each of the arrangements referred to in Section 3.10 of this Agreement; (p) "ONAMFA-MPSSP Arrangement" means the arrangement dated June 1, 1993 between ONANFA and the Borrower's Ministerio de Previsi6n Social X Salud PCiblica, providing for the delivery of health services by the latter to children in the Day-care Centers, their pregnant mothers and pregnant caregivers of the Day-care Centers; (q) "ONAMFA Positions" means the managerial and technical staff positions in ONAMFA listed in Schedule 4 to this Agreement; (r) "Operations Manual" means the ONAMFA's Manual de Normas i Procedimientos, dated May 1993, approved by the ONAMFA's Administrative Resolution 1009/93, of June 1, 1993, as the same may be amended from time to time with the agreement of the Association; (s) "PIDI" means the Borrower's ProVecto Integral de Desarrollo Infantil, the program to provide integrated child development services approved by the Borrower's Supreme Decree 23415, of March 5, 1993; (t) "Project Preparation Advance" means the project preparation advance granted by the Association to the Borrower pursuant to an exchange of letters dated August 21, 1992 and August 26, 1992 between the Borrower and the Association; (u) "Rehabilitation Fund" means the revolving fund to be created by the Borrower, through ONAMFA, pursuant to Section 3.08 (a) of this Agreement, to provide Rehabilitation Grant-Loans; (v) "Rehabilitation Grant-Loan" means each of the joint grants and loans referred to in Section 3.08 (a) of this Agreement; (w) "Rehabilitation Agreement" means each of the agreements referred to in Section 3.08 (b) of this Agreement; and -4- (x) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Development Credit Agreement, an amount in various currencies equivalent to thirty-five million, eight hundred thousand Special Drawing Rights (SDR 35,800,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule 1 to this Agreement for expenditures made (or, if the Association 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 Credit. (b) The Borrower shall, for the purposes of the Project, open and maintain in Dollars a special deposit account in its Central Bank on terms and conditions satisfactory to the Association. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 3 to this Agreement. (c) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit 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, 1999 or such later date as the Association shall establish. The Association shall promptly notify the Borrower of such later date. Section 2.04. (a) The Borrower shall pay to the Association a commitment charge on the principal amount of the Credit not withdrawn from time to time at a rate to be set by the Association as of June 30 of each year, but not to exceed the rate of one-half of one percent (1/2 of 1%) per annum. -5- (b) The commitment charge shall accrue: (i) from the date sixty days after the date of this Agreement (the accrual date) to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or cancelled; and (ii) at the rate set as of the June 30 immediately preceding the accrual date or at such oLher rates as may be set from time to time thereafter pursuant to paragraph (a) above. The rate set as of June 30 in each year shall be applied from the next payment date in that year specified in Section 2.06 of this Agreement. (c) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without restrictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.05. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.06. Commitment charges and service charges shall be payable semiannually on April 1 and October 1 in each year. Section 2.07. (a) Subject to paragraphs (b) and (c) below, the Borrower shall repay the principal amount of the Credit in semi- annual installments payable on each April 1 and October 1 commencing October 1, 2003 and ending April 1, 2033. Each installment to and including the installment payable on April 1, 2013 shall be one percent (1%) of such principal amount, and each installment thereafter shall be two percent (2%) of such principal amount. (b) Whenever: (i) the Borrower's gross national product per capita, as determined by the Association, shall have exceeded $790 in constant 1985 dollars for five consecutive years; and (ii) the Bank shall consider the Borrower creditworthy for Bank lending, the Association may, subsequent to the review and approval thereof by the Executive Directors of the Association and after due consideration by them of the development of the Borrower's economy, modify the terms of repayment of installments under paragraph (a) above by requiring the Borrower to repay twice the amount of each such installment not yet due until the principal amount of the Credit shall have been repaid. If so requested by the Borrower, the -6- Association may revise such modification to include, in lieu of some or all of the increase in the amounts of such installments, the payment of interest at an annual rate agreed with the Association on the principal amount of the Credit withdrawn and outstanding from time to time, provided that, in the judgment of the Association, such revision shall not change the grant element obtained under the above-mentioned repayment modification. (c) If, at any time after a modification of terms pursuant to paragraph (b) above, the Association determines that the Borrower's economic condition has deteriorated significantly, the Association may, if so requested by the Borrower, further modify the terms of repayment to conform to the schedule of installments as provided in paragraph (a) above. Section 2.08. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.09. The President of ONAMFA, or any person thereunto authorized in writing by such representative, is designated as representative of the Borrower for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. 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 ONAMFA with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering, social, health, nutrition, educational and environmental practices, the Manuals and the Implementation Indicators and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) Without limitation to its obligations under paragraph (a) above, the Borrower shall: (i) enter into arrangements with ONAMFA, satisfactory to the Bank, for the purposes of the carrying out of the Project through ONAMFA; (ii) make available the proceeds of the Credit to ONAMFA, on a timely basis, as budgetary allocations; and (iii) take or cause to be taken all action, -7- including the provision of funds, facilities, services and other resources, to ONAMFA required for the carrying out of the Project and shall not take or permit to be taken any action which would prevent or interfere with the carrying out of the Project through ONAMFA. Section 3.02. Without limitation to the provisions of Section 3.01 above, the Borrower shall allocate in its annual budget for the calendar years 1994 and thereafter, for expenditures under the Project, funds equivalent to not less than the following minimum amounts: (a) $1,039,000 for calendar year 1994; (b) $2,287,000 for calendar year 1995; (c) $5,380,000 for calendar year 1996; (d) $10,580,000 for calendar year 1997; (e) $17,780,000 for calendar year 1998; (f) $27,730,000 for calendar year 1999; and (g) $33,200,000 for calendar year 2000 and thereafter. Section 3.03. The Borrower shall make its best efforts to obtain the External Assistance. Section 3.04. The Borrower, through ONAMFA, shall: (a) establish regional offices (the CDD Regional Offices) in a manner and under a timetable satisfactory to the Association; (b) maintain the CDD with adequate staff, structure, func- tions and budget, all satisfactory to the Association; (c) employ consultants (the External Supervisors) in accordance with the Administrative Manual, with qualifications and experience and under terms and conditions satisfactory to the Association, for the purposes of supervising the implementation of Part B of the Project together with the CDD Regional Offices; and (d) enter into agreements (the Civil-Servant Agreements), in terms and conditions satisfactory to the Association, with the per- -8- sons selected to fill in the ONAMFA Positions, whose qualifications and experience shall be satisfactory to the Association, for purposes of regulating the employment of such persons by ONAMFA under the CSRP. Section 3.05. Except as the Association shall otherwise agree, procurement of the goods and consultants' services required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 5 to this Agreement. Section 3.06. The Borrower shall supervise the implementation of Part B of the Project through the CDD Regional Offices and the External Supervisors in a manner satisfactory to the Association and in accordance with the Operations Manual. Section 3.07. (a) Not later than March 31, 1994, the Borrower, through ONAMFA, shall establish and thereafter maintain a fund (the Health Fund) under terms and conditions satisfactory to the Association, to provide assistance in the payment of laboratory tests and treatment of infections of children in Day-care Centers with moderate and severe malnutrition. (b) Whenever necessary and in accordance with the provisions of the Manuals, the Borrower, through ONAMFA, shall make Health Grants out of the proceeds of the Health Fund in a manner satis- factory to the Association. The aggregate amount of Health Grants made during a month shall not exceed an amount equivalent to $5 multiplied by the number of Day-care Centers in operation during such month. Section 3.08. (a) Not later than March 31, 1994, the Borrower, through ONAMFA, shall establish and thereafter maintain a fund (the Rehabilitation Fund) under terms and conditions satis- factory to the Association, to provide financing (Rehabilitation Grant-Loans) for purposes of rehabilitating Day-care Centers in order that they meet the minimum standards of security, space and services for day- care. (b) Whenever necessary and in accordance with the provisions of the Manuals, the Borrower, through ONAMFA, shall enter into agreements (the Rehabilitation Agreements), under terms and condi- tions satisfactory to the Association, with the owners of Day-care Centers for purposes of providing Rehabilitation Grant-Loans. The aggregate amount of Rehabilitation Grant-Loans made for each Day- care Center shall not exceed the equivalent of $500. -9- Section 3.09. The Borrower, through ONAMFA, shall, under Parts A.1 and C of the Project: (a) carry out the studies set forth in Schedule 7 to this Agreement in accordance with the timetable therein set forth, under terms of reference satisfactory to the Association; (b) promptly upon the completion of each of such studies, furn-sh to the Association the results of such studies and their recommendations, for review and comments; (c) prepare and furnish to the Association not later than 90 days after the date in which the Association sends, pursuant to paragraph (b) above, its comments to ONAMFA, programs or plans of action, satisfactory to the Association, in respect of each such study; and (d) implement each of the programs or plans of action referred to in paragraph (c) above, in a manner and under a timetable satisfactory to the Association. Section 3.10. The Borrower, through ONAMFA, shall enter into arrangements (the ONAMFA-Health Center Arrangements), in a manner and under terms and conditions satisfactory to the Association, with the health centers of the regions in which Part B of the Project shall be implemented, providing for medical assistance under Parts B.6 and B.7 of the Project for children in the Day-care Centers, their pregnant mothers and pregnant caregivers of the Day-care Centers in the relevant region. Section 3.11. Without limitation to the provisions of Sections 9.01 (a) and 9.07 (a) (iii) and (c) of the General Conditions, the Borrower, through ONAMFA, shall furnish to the Association not later than March 31, June 30, September 30 and December 31 of each year of Project execution, progress reports on the Project, of such scope and detail as the Association may reasonably request. The quarterly report of September 30 (the annual report), shall include, inter alia: (i) an assessment of the overall progress in the implementation of the Project, including the Implementation Indicators; (ii) a detailed work plan for the upcoming year; and (iii) an updated financial plan for the three years succeeding that of such report, all satisfactory to the Association. Section 3.12. Without limitation to the provisions of Sections 9.01 (a) and 9.07 (a) (iii) and (c) of the General Conditions and - 10 - unless otherwise agreed by the Association, the Borrower shall, and shall cause ONAFMA to: (a) Not later than November 30 of each year during the execution of the Project, carry out annual Project reviews with the Association, such reviews to be based on the reports referred to in Section 3.11 of this Agreement. (b) Not later than November 30, 1996, hold a review with the Association (mid-term review), to carry out a comprehensive assess- ment of the PIDI, the Project, their implementation, including the Implementation Indicators, and financial sustainability, and the Borrower's investment plan for the social sector. (c) If as a result of any of the above reviews, the Association shall have determined that the progress in the execution of the Project or in the attainment of its objectives is not satis- factory, promptly take or cause to be taken, without limitation or restriction to any of the Association's rights under this Agreement, all such remedial action, satisfactory to the Association, as shall be necessary for the efficient execution of the Project or for the attainment of its objectives. Section 3.13. Not later than March 31, 1994, the Borrower, through ONAMFA, shall: (a) establish and implement an evaluation system based on the IHS, satisfactory to the Association, to evaluate the impact of the PIDI and the Project; and (b) establish and implement a monitoring system, satis- factory to the Association, to monitor the implementation of the PIDI and the Project in accordance with the Implementation Indicators. Section 3.14. The Borrower, through ONAMFA, shall: (a) open and maintain the Day-care Centers in accordance with the Manuals, in a manner and under a timetable satisfactory to the Association; (b) select and maintain the caregivers for the Day-care Centers and cause to be provided financial support to them in accordance with the Manuals and in a manner satisfactory to the Association; and - 11 - (c) select the children for the Day-care Centers based on criteria set forth in the Operations Manual, giving priority to those malnourished, in a manner satisfactory to the Association. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall, or cause ONAMFA to, maintain records and separate accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project. (b) The Borrower shall, or shall cause ONAMFA, to: (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 principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association 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 Association shall have reasonably requested; (iii) furnish to the Association monthly certified statements of the Special Account; and (iv) furnish to the Association such other information concerning said records and accounts as well as the audit thereof as the Association shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Credit Account were made on the basis of statements of expenditures, the Borrower shall, or shall cause ONAMFA to: (i) maintain, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; - 12- (ii) retain, or cause to be retained, until at- least one year after the Association has received the audit reports for the fiscal year in which the last withdrawal from the Credit Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Association's representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audits referred to in paragraph (b) of this Section and that the reports of such audits contain a separate opinion by said auditors as to whether the statements of expenditures submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. (d) The Borrower shall, or shall cause ONAMFA to, ensure that the audit reports referred to in paragraph (b) of this Section contain a separate opinion by said auditors as to whether the CSRP criteria for selection of personnel was observed in the fulfillment of the ONAMFA Positions during the relevant year. ARTICLE V Remedies of the Association Section 5.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional events are specified: (a) ONAMFA shall have failed to perform in accordance with the arrangements referred to in Section 3.01 (b) (i). (b) As a result of events which have occurred after the date of the Development Credit Agreement, an extraordinary situation shall have arisen which shall make it improbable that ONAMFA will be able to perform in accordance with the arrangements referred to in Section 3.01 (b) (i). - 13 - (c) The Borrower's law 1403, of December 1992 (C6dizo del Menor), or the CSRP or the Borrower's Supreme Decrees 22964, of November 1991, 23415, of March 1993 or 23469, of April 1993 or the ONAMFA-MPSSP Arrangement or the Manuals or the CSRP-ONAMFA Arrangements shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely, in the opinion of the Association, the carrying out of the Project or the ability of ONAMFA to perform in accordance with the arrangements referred to in Section 3.01 (b) (i). (d) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of ONAMFA or for the suspension of its operations. Section 5.02. Pursuant to Section 7.01 (d) of the General Conditions, the following additional events are specified, namely, any event specified in paragraphs (a) or (c) or (d) of Section 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following event is specified as additional condition to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01(b) of the General Conditions, namely, that the Borrower has entered into the arrangements referred to in Section 3.01 (b) (i). Section 6.02. The following is specified as an additional matter, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association, namely, that the arrangements referred to in Section 3.01 (b) (i) have been duly executed. Section 6.03. The date Pa1'/) is hereby specified for the purposes of Section 12.0 of the General Conditions. ARTICLE VII Representatives of the Borrower; Addresses Section 7.01. Except as provided in Section 2.09 of this Agreement, the Minister of Finance and Economic Development and the - 14 - Secretary of Finance of the Borrower are severally designated as representatives 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: Minister of Finance and Econmic Development and/or Secretary of Finance Ministerio de Hacienda y Desarrollo Econ6mico Secretaria Nacional de Hacienda Caj6n Postal - Ministerio de Finanzas Calle Bolivar esq. Indaburo No. 688 La Paz, Bolivia Cable address: Telex: FINANZA 2617 (FINANZA BV) La Paz, Bolivia For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 248423 (RCA) Washington, D.C. 82987 (FTCC) 64145 (WUI) or 197688 (TRT) - 15 - 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 BOLIVIA By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Regional Vice President Latin America and the Caribbean - 16 - SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Rehabilitation 1,930,000 100% of the Grant-Loans to amounts disbursed Day-care Centers under a Rehabi- litation Grant- Loan (2) Goods 18,520,000 100% of foreign expenditures and 80% of local expenditures (3) (a) Consultants' ser- 3,880,000 100% vices, except for Part B.8 of the Project, and training - 17 - Amount of the Credit Allocated Z of (Expressed in Expenditures Category SDR Equivalent) to be Financed (b) Consultants' 640,000 100% for expen- services for ditures made Part B.8 of during 1993 and the Project 1994; 75% for expenditures made during 1995; 60% for expenditures made during 1996; 25% for expen- ditures made during 1997 and thereafter (4) Health Grants 5,390,000 100% for expen- and stipends ditures made to the under Health caregivers Grants and for the payment of stipends to the caregivers during 1993 and 1994; 85% for expen- ditures made during 1995; 75% for expen- ditures made during 1996; 60% for expen- ditures made during 1997; 46% for expen- ditures made during 1998; 17% for expen- ditures made during 1999 and thereafter - 18 - Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (5) Incremental 750,000 87% for expen- salaries of the ditures made ONAMFA Positions under a Civil Servant Agreement during 1993 and and 1994; 72% for expenditures made during 1995; 54% for expenditures made during 1996; 35% for expenditures made during 1997; 21% for expenditures made during 1998; 7% for expenditures made during 1999 and thereafter - 19 - Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (6) Incremental 2,580,000 87% for expen- administrative ditures made costs during 1993 and 1994; 72% for expenditures made during 1995; 54% for expenditures made during 1996; 35% for expenditures made during 1997; 21% for expenditures made during 1998; 7% for expenditures made during 1999 and thereafter (7) Refunding of 530,000 amounts due Project pursuant to Preparation Section 2.02(c) Advance of this Agreement (8) Unallocated 1,580,000 TOTAL 35,800,000 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; - 20 - (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; (c) the term "incremental administrative costs" means the incremental administrative costs incurred by ONAMFA for the purposes and as a result of the implementation of the Project, including the salaries for the positions created by ONAMFA in the CDD and the CDD Regional Offices and excluding the salaries for the ONAMFA Positions; (d) the term "stipends to the caregivers" means the financial support to be provided to the caregivers of the Day-care Centers in accordance with Section 3.14(b) of this Agreement; and (e) the term "incremental salaries of the ONAMFA Positions" means the incremental salaries of the ONAMFA Positions due to their incorporation to the CSRP. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not to exceed $1,000,000, may be made in respect of Categories (1) through (6) of the table set forth in paragraph 1 above on account of pay- ments made for expenditures before that date but after November 1, 1993; (b) payments for food; (c) payments made for expenditures under Category (1) of the table in paragraph 1 hereof unless the respective Rehabilitation Agreement has been signed; (d) payments made for expenditures in relation to a Day-care Center in a given region unless the External Supervisor for such region has been contracted and the CDD Regional Office of such region has been established; (e) payments made for expenditures in relation to a Day-care Center in a given region unless the ONAMFA-Health Center Agreement for such region has been signed; - 21 - (f) payments made for expenditures under Category (5) of the table in paragraph 1 hereof, unless the respective Civil Servant Agreement has been signed; and (g) payments for operational costs of the Day-care Centers other than stipends to the caregivers. - 22 - SCHEDULE 2 Description of the Project The objective of the Project is to support the PIDI as part of the Borrower's efforts to alleviate poverty and increase human capital investment in Bolivia by expanding coverage and improving the quality of targeted child development programs in poor urban and peri-urban areas. More specifically, the Project aims to: (a) improve children's readiness to succeed in school and beyond by facilitating their physical, emotional, social and cognitive development; (b) enhance the status of women by increasing their employment opportunities and by expanding their knowledge of education, health and nutrition; and (c) increase community and private sector participation in the social development process. A secondary objective of the Project is to enhance the Borrower's capacity to formulate and evaluate social policy. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Association may agree upon from time to time to achieve such objectives: Part A: Sector Policy Development and Management Strengthening 1. Establishment of broad policy foundations in the areas of food security and nutrition, extension of early child development services to rural areas and refinement of measures to assess child development including: (a) the determination of priorities to coordinate food security and nutrition interventions, rationalize food aid and integrate agriculture production and social sector programs; and (b) the development of investment models and pilot projects for the extension of early childhood development activities to rural areas. 2. Strengthening of ONAMFA through: (a) the modernization of its organization and the provision of training to its staff; (b) the strengthening of the CDD and the establishment and strengthening of the CDD Regional Offices; - 23 - (c) the installation of computer equipment, implementation of information systems in the main administrative sections of its central office and in the CDD Regional Offices, and the design of a five-year information system plan; and (d) the inclusion of ONAMFA in the CSRP. Part B: Service Delivery Support Delivery of childhood development services in poor urban and peri-urban areas by implementing a non-formal, home-based early childhood development model in approximately 34 cities, involving the care of about 15 children by two or three caregivers per Day- care Center, including: 1. technical and administrative support to the PIDI and the refinement of the mechanisms for the targeting of beneficiaries and the selection of the caregivers; 2. support to and training of the caregivers in the delivery of services and training of members of the parents' associations in related administrative functions; 3. rehabilitation of Day-care Centers through the Rehabilitation Fund; 4. equipping of Day-care Centers; 5. provision of nutrition supplements and early education to children in the Day-care Centers; 6. provision of health services to children and the establishment of the Health Fund; 7. improvement of access to health and family planning for pregnant women with children in the Day-care Centers and for the caregivers; and 8. supervision of the services delivered under this Part of the Project. Part C: Monitoring and Evaluation 1. Implementation of a monitoring system for the PIDI and the Project to provide implementation performance indicators including - 24 - Project inputs, process indicators and administrative and financial information. 2. Implementation of an evaluation system to assess the development of children and women supported by the Project, and of related community activities. The Project is expected to be completed by June 30, 1999. - 25 - SCHEDULE 3 Special Account 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories (1) through (6) 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 proceeds of the Credit allocated from time to time to the eligible Categories in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means an amount equivalent to $ 2,500,000 to be withdrawn from the Credit Account and deposited in the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Payments out of the Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Association has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Special Account shall be made as follows: (a) For withdrawals of the Authorized Allocation, the Borrower shall furnish to the Association a request or requests for a deposit or deposits which do not exceed the aggregate amount of the Authorized Allocation. On the basis of such request or requests, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit in the Special Account such amount or amounts as the Borrower shall have requested. (b) (i) For replenishment of the Special Account, the Borrower shall furnish to the Association requests for deposits into the Special Account at such intervals as the Association shall specify. 1 26 - (ii) Prior to or at the time of each such request, the Borrower shall furnish to the Association 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 Association shall, on behalf of the Borrower, withdraw from the Credit Account and deposit into the Special Account such amount as the Borrower shall have requested and as shall have been shown by said documents and other evidence to have been paid out of the Special Account for eligible expenditures. All such deposits shall be withdrawn by the Association from the Credit 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 Borrower out of the Special Account, the Borrower shall, at such time as the Association shall reasonably request, furnish to the Association 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 Association shall not be required to make further deposits into the Special Account: (a) if, at any time, the Association shall have determined that all further withdrawals should be made by the Borrower directly from the Credit 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 eligible Categories, less the amount of any outstanding special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions with respect to the Project, shall equal the equivalent of twice the amount of the Authorized Allocation. Thereafter, withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit allocated to the eligible Categories shall follow such procedures as the Association shall - 27 - specify by notice to the Borrower. Such further withdrawals shall be made only after and to the extent that the Association shall have been satisfied that all such amounts remaining on deposit in the Special Account as of the date of such notice will be utilized in making payments for eligible expenditures. 6. (a) If the Association shall have determined at any time that any payment out of the Special Account: (i) was made for an expenditure or in an amount not eligible pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association: (A) provide such additional evidence as the Association may request; or (B) deposit into the Special Account (or, if the Association shall so request, refund to the Association) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Association shall have determined at any time that any amount outstanding in the Special Account will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Association all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Association made pursuant to paragraphs 6 (a), (b) and (c) of this Schedule shall be credited to the Credit Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions. - 28 - SCHEDULE 4 ONAMFA Positions POSITION NO. OF POSITIONS DIRECCION ADMINISTRATIVA-FINANCIERA Director(a) 1 Jefe del Departamento Administrativo 1 Jefe de la División de Personal 1 Jefe del Departamento Financiero 1 Jefe de la División de Activos Fijos 1 Jefe de la División de Contabilidad 1 Jefe de la División de Almacenes 1 DIRECCION DEL MENOR, MUJER Y FAMILIA Director(a) 1 Jefe del Departamento de Atención a la Comunidad 1 Técnico en Menor 1 Técnico en Ancianos 1 Jefe del Departamento de Centros Estatales y Privados 1 Técnico de Centros Estatales 1 Técnico de Centros Privados 1 Jefe del Departamento de Adopciones 1 Asesor Legal 1 Trabajador Social 1 OFICINAS DEPARTAMENTALES Director Administrativo- -Financiero 8 Director del Menor, Mujer y Familia 8 TOTAL 33 - 29 - SCHEDULE 5 Procurement and Consultants' Services Section I. Procurement of Goods Part A: International Competitive Bidding 1. Except as provided in Part C hereof, goods shall be procured under contracts awarded in accordance with procedures consistent with those set forth in Sections I and II of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1992 (the Guidelines): (a) For fixed-price contracts, the invitation to bid referred to in paragraph 2.13 of the Guid'lines shall provide that, when contract award is delayed beyond the original bid validity period, the successful bidder's bid price shall be increased for each week of delay by two predisclosed correction factors acceptable to the Association, one to be applied to all foreign currency components and the other to the local currency component of the bid price. Such an increase shall not be taken into account in the bid evaluation. (b) In the procurement of goods in accordance with this Part A, the Borrower shall use the relevant standard bidding documents issued by the Bank, with such modifications thereto as the Association shall have agreed to be necessary for the purposes of the Project. Where no relevant standard bidding documents have been issued by the Bank, the Borrower shall use bidding documents based on other internationally recognized standard forms agreed with the Association. 2. To the extent practicable, contracts for goods shall be grouped into bid packages estimated to cost the equivalent of $100,000 or more. Part B: Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A hereof, goods manufactured in Bolivia may be granted a margin of preference in accordance with, and subject to, the provisions of paragraph 2.55 and 2.56 of the Guidelines and paragraph 1 through 4 of Appendix 2 thereto. - 30 - Part C: Other Procurement Procedures 1. Goods estimated to cost the equivalent of $100,000 or less per contract, up to an aggregate amount equivalent to $10,000,000 may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association. 2. Goods estimated to cost the equivalent of $25,000 or less per contract, up to an aggregate amount equivalent to $4,500,000, may be procured under contracts awarded on the basis of comparison of price quotations obtained from at least three suppliers eligible under the Guidelines, in accordance with procedures acceptable to the Association. 4. Contracts for goods estimated to cost the equivalent of $5,000 or less per contract, up to an aggregate amount equivalent to $1,000,000, may be awarded after direct negotiations with suppliers, in accordance with procedures acceptable to the Association. Part D: Review by the Association of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to each contract for goods estimated to cost the equivalent of more than $75,000, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract required to be furnished to the Association pursuant to said paragraph 2 (d) shall be furnished to the Association prior to the making of the first payment out of the Special Account in respect of such contract. (b) With respect to each contract not governed by the preceding paragraph, the procedures set forth in paragraphs 3 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract together with the other information required to be furnished to the Association pursuant to said paragraph 3 shall be furnished to the Association as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 3 to this Agreement. - 31 - (c) The provisions of the preceding subparagraph (b) shall not apply to contracts on account of which withdrawals from the Credit Account are to be made on the basis of statements of expenditure. 2. The figure of 15% is hereby specified for purposes of paragraph 4 of Appendix 1 to the Guidelines. Section II. Employment of Consultants In order to assist the Borrower in carrying out the Project thragh ONAFMA, the Borrower shall employ or cause ONAMFA to employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Association. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Association on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981 (the Consultant Guidelines). For complex, time-based assignments, the Borrower shall employ or cause ONAMFA to employ such consultants under contracts using the standard form of contract for consultants' services issued by the Bank, with such modifications as shall have been agreed by the Association. Where no relevant standard contract documents have been issued by the Bank, the Borrower shall use or cause ONAMFA to use other standard forms agreed with the Association. - 32 - SCHEDULE 6 Implementation Indicators End of Calendar Year Coverage Targets 1994 1995 1996 1997 1998 1999 Number of Day-Care Centers Functioning 703 1,441 2,617 4,489 6,579 8,670 Number of Children Enrolled (of which 10,545 21,615 39,255 67,335 98,685 130,050 children under 2 years of age) (2,109) (4,323) (7,851) (13,467) (19,737) (26,010) Number of Educators 1,687 3,458 6,280 10,774 15,790 20,808 Selection of Children Enrolled in Day-Care Centers All new children enrolled in Day-care Centers will be selected according to the following criteria, in order of importance: (i) Malnourished; (ii) Living in single parent households; (iii) Parents employed and, thus, child at risk of abandonment; and (iv) From families with high parity, i.e., with 5 or more children. The percentage of new enrollees meeting each of the above criterion would be reviewed. Compliance with Key Operational/Technical Norms of the Project Indicator Target Percentage of normal or mildly malnourished 100 percent for children enrolled in the Day-care Centers all years of project who have received weight & height control implementation visits at the referral health center once per month - 33 - Percentage of children enrolled in the 100 percent for Day-care Center who are mildly malnourished all years of project and not gaining weight between control implementation visits and those with moderate and severe malnutrition who have received weight control visits once per week at the referral health center Percentage of malnourished children enrolled 100 percent for in Day-care Centers who are under medical all years of project treatment or who have received medical implementation control visits by a doctor at the referral health center twice per month Percentage distribution of children enrolled Over time, the in Day-care Centers according to their proportion of nutrition status (i.e. normal or mild, children moderate or severe malnutrition) malnourished, particularly of moderate and severe degree, would decline Percentage of children enrolled in the 100 percent for Day-care Center for six months or more all years of project who have received their full immunization implementation coverage Percentage distribution of children enrolled Over time, the in Day-care Centers according to their level proportion of on the child development scale children at the lowest levels would decline Percentage of children enrolled in Day-care 100 percent for Centers who, upon reaching 6 years of age, all years of enter primary school project implementation - 34 - Costs of Day-Care Center Implementation Average investment cost per Day-care Center for: (i) initial opening; and (ii) replacement of furniture and equipment. Average monthly operational costs per Day-Care Center. Average monthly project cost per beneficiary. - 35 - SCHEDULE 7 Studies to be Carried out by the Borrower through ONAMFA Project Componentl Agreed Completion Study Date A. Sector Policy Development and Management Strengthening Food Security and Nutrition June 30, 1995 Extension of Child Development June 30, 1996 Services to Rural Areas Analysis of ONAMFA's Institutional June 30, 1996 Capacity Refinement of Child Development June 30, 1996 Measures Design of a Five-Year Information June 30, 1996 System Plan B. Monitoring and Evaluation Impact of the Project on Women June 30, 1996 (Interim Report) June 30, 1998 (Final Report) Impact of the Project on Community June 30, 1996 Development (Interim Report) June 30, 1998 (Final Report) Project Cost-Effectiveness June 30, 1998 Project Impact on Schooling and June 30, 1998 School Performance INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Development Association. FOR SECRETARY