Honduras - Nutrition And Health Project : Credit 2452 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 2452-0 HO Development Credit Agreement (Nutrition and Health Project) between REPUBLIC OF HONDURAS and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated March 11, 1993 CREDIT NUMBER 2452-0 HO DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated March 11, 1993, between REPUBLIC OF HO,DURAS (the Borrower) and 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; (B) the Association has received a letter dated November 18, 1992 from the Borrower describing its health, nutrition, water and sanitation policies designed to improve the health and nutrition conditions in the Borrower's territory, and declaring the Borrower's commitment to the implementation of such policies; (C) the Borrower intends to obtain from bilateral and multilateral aid and development organizations (Additional Financiers) loans and grants in an amount equivalent to $13,500,000 (thirteen million five hundred thousand dollars), to assist the FAP (Family Assistance Program, as hereinafter defined) in financing Part A.2 of the Project on the terms and conditions set forth in agreements to be entered into between the Borrower and each of the Additional Financiers (Additional Funding Agreements); and 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 Sectiou 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: -2- (a) "AIDS" means the Acquired Immunodeficiency Syndrome; (b) "BMI Area" means an area which includes any of the Departments of Comayagua, Copan, El Paraiso, Francisco Moraz6n, La Paz, Ocotepeque, Olancho, Santa Barbara and Valle within the Borrower's territory, and other such Departments as may be acceptable to the Association; (c) "BMJF Area" means an area which includes any of the Departments of Copan, Cortes, Choluteca, Francisco MorazAn, Intibuca, Lempira, Santa Barbara and Valle within the Borrower's territory, and other such Departments as may be acceptable to the Association; (d) "Contrato" means a contract entered into, or to be entered into, between the Borrower, through MOH, and a Junta for purposes of carrying out a Subproject, as required by Section 3.08 of this Agreement; (e) "Decree 127-91" means the Decreto No. 127-91 of the Borrower dated October 15, 1991, published in the Official Gazette (La Gaceta) on November 22, 1991, amended by Decree No. 135-92; (f) "Decree No. 135-92" means the Decreto No. 135-92 of the Borrower dated October 6, 1992 published in the Official Gazette (L,a Gaceta) on November 14, 1992; (g) "FAP" means the Family Assistance Program (Programa de Asignaci6n Familiar) of the Borrower governed by Decree No. 127-91, as amended by Decree No. 135-92; (h) "FAP Operational Manual" means the manual of FAP containing the administrative, promotion, eligibility and supervision criteria to be followed by FAP in carrying out Part A.2 of the Project and to be approved pursuant to the provisions of Section 7.01 (b) of this Agreement, as such manual may be amended from time to time in terms acceptable to the Association; (i) "FAP's Regulations" means the Acuerdo Presidencial No. 349-A of the Borrower dated April 27, 1992, published in the Official Gazette (La Gaceta) on June 13, 1992; (j) "F'AP Subsidiary Agreement" means the agreement to be entere-1 into between the Borrower and FAP, pursuant to Section 3.01 」 4 duration was extended until March 31, 1994 pursuant to Decree no. 19-92; (v) 11SIF Agreement" means the agreement to be entered into between the Borrower, through MOH, and SIF in accordance with Section 7.01 (e) of this Agreement under which SIF shall assist the Borrower, through MOH in carrying out Parts B.1 and B.2 of the Project until March 31, 1994; (w) "Special Account" means the account referred to in Section 2.02 (b) of tiiis Agreement; W "Subproject" means a project carried out, or to be carried out, under Part C.1 of the Project financed in part by the proceeds of the Credit; and (Y) "Water Supply and Sanitation Operational Manual" means the manual of the MOH, to be approved pursuant to the provisions of Section 7.01 (c) of this Agreement, containing: (i) the administrative, technical, financial and eligibility criteria to be followed by each Junta in operating and maintaining its local water supply and sanitation systems; and (ii) the terms and conditions to be included in each Contrato. 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 seventeen million eight hundred thousand Special Drawing Rights (SDR 17,800,000). 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 described in Schedule 2 to this Agreement 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 (Banco Central de Honduras) on terms and conditions -5- satisfactory to the Association. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 4 to this Agreement. Section 2.03. The Closing Date shall be June 30, 1997 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-hall of one percent (1/2 of 1%) per annum. (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 other 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 percent (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 January 1 and July 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 January 1 and July 1 commencing July 1, 2003 and ending January 1, 2033. Each installment to and including the installment payable on January 1, 2013 shall be one -6- percent (1%) of such principal amount, and each installment thereafter shall be two percent (2%) of such principal amount. (b) Whene er: (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 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. ARTICLE III Execution of the Project Section 3.01. The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement, and, to this end: (a) shall carry out: (i) through MOH, Parts A.1, B.1 through B.6, C and D.1 of the Project; and (ii) through SCES, Parts A.4 and D.2 of the Project, with due diligence and efficiency and in conformity with appropriate administrative, public health, - 7 technical, environmental, managerial and financial practices, and, with respect to Part C.1 of the Project, also in accordance with the Water Supply and Sanitation Operational Manual, and shall provide, promptly as needed, the funds, facilities, services and other resources required for such Parts of the Project; and (b) shall cause FAP to carry out Farts A.2 and A.3 of the Project with due diligence and efficiency end in conformity with appropriate administrative, public health, technical, managerial and financial practices, and in accordance with FAP's Operational Manual, shall take or cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable FAP to carry out the Project, and shall not take or permit to be taken any action which would prevent or interfere with the carrying out of Parts A.2 and A.3 of the Project by FAP; (c) the Borrower shall enter into a subsidiary agreement with FAP, satisfactory to the Association, providing, inter alia: (i) the transfer of part of the proceeds of the Credit to FAP, on a grant basis, for the purposes of carrying out Parts A.2 and A.3 of the Project; and (ii) the obligation of FAP to carry out Parts A.2 and A.3 of the Project in accordance with the conditions set forth in this Agreement and in the FAP's Operational Manual; and (d) the Borrower shall exercise its rights and comply with its obligations under the FAP Subsidiary Agreement in such manner as to protect the interests of the Borrower and the Association, and to accomplish the purposes of the Credit, and, except as the Association shall otherwise agree, the Borrower shall not amend or fail to enforce the FAP Subsidiary Agreement or any provision thereof. Section 3.02. Except as the Association shall otherwise agree, procurement of the goods, works 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 3 to this Agreement. Section 3.03. The Association and the Borrower hereby agree that the obligations set forth in Sections 9.03, 9.04. 9.05, 9.06, -8- and 9.07 of the General Conditions (relating to insurance, use of goods and services, plans and schedules, records and reports and maintenance, respectively) in respect of Parts A.2 and A.3 of the Project shall be carried out by FAP. Section 3.04. The Borrower, through MOH, shall: (a) not later than November 15, 1993, furnish to the Association a draft of the long-term nutrition policy and the results of the evaluation, referred to in Part A.1 (a) of the Project; (b) as part of the first annual review as referred to in Section 3.16 of this Agreement, jointly review with the Association the draft of such policy and the results of such evaluation; (c) furnish to the Association, for its approval by January 31, 1994, an action plan, for implementing the recommendations of such policy and evaluation; (d) commence the implementation of such action plan immediately thereafter as approved by the Association; and (e) complete the implementation of such action plan not later than December 31, 1995. Section 3.05. (a) Without limitation to the provisions of Section 3.01 (a), the Borrower, through MOH, shall establish the eligibility criteria to carry out Parts B.1 and B.2 of the Project, such eligibility criteria to include, inter alia: (A) with respect to Part B.1 of the Project: (i) that primary health care centers be located in areas of high rate of malnutrition within the BMI Area; and (ii) that the rehabilitation works in such area do not exceed an upper limit cost equivalent to $10,000 per primary health care center; and (B) with respect to Part B.2 of the Project: (i) that construction of the new primary health care centers be located within the BMI Area; (ii) that a population ranging from 1,500 to 3,000 people to be benefited by the new primary health care are not receiving proper medical treatment; and (iii) that there be a 5- to 10-kilometer distance between an existing primary health care center and the new primary health care center to be constructed under this Part of the Project. (b) The Borrower, through MOH, shall carry out Parts B.1 and B.2 of the Project in accordance with performance indicators satisfactory to the Association. Section 3.06. (a) In order to assist the Borrower in the carrying out of Parts B.1 through B.6 and C of the Project, the Borrower, through MOR, shall operate and maintain the Project Unit in accordance with terms satisfactory to the Association. - 9 - (b) The Borrower, through MOH, shall ensure that the Project Unit is at all times headed by a qualified professional and assisted by qualified and adequate staff, satisfactory to the Association. Section 3.07. The Borrower, through MOB, shall increase the number of its personnel working in the BMI Area in accordance with a program satisfactory to the Association. Section 3.08. Prior to the initiation of the works of any Subproject under Part C.1 ot the Project, the Borrower, through MOH, shall enter into: (a) a Contrato with the Junta corresponding to the village where such Subproject will be located. (b) Each Contrato shall be on terms and conditions satisfactory to the Association, including, inter alia, those set forth in the Water and Sanitation Operational Manual. (c) Unless the Association shall otherwise agree, the Borrower, through MOH, shall exercise its rights and comply with its obligations under each Contrato in such manner as to: (i) protect the interests of the Borrower and the Association; (ii) comply with its obligations under this Agreement; and (iii) achieve the purposes of the Project. (d) Unless the Association shall otherwise agree, the Borrower, through MOH, shall not change or fail to enforce any such Contrato or any provision thereof. (e) The Borrower shall take all necessary steps to ensure the expeditious granting of legal personality to each Junta. Section 3.09. (a) The Borrower, through MOH, shall not later than March 31 of each year, starting in March 1994, test the quality of the water supplied by it to each Junta. (b) If the results of the test referred to in paragraph (a) above, shows that the quality of the water is deficient for human consumption, the Borrower shall take all such remedial action, satisfactory to the Association, as shall be necessary to improve the quality of such water. Section 3.10. The Borrower, through SCES, shall: (a) coordinate the implementation of the Project in accordance with performance indicators satisfactory to the Association; and (b) carry out monthly meetings during the implementation of the Project 10 - with MOM and FAP, starting in March 1993, to carry out its obligations under (a) hereof. Section 3.11. (a) The Borrower, through MOH, shall: (i) carry out the study described in Part D (c) of the Project, not later than December 10, 1993; (ii) as part of the first annual review as referred to in Section 3.16 of this Agreement, jointly review with the Association the recommendations of such study; and (iii) furnish to the Association, for its approval by January 31, 1994, an action plan, for implementing the recommendations of such study. (b) The Borrower, through MOM, shall: (i) commence the implementation of the action plan referred to in (a) (iii) above, immediately thereafter as approved by the Association; and (ii) complete the implementation of such action plan not later than December 10, 1995. Section 3.12. The Borrower, through MOH, shall: (a) not later than December 10 of each year until the Project has been completed, starting in December, 1993, furnish to the Association, for its approval, a program for the procurement of medicines under Part B.5 of the Project for the upcoming calendar year; and (b) carry out each such program in accordance with the terms thereof. Section 3.13. The Borrower, through SCES, shall: (a) not later than January 31, 1993 hire a qualified financial analyst and quali- fied and adequate staff necessary to assist it in the preparation of the financial reports referred to in Section 3.15 (a) (ii) of this Agreement; and (b) consult with the Association prior to appointing such analyst and staff. Section 3.14. Without limitation to the provisions of Section 3.01 (a), the Borrower shall: (a) provide in its annual budget and make available promptly as needed, in Lempiras equivalent, as incremental counterpart funds for Parts A.2 and B.3 (b)(i), B.5 and B.6 of the Project, each FY, until the completion of the Project, the following amounts: - 11 - Part of the Project FY Amount in dollars I. A.2 1993 1,142,000 A.2 1994 2,642,000 A.2 1995 3,716,000 II. A.1, B.3(b)(i) 1994 350,000 and B.6 A.1, B.3(b)(i) 1995 1,000,000 and B.6 III. B.5 1994 590,000 B.5 1995 1,790,000 TOTAL 11,230,000; and (b) within thirty days after the date in which such budget is approved each FY, furnish to the Association a copy of the approved budget reflecting the amounts described above. Section 3.15. (a) Without limitation to the provisions of Section 9.06 of the General Conditions and Section 4.01 of this Agreement, the Borrower, through SCES, shall prepare and furnish to the Association by not later than March 31 and September 30 of each year, starting in September 1993: (i) a report, of such scope and detail satisfactory to the Association, concerning the progress in the implementation of the Project in accordance with the performance indicators referred to in Section 3.10 of this Agreement; and (ii) a financial report of such scope and detail satisfactory to the Association, showing: (A) a comparison between the funds committed by the Borrower and FAP for the carrying out of the Project during the semester preceding the date of presentation of such report and the funds used by the Borrower and FAP in carrying out the Project during such period of time; and (B) the funds used on recurrent costs under the Project during the semester preceding the date of presentation of such report. (b) The Borrower, through SCES, shall prepare and furnish to the Association by not later than March 31 and September 30 of each year, starting in September 1993, a financing plan for the implementation of the Project satisfactory to the Association, such plan to be implemented during the semester following the date of presentation of the report referred to in paragraph (a) (ii) hereof. - 12 - Section 3.16. The Borrower shall and shall cause FAP to participate in annual reviews of Project implementation to be held in conjunction with the Association not later than December 10 of each year during Project implementation, beginning in 1993. Such reviews shall, inter alia, focus on discussing the topics referred to in the Implementation Letter with regard to annual reviews. As part of each such review, the Association may require that the Borrower prepare an action plan, satisfactory to the Association, to make adjustments in Project implementation. The Borrower, shall furnish such action plan to the Association not later than January 31 of the following year, and shall thereafter carry out, or cause to be carried out, such action plan in accordance with its terms. Section 3.17. Without limitation to the provisions of Section 3.01 (a) of this Agreement, the Borrower, through MOH, shall carry out Parts B.1 and B.2 of the Project with the assistance of SIF, in accordance with the SIF Agreement. Section 3.18. (a) The Borrower shall make its best efforts to obtain by September 30, 1993 loans or grants in an aggregate amount equivalent to $3,500,000 to assist FAP in the financing of Part A.2 of the Project. (b) In the event that the Borrower is not able to obtain the financing referred to in paragraph (a) above by September 30, 1993, the Borrower shall provide in its 1995 annual budget, in addition to the corresponding amount set forth in Section 3.14 of this Agreement, an amount equivalent to $3,500,000, in Lempiras, as incremental counterpart funds for Part A.2 of the Project. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall: (i) maintain or cause to be maintained records and separate accounts adequate to reflect in accordance with consistently maintained sound accounting practices, the operations, resources and expenditures in respect of Parts A.1, A.4, B, C and D of the Project; and (ii) cause FAP to maintain records and separate accounts adequate to reflect in accordance with consistently maintained sound accounting practices, the operations, resources and expenditures in respect of Parts A.2 and A.3 of the Project. - 13 - (b) The Borrower shall and shall cause FAP to: (i) have the records and accounts referred to in paragraph (a) of this Section including those for the Special Account and FAP's financial statements (balance sheets, statements of income and expenses and related statements) 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: (A) a certified copy of the report of such audits by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (B) certified copies of FAP's financial statements for such year as so audited; and (iii) furnish to the Association such other information concerning said records, accounts, financial statements and the audits 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 expenditure, the Borrower shall and shall cause FAP to: (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 Association has received the audit report for the fiscal year in which the last withdrawal from the Credit Account or payment out of the Special 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 - 14 - (iv) ensure that such records and accounts are included in the annual audits referred to in paragraph (b) of this Section and that the report of such audits contain 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, can be relied upon to support the related withdrawals. Section 4.02. The Borrower, through MOH, shall not later than March 31 of each year, starting in March 1994, review the accounts and other financial records and statements of each Junta, such review to be of such scope and in such detail as the Association shall reasonably request. Section 4.03. The Borrower, through MOH, shall take or cause each Junta to take, all necessary steps to set the tariffs to be charged by each Junta to the users of the water supply and sanitation systems constructed under a Subproject, at levels sufficient to cover the operation and maintenance costs of such systems. Section 4.04. Without limitation to the provisions of Section 4.01 of this Agreement, the Borrower shall cause FAP to: (a) have its records and accounts from July 1, 1991 through December 31, 1992 audited by independent auditors acceptable to the Association not later than March 31, 1993; (b) have its records and accounts audited by independent auditors acceptable to the Association, every quarter during the execution of the Project; and (c) furnish to the Association: (i) not later than June 30, 1993, a certified copy of the report of the audit referred to in (a) above of such scope and in such detail as the Association shall have reasonably requested; and (ii) not later than three months after the end of each quarter, a certified copy of the report of e&ch audit referred to in (b) above of such scope and in such detail as the Association shall have reasonably requested. - 15 - ARTICLE V Other Covenants Section 5.01. The Borrower shall cause FAP: (a) to take out and maintain with responsible insurers, or to make other provisions satisfactory to the Association for, insurance against such risks and in such amounts as shall be consistent with appropriate practice; and (b) to carry on its operations and conduct its affairs in accordance with sound administrative, financial, managerial, public health and technical practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers, all acceptable to the Association. ARTICLE VI Remedies of the Association Section 6.01. Pursuant to Section 6.02 (h) of the General Conditions, the following additional events are specified: (a) Decree No. 127-91 or Decree No. 135-92 or any provision thereof shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely, in the opinion of the Association, the ability of FAP to: (i) carry out Parts A.2 and A.3 of the Project; or (ii) perform any of its obligations under the FAP Subsidiary Agreement; (b) as a result of events which have occurred after the date of this Agreement, a situation shall have arisen which shall make it improbable that FAP will be able to perform its obligations under the FAP Subsidiary Agreement; (c) Presidential Decree No. 1071-A or any provision thereof shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely, in the opinion of the Association, the ability of the Borrower, to carry out Parts A.4 and D.2 of the Project; (d) SCES' Regulations or any provision thereof shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely, in the opinion of the Association, - 16 - the ability of the Borrower to perform any of its obligations under this Agreement; (e) FAP's Regulations or any provision thereof shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely, in the opinion of the Association, the ability of FAP to: (i) carry out Parts A.2 and A.3 of the Project; or (ii) to perform any of its obligations under the FAP Subsidiary Agreement; (f) the Borrower or any authority having jurisdiction shall have taken any action for the dissolution or disestablishment of FAP, or for the suspension of its operations; (g) (i) Subject to subparagraph (ii) of this paragraph: (A) The right of the Borrower to withdraw the proceeds of any grant or loan made to the Borrower for the financing of the Project shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing therefor; or (B) any such loan shall have become due and payable prior to the agreed maturity thereof. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Association that: (A) such suspension, cancellation, termination or prematuring is not caused by the failure of the Borrower to perform any of its obligations under such agreement; and (B) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consistent with the obligations of the Borrower under this Agreement; (h) the FAP Operational Manual shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely, in the opinion of the Association, the ability of FAP to carry out Part A.2 of the Project; - 17 - (i) the Water Supply and Sanitation Operational Manual shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely, in the opinion of the Association, the ability of the Borrower to carry out Part C.1 of the Project; (j) the SIF Agreement or any provision thereof shall have been amended, suspended or waived so as to affect materially and adversely, in the opinion of the Association, the ability of the Borrower to carry out Parts B.1 and B.2 of the Project; and (k) SIF shall have failed to comply with any of its obligations under the SIF Agreement. Section 6.02. Pursuant to Section 7.01 (d) of the General Conditions, the following additional events are specified: (a) any event specified in paragraphs (a) or (c) or (d) or (e) or (h) or (i) or (j) or (k) of Section 6.01 of this Agreement shall occur and shall continue for a period of thirty days after notice thereof shall have been given by the Association to the Borrower; (b) the event specified in paragraph (f) of Section 6.01 of this Agreement shall occur; and (c) any event specified in paragraph (g) (i) (B) of Section 6.01 of this Agreement shall occur, subject to the proviso of paragraph (g) (ii) of that Section. ARTICLE VII Effective Date; Termination Section 7.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) that the FAP Subsidiary Agreement has been entered into between the Borrower and FAP; (b) that the FAP Operational Manual has been approved by FAP in terms satisfactory to the Association; - 18 - (c) that the Water Supply and Sanitation Operational Manual has been approved by the Borrower in terms satisfactory to the Association; (d) that the Additional Funding Agreements have been signed; and (e) that the SIF Agreement has been entered into between the Borrower and SIF in terms acceptable to the Association. Section 7.02. The following are specified as additional matters, 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: (a) that the FAP Subsidiary Agreement has been duly authorized or ratified by, and is legally binding upon the Borrower and FAP in accordance with its terms; (b) that the FAP's Operational Manual has been validly adopted by FAP and is in full force and effect; and (c) that the Water Supply and Sanitation Operational Manual has been validly adopted by the Borrower and is in full force and effect. Section 7.03. The date June 9, 1993 is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 7.04. The obligations of the Borrower under Articles III, IV and V of this Agreement shall cease and determine on the date on which this Agreement shall terminate or on the date twenty years after the date of this Agreement, whichever shall be the earlier. ARTICLE VIII Representatives of the Borrower; Addresses Section 8.01. The Secretario de Estado en el Despacho de Hacienda X Cr6dito Pfblico of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. - 19 - Section 8.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Secretaria de Estado en el Despacho de Hacienda y CrSdito Pfiblico Tegucigalpa, D.C. Honduras Cable address: Telex: HACIENDA 1308 Tegucigalpa HACIENDA HO Honduras With copies to: (with respect to Parts A.2 and A.3 of the Project): Programa de Asignaci6n Familiar Apartado Postal No. 3216 Edificio Hondelec, 20 piso Telex: 1308 HACIENDA HO For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Welex: INDEVAS 248423 (RCA) Washington, D.C. 82987 (FTCC) 64145 (WUI) or 197688 (TRT) - 20 - 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 HONDURAS By Is/ Rene Arturo Bendana Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By Is/ S. Shahid Husain Regional Vice President Latin America and the Caribbean - 21 - 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: ..nount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Food supplements under 4,270,000 34% until an Part A.2 aggregate amount of the Project equivalent to SDR 2,130,000 has been disbursed from the Credit Account; then 20% until an aggregate amount equivalent to SDR 3,550,000 has been disbursed from the Credit Account; and 9% thereafter - 22 - Amount of the Credit Allocated % of (Expressed in Expenditures Catepory SDR Equivalent) to be Financed (2) Medicines 3,050,000 100% until an under Part B.5 aggregate amount of the Project equivalent to SDR 1,420,000 has been disbursed from the Credit Account; then 75% until an aggregate amount equivalent to SDR 2,560,000 has been disbursed from the Credit Account; and 30% thereafter (3) Works under 2,840,000 100% Parts B.1, B.2 and C.1 of the Project (4) Goods: (a) under Part A.3 200,000 100% of the Project (b) under Parts A.1, 1,500,000 100% B.1, B.2, B.3 B.4 and C.1 of the Project (c) under Part D.2 30,000 100% of the Project - 23 - Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (5) Consultants' services and training: (a) under Part A.3 380,000 100% of the Project (b) under Parts A.1, 2,140,000 100% B.3, C.2 and D.1 of the Project (c) under Parts A.4 290,000 100% and D.2 of the Project (6) Salaries and operational 1,140,000 100% of local expenditures under expenditures Parts A.1 (b) and B.3 (b) until an of the Project aggregate amount e7uivalent to SLR 500,000 has been disbursed from the Credit Account; then 75% of local expenditures until an aggre- gate amount equivalent to SDR 930,000 has been disbursed from the Credit Account; and 30% of local expenditures thereafter (7) Unallocated 1,960,000 TOTAL 17,800,000 - 24 - 2. For the purposes of this Schedule, 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 withdrawals shall be made in respect of: (a) payments made for expenditures prior to the date of this Agreement; (b) payments made for expenditures under Part B.3 (d) of the Project, unless the Borrower shall have furnished to the Association: (i) the program referred to in such part of the Project; and (ii) a financing plan satisfactory to the Association for the implementation of such program; and (c) payments made for expenditures under Category (2) of the table set forth in paragraph 1 of this Schedule, unless the Borrower, through MOH, shall have entered into an agreement with UNICEF or another United Nations' agency acceptable to the Association, in terms and conditions acceptable to the Association, for purposes of carrying out Part B.5 of the Project. - 25 - SCHEDULE 2 Description of the Project The objectives of the Project are to: (a) protect groups vulnerable to the Borrower's economic adjustment process by providing nutrition assistance to children and pregnant and nursing women among the poorest segments of the population to improve their nutrition status; (b) support the development and implementation of a long-term nutrition strategy in the Borrower's territory; (c) reduce maternal, child and infant mortality and morbidity rates by: (i) improving the access of such population to basic health services and safe water supply and sanitation; (ii) improving the quality of services provided by the MOH to such population; (iii) supporting health, nutrition and family planning education activities in respect of such population; and (iv) monitoring and controlling the spread of AIDS; and (d) strengthen the institutional capacity of: (i) MOH's sector planning and procurement procedures for medicines; (ii) FAP's program administration; and (iii) the Borrower, in monitoring and evaluating the Project. 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: Nutrition Assistance 1. Technical assistance to MOH (including the acquisition of goods therefor) in: (a) preparing and implementing a long-term nutrition policy in the Borrower's territory which will include, inter alia, an evaluation of the impact of FAP's food coupon program and its administrative capacity to manage its activities; (b) training its health staff (including the provision of salaries required therefor) and community workers in breast feeding, weaning and early childhood practices to benefit about 128,000 pregnant women, including mothers of children under the age of two in the Project Area; (c) supervising and evaluating the teaching of breast feeding, weaning and early childhood practices referred to in (b) above; and (d) carrying out a study of HIV's (Human Immunodeficiency Syndrome) transmission through breast feeding. 2. Provision of food supplements to about 255,000 pregnant and nursing women, children under five and primary school children living in the BMI and BMJF Areas, to be selected amongst the poorest segments of the population. - 26 - 3. Provision of technical assistance to FAP (including the training of its staff and the acquisition of goods required therefor) in: (a) strengthening its institutional capacity, including FAP's financial controls, through the provision of external auditing services; and (b) improving the quality and operational efficiency of the food coupon program. 4. Provision of technical assistance to the Borrower, through SCES, in carrying out annual censuses on anthropometric measurement of first graders in public schools (ages 6 through 9) in its territory. Part B: Strengthening Basic Health Services 1. Rehabilitation of about 130 primary health care centers in the BMI Area and acquisition of equipment therefor. 2. Construction of about 30 primary health care centers in the BMI Area and acquisition of equipment therefor. 3. Provision of technical assistance to MOH in: (a) carrying out a feasibility study for a radio communication network in the BMI Area, including the acquisition of goods to implement the results of such study; (b) strengthening its capacity to administer and supervise basic health services in the BMI Area through: (i) the hiring of about 28 physicians, 63 professional nurses, 168 auxiliary nurses, 6 laboratory technicians, 6 teachers of auxiliary nursing schools and 40 health promoters; (ii) the training of all the staff engaged in the provision of basic health services in such area; and (iii) the hiring of consultants for MOH's Project Unit; (c) carrying out a study to determine the factors constraining the private marketing of generic medicines in the Borrower's territory; (d) preparing and implementing a medium term AIDS control program for FYs 1993 through 1995, including the acquisition of goods required therefor; and (e) improving its procurement procedures for medicines. 4. Acquisition of vehicles to assist MOH's personnel in the administration and supervision of the primary health care centers in the BMI Area. 5. Acquisition of medicines for the primary health care services network in the Borrower's territory. - 27 - 6. Establishment of a maintenance fund in MOH f or purposes of routine maintenance of its buildings, equipment and vehicles in the BMI Area. Part C: Water Supply and Sanitation 1. Subprojects for the construction of water supply systems and sanitation facilities to benefit about 60,000 inhabitants in the rural areas of the Borrower's Departments of Choluteca, Valle, Intibuca and Lempira, including the acquisition of goods for the maintenance of such systems and facilities. 2. Provision of technical assistance to MOH in: (a) carrying out a study of current waste disposal conditions in the primary health care centers in the Project Area; (b) preparing a training manual for its primary health care staff on appropriate medical and waste disposal practices; and (c) designing and implementing a training program for its auxiliary nurses, laboratory technicians and waste collection and disposal staff. Part D: Institutional Strengthening of the Borrower 1. Provision of technical assistance to MOH in: (a) carrying out studies on mother and child health care and nutrition programs relating to the objectives of the Project; (b) strengthening the Borrower's financial controls, including the provision of external auditing services; and (c) assessing its cost recovery program for the health sector, such assessment to focus, inter alia on: (i) the incentives for increasing its cost recovery program; (ii) the development of equitable and affordable recovery schedules; and (iii) the assistance to the MOH for expanding its cost recovery program. 2. Provision of technical assistance to the Borrower, through SCES, in cocrdinating the implementation of the Project, including the acquisition of goods required therefor. The Project is expected to be completed by September 30, 1996. - 28 - SCHEDULE 3 Procurement and Consultants' Services Section I. Procurement of Goods and Works Part A: International Competitive Bidding 1. Except as provided in Part C hereof, goods other than medicines 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), subject to the addition of the following text at the end of paragraph 2.13 of the Guidelines: "Bidding documents for fixed-price contracts should provide that, when the contract award is delayed beyond the original bid validity period, the bid price will be increased by two standard 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 correction factor should not be taken into account in bid evaluation.". 2. To the extent practicable, contracts for goods other than medicines, shall be grouped into bid packages estimated to cost the equivalent of $100,000 or more. Part B: Preference for Regional Manufacturers In the procurement of goods in accordance with the procedures described in Part A.1 hereof, a margin of preference may be granted to bids offering goods described in the accompanying specifications which are manufactured to a substantial extent in any country, including Honduras, which is a party to the Mercado Coman Centroamericano, the common market created by the General Treaty of Central American Economic Integration signed at Managua, Nicaragua on December 13, 1960 by Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica (hereinafter called the CACM), in accordance with, and subject to, the following provisions: 1. For the purposes of Part B of this Schedule, the following definitions shall apply: (a) (i) the term "Qualified CACM Eid" means a bid submitted by a manufacturer established in the - 29 - territories of member countries, including Honduras, of the CACM, for goods manufactured or processed in such territories and for which the bidder shall have established to the satisfaction of the entity or agency inviting bids that the manufacturing or processing cost of such goods include a value added in such territories equal to at least 20% of the ex- factory bid price of such goods; (ii) the term "Non-Qualified CACM Bid" means a bid submitted by a manufacturer established in the territories of member countries, including Honduras, of the CACM, for goods manufactured or processed in such territories, other than any such bid classified as a Qualified CACM Bid; and (iii) the term "Foreign Bid" means any bid which is neither a Qualified CACM Bid nor a Non-Qualified CACM Bid. 2. All bidding documents for the procurement of goods shall clearly indicate any preference which would be granted and shall set forth the information required to establish the eligibility of a bid for such preference. 3. Bidders are required to state in their bid the c.i.f. (port of entry) price of imported goods and the ex-factory price of locally manufactured goods. 4. Except to the extent hereinafter provided, bids will be compared on the basis of their ex-factory or c.i.f. (port of entry) price adjunted in accordance with paragraphs 2.49 through 2.54 of the Guidelines. 5. After evaluation, responsive bids will be classified in one of the following groups: Qualified CACM Bids, Non-Qualified CACM Bids or Foreign Bids. 6. All bids in each group will be first compared among themselves, to determine the lowest evaluated bid in each such group. The lowest evaluated bids of each group will then be compared with each other and if, as a result of this comparison, an evaluated Qualified CACM Bid or Non-Qualified CACM Bid is the lowest it will be selected for purpose of award. - 30 - 7. If the lowest bid in the comparison under paragraph 6 above is a Foreign Bid, all Foreign Bids will be further compared with the lowest evaluated Qualified CACM Bid as determined under paragraph 6 above. For the purposes of this comparison only, each Foreign Bid will be compared on the basis of the sum of its c.i.f. (port of entry) price adjusted in accordance with the provisions of paragraph 4 above, plus an amount equal to the smaller of: (i) the difference between the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of goods offered in such Foreign Bid and that applicable to a Qualified CACM Bid; or (ii) 15% of the c.i.f. bid price of such goods. If the Qlalified CACH Bid is the lowest evaluated bid in such comparison, it shall be selected for the purpose of award; otherwise, the lowest evaluated Foreign Bid as determined under paragraph 6 above shall be so selected. Part C: Other Procurement Procedures 1. Goods other than medicines estimated to cost the equivalent of $25,000 but less than $100,000 per contract, up to an aggregate amount equivalent to $2,000,000, may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association. 2. Works estimated to cost the equivalent of $50,000 but not more than $100,000 per contract may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Association. 3. Goods other than medicines estimated to cost the equivalent of less than $25,000 per contract, up to an aggregate amount equivalent to $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. Works estimated to cost the equivalent of less than $50,000 per contract, up to an aggregate amount equivalent to $2,000,000, may be procured under contracts awarded on the basis of comparison of price quotations obtained from at least three contractors eligible under the Guidelines, in accordance with procedures acceptable to the Association, provided, however, that works estimated to cost the equivalent of $35,000 or less and up to an aggregate amount not exceeding the equivalent of $870,000, may be - 31 - procured through direct contracting, in accordance with paragraph 3.5 (f) of the Guidelines. 5. Medicines shall be procured directly from UNICEF or another United Nation's agency acceptable to the Association, 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: (i) each contract to be awarded pursuant to the provisions of Part A.1 of this Section; (ii) the first two contracts to be awarded pursuant to the provisions of Parts C.1 and C.2 of this Section; and (iii) the agreement referred to in paragraph 3 (c) of Schedule 1 to this Agreement, 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 4 to this Agreement. (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 10% is hereby specified for purposes of paragraph 4 of Appendix 1 to the Guidelines. - 32 - Part E: Standard Bidding Documents All procurement of goods and works to which international or local competitive bidding applies shall be carried out using standard bidding documents acceptable to the Association. Section II. Employment of Consultants In order to assist: (a) the Borrower in carrying out Parts A.1, A.4, B, C and D of the Project; and (b) FAP in carrying out Parts A.2 and A.3 of the Project, the Borrower shall employ and cause FAP 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 Consultants Guidelines). Section III. Special Provisions A. In addition and without limitation to any other provisions set forth in this Schedule or the Guidelines, the following principles of procurement shall expressly govern all procurement of goods and works referred to in Parts C.1 and C.2 of Section I of this Schedule: 1. Contracts shall be awarded to the lowest evaluated bid in accordance with criteria set forth in the bidding documents, and without taking into account, in the evaluation, the financial cost of foreign exchange components. 2. Foreign bidders shall not, as a condition for submitting bids, be required to: (a) be registered in Honduras; (b) have a representative in Honduras; (c) be associated with Honduran suppliers or contractors; (d) certify that, in their country of origin, Honduran suppliers or contractors are allowed to participate in competitive bidding procedures under equal conditions with other bidders. 3. Contracts shall not be divided for the sole purpose of reducing contract amounts. B. In addition and without limitation to any other provisions set forth in this Schedule or the Consultants Guidelines, the following - 33 - principles of procurement shall expressly govern all procurement of consultants' services referred to in Section II of this Schedule: 1. Foreign consultants shall be permitted to participate in the selection process even if there is availability of Honduran consultants for the services being procured. 2. Foreign consultants shall not be required to be registered with Honduran associations or to be associated with Honduran consulting firms as a condition for participating in any selection process. - 34 - SCHEDULE 4 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 $2,000,000 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. - 35 - (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 - 36 - 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. 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