CONFORMEDCOPY

CREDITNUMBER4379-BO

FinancingAgreement
(Lakc TiticacaLocal SustainablcDevclopmcntProject)

bctwccn

REPUBLICOF BOLIVIA

and

INTERNATIONAL

DEVELOPMENT

ASSOCIATION

D a t e dF c b r u a r y1 1 , 2 0 0 8

ln, /vr." B.llt Kalteis

3
.rtq rolro ot COlYltl0S
tl,arltt\ .i.$rtrtcrr"Ys@i,

CREDIT NUMBER 4379.BO

F I N A N C I N GA G R E E M E N T
AGREEMENT datcdFcbruaryI l, 2008,cntcrcdinto bctwccnREpUBLIC OF
BOLIVIA ("Rccipicnt") and INTERNATIONAL DEVELOPMENT ASSOCIATION
("Association").The Recipientandthc Association
herebyagreeasfollows:
ARTICLE I -

GENERAL CONDITIONS; DEFINITIONS

1.01. Thc Gencal Conditions(as defined in thc Appcndix to this Agrccmenr)

constitutean integralpart of this Agrecment.
1.02. Unless the context requiresothcrwise,thc capitalizcdtcrms uscd in this
Agreementhavethe meaningsascribedto themin the GenealConditionso in
the Appendix to this Agreement.
ARTICLE II -

FINANCING

2.01. Thc Associationagreesto cxtcndto thc Recipient,on thc tcrmsand conditions

sct foth or cfcrrcd to in this Agrecment,a crcdit in an amount cquivalentto
twelve rnillion cight hundrcd thousand Spccial Drawing fughts (SDR
12,800,000)(variously,"Credit" and "Financing")to assisrin financingthc
projectdcscribed
in SchcduleI to thisAgrccmcnt("Projcct'..
2.02. Thc Rccipientmay withdrawthe proccedsof thc Financingin accordancc
with
SectionIV of Schcdulc2 to thisAsrecment.
2.03. Thc Maximum CommitmentChargcRate payablcby the Rccipicnt on thc
UnwithdrawnFinancingBalanccshallbc onc-halfofonepcrccnt(l12 of l%) pcr
annum.
2.04. The ScrviceChargcpayableby thc Rccipienton thc WithdrawnCrcdit Balancc
shallbc cqualto thrcc-fourths
of oncpcrccnt(3/4of I %) pcr annum.
2.05. Thc Payrcnt Datcsarc Fcbruaryl5 andAugustl5 in cachycar.

2
2.06. The principal amountof thc Crcdit shall bc rcpaid in accordancewith thc
repaymcntschedulcsctforthin Schcdulc3 to thisAgrccmcnt.
2.07. Thc PaymcntCurrcncyis Dollars.
ARTICLE III - PROJECT
3.01. The Recipientdeclarcsits commitmentto the objectiveof thc Project. To this
cnd, the Recipicntshall carry out thc Projcct though MPM and VMT and with
the assistance
of FPS, the Recipient'sMinistry of Watcr throughits Viccwith
Ministry of Basic Scrvices,and the ImplcmentingEntities,in accordance
thc provisionsof Aficle IV ofthe GcneralConditions.
3.02. Without limitationupon thc provisionsof Section3.01 of this Agrcemcnt,and
shallotherwiseagrcc,thc Recipient
exceptas thc Rccipicntandthe Association
shall ensurethat thc Projcct is carricd out in accordanccwith the provisionsof
Schcdulc2 to thisAsrcemcnt.
ARTICLE IV -

REMEDIES OF THE ASSOCIATION

consistofthc following;
4.01. Thc AdditionalEvcntsofSuspcnsion
(a)

FPSor the LnplcmcntingEntitiesshallhavefailed,in thc opinionof thc

Association,to pcrform any of their obligations undcr the Subsidiary
Agreementor the ImplementationAgreements,as thc casemay be.

(b)

The ProcuremcntSupremeDecrcc has bccn amcndcd,suspended,

abrogatcd,rcpcalcdor waivcd so as to rcndcr its Aiclc 42 (a)
andno provisionanalogous
ineffective,in thc opinionof theAssociation,
to suchArticle42 (a) hasbecnadoptcdto rcplaccsaidprovision.

(c)

Any ImplementationAgrcemcnt or any of its provisions has bcen

amended,suspcnded,abrogated,tenninatcd,waived or not cnforccd,so
as to affect materially and advcrsely,in thc opinion of the Association,
the abiliiy of the FPS and thc ImplementingEntrtiesto perfonn their
ascontemplatcd
underthc provisionsof thisAgrcemcnt.
obligations

ofthc following,namcly,thatany
consists
4.02- The AdditionalEvcntof Acceleration
eventspccifiedin Section4.01of this Agreemcntoccusand is continuingfor a
pcriodof 60 daysafternoticcof the cvcnthasbeengivenby the Associationto
the Recipient.

3
ARTICLE V - EFFECTIVENESS;
TERMINATION
5.01. TheAdditional
Conditions
of Effcctivcncss
consist
of thcfollowing:
(a)

TheSubsidiary
Agrecment
hasbccnexecutcd
on bchalfof theRecipicnt
andFPS.

(b)

Thc Opcrational
Manualhasbccnadoptcdin a anncrsatisfactory
ro rnc
Association.

5.02. The Additional Legal Mattcr consistsof the following, namcly, that thc
SubsidiaryAgrccmenthas beenduly authorizcdo ratificd by thc Rccipicnt and
FPSand is lcgallybindinguponthe Recipicntandthe FpS in accordancc
with its
tcns.
5.03. without prcjudiccto the provisionsof thc Gencralconditions,the Effectivcncss
Deadline is thc datc onc hundred twenty (120) days aftcr thl: datc of this
Agrccment,but in no case later than thc eightcen(lg) months aftcr thc
Association's
approvalofthe Creditwhichexpireon June22, 2009.
ARTICLE VI 6.01.

REPRXSENTATIVE;ADDRESSES

The Recipient's
planning.
Representative
is its Ministerof Dcvelopment

6.02. Thc Rccipient'sAddrcssis:

Ministeriode Planificacin
del Dcsarrollo
Viccministcriodc InvcrsinPblicay Financiamicnto
Extcmo(VIPFE)
piso I I
Palaciodc Comunicaciones,
La Paz,Bolivia
Facsimilc:
0l I-591-2-231-7408
(with a copyro: 0tI-591_2_239_289
t)

4
6.03. The Association's
Addressis:
Intcrnational
Dcvclopmcnt
Association
l 8 l 8 H S t r e c tN, . W .
W a s h i n g r oD
n ,. C . 2 0 4 3 3
Unitcd Statcsof Arncrica
Cable:

Telcx:

Facsimilc:

INDEVAS
Washington,
D.C.

248423(MCt)

t-202477 _6391

AGREED at thc Districtof Columbia,Unitcd Statesof Amcrica,as of thc day

andyearfirst abovcwrittcn.

REPUBLICOF BOLIVIA

By /s/ MarioGustavoGuznrnSaldaa
AuthorizcdRcprcscntativc

INTERNATIONALDEVELOPMENT
ASSOCIATION

B y / s /C . F c l i p cJ a r a m i l l o
AuthorizedRcprcscntativc

SCHEDULE I
Projcct Dcscription
Thc objcctivcof thc Projcctis to contributcto Iocl sustainablidcvclopmcntin
theRecipient'ssidcof thc LakeTiticacawatcrshed.
Thc Projcctconsistsof thc followingparts:
Part l. Supportto TourismDevcloomcnt
andCulturalPotection
(a)

Carrying out by Municipaliticsand Rccipicnt's community groupswith

FPS support,of infrastructurcinvestmentsto facilitatc thc cnhancemcnt
of cultural,social,economicand cnvironmcntal
asscts,including iirrcl
alia: (i) the impovementof tourist sitcs;(ii) the provision of public rcst
areasandbathroorns;
and(iii) thc cstablishment
of interpretation
ccntcrs,
bikepathsandsmalldocks.

(b)

Carrying out of communify investmentswith VMT support to cniancc

cultural,social, economic,and cnvironmentalassets,including,lirlcr
alia: (i) local environmental
(ii) gucsthouscs;and (iii)
improvcmcnts;
marketsandtouristttractions.

(cJ

(i) Protcctionof cultural hcritagcmonumcntsin Lakc Titicaca's Islq del

.So1and .Is/ade la Luna; and (ii) rcstorationof prc-Hispanicagricultural
landscapcs,
trailsandartisticandhistoricassets
in colonialchurches

(d)

Provisionof grantsfor communitydcvclopmcntfor tourismactivitcs,

includingthc productionof handicraftsand thc financingof cultual
cvcntsandstratcgicstudics.

Part2. BasicScrviccs
(a)

Carryingout of: (i) waterandsanitation

infrastructurc
for LakcTiticaca's
srnall rural communitics;and (ii) trainingand provisionof tcchnical
assistance
to thc EPSA.

(b)

Provisionof technicalassistance,
goodsand worksto devclopsanitarion
facilitiesand cxtendand rchabilitatcexistingscweragcnetworksand
treatmentplans in thc cities of Copacabana,Tiquina, Achacachi,
Tiwanakuand Viacha.

(c)

Provisionof technicalassistancc,
goods and works to improve solid
wastecollection for the cities of Copacabana,
Achacachiand Tirvanaku,
including:(i) streetcleaning:(ii) transponation;
(iii) recycling;and (iv)
final disposalin sanitarylandfills.

(d)

Povisionof tcchnicalassistancc
to ensurcsustainablc
serviceprovision,
throughthc crcationof EPSA that will rnanagcwatcr, wastcwatcrand
solidwastcscrviccsandwhoscopcratingandmaintenancc
costsarc to bc
covcrcdby thc uscsfccsby thc cndof thc projcct.

(e)

Provision of FPS OperatingCosts for the carrying out of basic servicc

activiticsundcr Parts2 and I (a) of the projectand financingofaudits for
thc pans of the Projcctcxecutcdby FpS.

Part3. Institutional
Strcngthenins
andProiectManagcment
(a)

Provisionof tecluricalassistance
to: (i) carry out tourism studicsto
support a long tcrm program for tourism devclopment in thc Lakc
Titicaca basin and neighboring areas; and (ii) devclop a nurKenng
strategyto promote the Recipicnt'sintcrnationaltourism potcntial,
includingtheprovisionoftrainingin communications
andtcchnologyfor
VMT.

(b)

Provision of tecturical assistanceto strcngthcn thc Rccipicnt's

rnunicipalitics'
capacity,includingthc dcsignof mcdiumtcnn and lonq
tcrm plansfo their sustainable
dcvclopment.

(cl

Provisionof tcchnicalassistance
to strengthenthe local communitics'
capacityto participate
in tourismdevelopmcnt
activitics.

(d)

Provisionof technicalassistanccto strengthcnthc capacityof the

ImplemcntingEntitics,includingthc crcationof an advisorygroup on
lakc managcmentcompriscd of Rccipient's rcprcscntativesand
internationalexpcrts.

(e)

(i) Provisionof tcchnicalassistancc

to updateannuallythc technrcar,
touismandsocialdataofthe Stateofthe Lakc Reporttand(ii) execution
of a communication
stratgysummarizing
thc Stateof thc Lakc Rcporr,
with a spccificfocuson thc communityliving within rhcprojcctArea.

(0

Provisionof technicalassistance
to thc VMT to strcngthcnits capacrry
for projcctcoordination
and nanagemcnt,
includingthc opcrationof its
PCU andthc carryingout ofaudits

SCHEDULE 2
Projcct Exccution
ScctionI.

I mDlcnrcntaton
Arrrnqcnrcnts

A.

SubsidiaryAgrecmcntand ImplemcntationAgrccmcnts

l.

To facilitatc the carrying out of thc Projcct,the Recipientshall make part of the
procccds of the Financing available to FPS through a subsidiary agrecmenr
between tbe Recipient and FPS, under tcnns satisfactoryto the Association
("SubsidiaryAgecrnent"),
including,inter alia, FPS'sobligationto providcall
the necessary information and documentationto VMT relatcd to FPS's
responsibilities
undrthe Project(includingbut not limited to, thc information
requiredfor compliancc
with SectionIII.D of Schcdulc2 to thisAgreemcnt).

2.

The Recipicntshallmaintainall of thc nccessary

conditionsfor FPS to comply
with its obligations
undcrthc Subsidiary
Agrecmcnt.

3.

Withoutlirlitationto theprovisions
ofparagraphI abovc,FPSshallcntcrinto an
agrcemcnt with cach of thc Implcmcnting Entities ("Implcmentation
Agrecment"),under tenns and conditionssatisfactoryto the Association,
includingthoseset forth in thc Operational
Manual,with respcctto thc role and
responsibilities
of thc Implcmcnting
Entitics.

4.

Thc Recipientshall excciseits rightsunderthe SubsidiaryAgrccment,and causc

FPS to cxerciscits rights undcr the Implemcntation
Agrecmcnts,in such a
manncras to protectthe interestsof thc Rccipientand thc Associationand to
accomplishthc purposcsof thc Financing. Exccpt as thc Associationshall
otherwiscagrce,the Recipicntshallnot assign,amend,abrogatc,waivcor fail to
enfocethc SubsidiaryAgreemcntor any of its provisions.

5.

In thc caseof a conflictbctweenthe provisionsof the SubsidiaryAgrccmcntor

the ImplcmcntationAgrcementsand the provisionsof this Agcemcnt,thc
Recipicntwill ensurethattheprovisions
of thisAgrccmcntwill prevail.

B.

Institutionaland Othcr Arrangcmcnts

l.

The Recipientshall,with thc assistance

of FPS and thc ImplcmcntingEntities,
carry out thc Project,or causcthc Projcct to bc caricd out, in accordanccwith
the povisionsof:
(a)

thisAgrecment;

(b)

the SubsidiaryAgreement;

2.

(c)

the ImplementationAgrcemcnts;and

(d)

thc Opcrational
Manual.

At all tinlcsduringthc cxccutionof thc Projcct,VMT shll maintaina qualificd

team responsiblefo the implementationof thc Project ("PCU"), with staffing
qualifications, functions and responsibilitiessatisfactory to the Association,
including,interalia, thefollowingrcsponsibilities:
(a)

overall planning,coordination,monitoringand evaluationof Projcct

activities;and

(b)

the updatingof the ProcurementPlan and the elaborationof thc annual

plan.
implementation

3.

At all timesduringthe executionof the Projcct,the RccipientshallcauseFPSto

ofParts I (a) and2 of
fol thc implemcntation
maintainqualifiedstaffresponsiblc
the Pojectwith staffingqualifications,functionsand responsibiliticssatisfactory
to the Association.The above-mentioncdstaff shall carry out quality control
activities,coordination,monitoringand oversightof Parts 1 (a) and 2 of thc
Prqect.

4.

Thc Recipientshall cstablishnot later than threemonthsaftcr the Effcctivc Datc,

and thercaftc maintain throughout the implementation of the Project, a
committcc (lnter-lnstitutionalComrnittec)to facilitatc information sharing
The IntcrlnstitutionalComrnittccshall rnect at
among rclevantstakcholdes.
lcast twicc per yea to discussactivities in the Lake Titicaca watcrshcdand
progresson the ProJect.

c.

OpcrationalManual

l.

Thc Recrpicnt,throughMPM andVMT, shall carry out thc Projcct,or causethc

Projcct to be canied out, in accodanccwith thc tcrms of a manualsatisfactoryto
the Association (the Operational Manual). Except as the Association shall
otherwise agree, the Recipicnt shall not amcnd, waive or fail to cnforcc tbc
OperationalManual or any provisionthercof.In caseof any conflict betweenthc
tenns of this Agrcementand thoseof the OperationalManual, thc tcrms of this
Agreemcntshallprevail.

2.

The OpcrationalManual shall include provisionsdctailing proccdurcsand

guidclincsfor thc carryingout ofthc Projcct,including,inler ala:
(a)

thc proceduresfo the preparation,rcview and approval of rcports

pursuantto thc Projcct'sfinancialmanagcmcntarrangcmcnts;

D.

(b)

procuementand contractingprocedurcs
consistent
with Schedule2 to
this Agrccment,to bc applicablcto tltc contractsfor thc works,goods,
and consultants'serviccs
requiredfor thc Projcctand to bc financcdout
of Lhcprocccdsof thc Crcdit;

(c)

Projectimpact and implementationindicatorsand the proceduresfor the

monitoring and evaluationof the Projcct,including for complianccwith
ScctionII ofSchedulc2 to thisAgrecment;

(d)

the procedurcsfor the Recipicnt'spreparation,

rcvicw and approvalof
Crcdit procccds withdrawal applicationsto thc Association, in
conformity with the instructionsthat the Associationmay givc to the
Recipientin this rcspect;and

(e)

the cnvironmentalmanagcmcntcriteria and proceduresfor thc carrying

out of rehabilitation and construction works undcr the Projcct, thc
Resettlement
Framework,and thc mcchanisms
to addressthe culturally
specificncedsof the Aymara to ensurcthat the bcnefitsof thc Projectarc
culturally appropriateand that there is broad community supportfor the
Projcct.

Anti-Corruption
The Recipientshallcnsuethat the Projcctis carriedout in accordancc
with thc
provisionsof tbeAnti-Corruption
Guidclincs.

E.

Othcr Covcnants
l.

Not latcr than one year aftcr thc Effcctive Datc, thc Rccipient and thc
Association shall carry out a comprehensivereview of thc Projcct
focused on Project pcrfomancc. Aftcr said rcvicw is complctcd, thc
Recipientshall take, if necessary,any actions recommendcdto cmedy
any problcrnsidcntificdduringthc revicw.

2.

Thc Recipientshall maintainthroughoutthc implementationof thc

Project, thc units referred to in paragraphB.4 of Scction IV to this
Schedulc.

ScctionII.
A,

Proicct Monitorinq.Rcoortingand Evaluation

Projcct Rcports
Thc Rccipicntshallrronitorandcvaluatcthc progrcssof thc Projcctandprcparc
or cause to be preparcdProjcct Rcports in accordancewith thc provisions of
Section4.08 of the GcncralConditionsandon thc basisof the Indicators.Eacb

t0
Projcct Rcport shall cover the periodof one calcndascmester,and shall be
fumishedto thc Association
not laterthanone monthaftcr thc cnd of thc pcriod
coveredby such report.Thc Rccipicntshall rcvicw thc mosl rcccnt Project
with
sctni-annual
ncctngs
duringthc Association's
Rcportwith thc Association
lnay rcqtlcst.
the Rccipicnt,or on suchlatcrdatcsasthc Association
B.

FinancialManagcmcnt,FinancialReportsand Audits

l.

a financialmanagcmcnt
Thc Rccipientshallmaintain(or causcto be maintained)
systcm in accodanccwith thc provisionsof Scction 4.09 of thc General
Conditions.

2.

The Recipient shall prepare (or cause to bc prcparcd) and fumish to thc
Associationnot latcr than 45 daysafter the end of cachcalendarqualer, intcrim
un-auditcd financial reports for each Part of the Projcct covcring the calcndar
quartcr,in form and substanccsatisfactoryto the Association.

3.

The Rccipientshall, though VMT, and causeFPS to, ltave thc Financial
Statementsfor each part of the projcct to be audiied in accodanccwith thc
provisionsof Section4.09 (b) of the GcncralConditions.Each audit of thc
shallcovertheperiodof onefiscalyearof the Rccipicntfor
FinancialStatemcnts
the respcctivepart of the Project,commencingwith the carlier of: (a) the fiscal
year in which thc first withdrawal undcr the Project PrcparationAdvancc was
made;and (b) the fiscal ycar in which the first withdrawalunder this Agreemcnt
was made. The audited Financial Statementsfor cach such pcriod shall bc
fumishcd to the Associationnot later than six months afte the end of such
period.

ScctionIII.

Procurcmcnt

Gcncral
l.

Goods, Works and Non-ConsultantScrvices, All goods,works and nonconsultantserviccsrcquircdfor thc Projcctand to be financcdout of the proceeds
of the Financingshall be procuredin accordancewith the rcquircmcntssct forth
Guidclincs,andwith thc provisions
or rcfcrredto in SectionI of thc Procurcmcnt
of thisScction.

2.

servicesrequircdfor thc Projectandto

Consultants'Scrviccs. All consultants'
be financcdout of thc procccdsof thc Financingshallbc procurcdin accordancc
with thc rcquircmentssct forth or cferred to in Sections I and IV of the
with theprovisions
Consultant
Guidclincs,
of thisSectionandwith theprovisions
of ScctionII of AnncxA to thisSchcdulc.

3.

Dcfinitions. The capitalized tcrms used bclow in this Section to describe

particularprocurcmcntmcthodsor rethods
of rcview by thc Associationof
particular contracts,refcr to the corrcspondingmethod dcscribcd in thc
Procurcnrcnt
Guidclircs,
or Consultant
Cuidclincs,as thc cascrrraytrc.

B.

Particulr Mcthods of Procurcmcntof Goods,Works and Non-Consultant

Scrviccs
IntcrnationalCompctitivcBidding. Exceptasorherwise
providedin paragraph
2 bclow, goodsand works shall be procuredundercontractsawardcdon the basis
of IternationalCompctitiveBidding.

2.

Othcr Mcthods of Procurcmcnt of Goods, Works and Non-Consultant

Scrvices. The following table specifiesthe methodsof procurement,other than
Intemational Competitive Bidding, which may be uscd for goods, works and
non-consultantserviccs. The ProcurcmcntPlan shall spccify thc cicumstances
underwhich suchmethodsmay be uscd:
ProcuremcntMcthod
(a)

National Compctitivc Bidding, subjccr to the

additionalprovisionssetforthin ScctionI of Annex
A to thisSchcdulc2.

(b)

Shopping.

(c)

DirectContracting.

(d)

CommunityParticipation
in Procurement.

c.

Particular Mcthodsof Procurcmcntof Consultants'Scrviccs

l.

Quality- and Cost-bascdSclcction. Exccptas othcrwiseprovided in paragraph

2 bclow,consultants'scrvices
shallbe procurcdundcrcontactsawardedon thc
basisof QualityandCosrbasedSclcction.

2.

Othcr Mcthods of Procurcmcntof Consultants'Scrviccs.Thc follorvingtablc

specificsrnethodsof procuremcnt,
othethanQualityand Cost-based
Sclection,
which may be usedfor consultants'
seviccs.The Procuremcnt
Planshallsocci
thecircunstances
undcrwhichsuchmcthodsmay bc used.

l2
I Procuromcnt Mcthod

(a)

Quality-bascdSclcction.

(b)

Sclcctionundca FixcdBudgcr.

(c)

LeastCostSelection.

(d)

SclcctionBasedon Consultant's
eualifications.

(c)

SingleSourceSclection.

(t)

Proceduresset forth in paragraphs5.2 and 5.3 o f

the ConsultantGuidelinesfo thc Sclcctionof
IndividualConsultants.

(S)

Sole Source Proccdurcs for thc Sclcction of

IndividualConsultants.

D.

Revicwby thc Associationof procurcmcntDccisions

l.

Thc Pocurcment
Planshallsetforththosccontracts
which shallbc subjcctto the
Association's
PriorRcview. All othcrcontracts
shallbc subjcctto Post Rcvicw
by theAssociation.

2.

AnnualProcurement
Audits. The Rccipient,
throughVMT shall:
(a)

not later than April 30 of cach ycar during thc implctncntation

of thc
Projcct,beginningon April 30,2009,contraitindepcndcnt
auditorswitl.)
expenenceand qualifications
satisfactory
to the Association,opcrating
unde terms of efeencesatisfactoryto the Association,to'perform
a
procurcment
auditof all thc procurcment
recordsanddocumcntation
lor
the Project, relating to thc Recipient's previous fiscal year
_
of
ilnplcmentation
of the projcct,in accdance
with procurcmcnt
iuditing
principlesacceptable
to theAssociation
(..procurement
Audit,,);

(b)

not latcr.thanJuly 3l ofeach year during thc implcmcntation

of the
l'roject, beglnnngon July 31, 2009 and continuingfor
cach year
thcreafte during thc implcmentationof the projccf furnish
to thc
Associationthc report, in fonn and substancesatisfactory
to thc
Association,on thc PocurcmcntAudit completcdfor thc
Rcipicnt,s
prior fiscal year;

(c,

at all times during the implcmentation

of thc Project,funish to thc
Associationand to the auditorspcrforminga ProcurcmcntAudit, such
other information conccrning thc procurcmcnt rccords and
documcntation
for thc Projcctas thc Associationor thc auditorsnray
ll onr timc to tinlc fcasonably
rccucst;
lnd

(d)

not latcr than Septembcr

30 of eachyear duringthe implemcntation
of
the Project,beginningon September
30,2009,cxchangcviewswith thc
Associationon thc rcsultsof thc Procurcmcnt
Audit cornolctcdfor thc
Recipient's
prior fiscalycarandthereafter
implerncnt
suchiccommended
measurcs,
takinginto accountthc Association's
vicwson thc mattcr.

ScctionIV.

W i t h d r a w a lo f t h c P r o c c c dos f t h c F n a n c i n s

Gencral
The Recipientmay withdraw the proceedsof thc Financingin accordancervith
the provisionsof Article II of the GcneralConditions,this Section,and such
additionalinstructions
as the Association
shallspccif by noticeto thc Rccipicnt
(including the "World Bank DisbusementGuidelinesfor Projects" dated May
2006,as revisedfom time to timeby thc Association
andas madeapplicablcto
thisAgrccmentpursuantto suchinstructions),
to financcEligiblcExpcnditurcs
as
setforth in the tablein paragraph2 below.

2.

Thc followingtablespecifiesthc categorics

of EligiblcExpenditurcs
thatmay bc
financedout of theproceeds
of thc Financing("Category"),
the allocations
of the
amountsof thc Crcdit to eachCatcgory,and thc pcrccntagcof cxpcnditurcsto bc
financcdfor Eligible Expenditurcsin eachCategory:

Amount of the Crcdit

Allocatcd
Catcgory

(l) (a) Works,goods,Training,

consultantsservicesundcrPart I (a)
of the Project;and
(b) Works, goods,Training,
consultantsservicesand \A4T
OperatingCostsundcr PartsI (b),
(c) and (d) of thc Project

Gp$!sdi!-SDB)

Pcrccntagcof
Expcnditurcs
to bc Financcd
(inclusivcof Taxes)

3,450,000

t00%

1,650,000

t00%

t4

Catcsorv

(2) Works, goods,consultantsservrces

andTraining underPart 2 of the
Project,includrngaudits

(3) Goods,consultantsservices,
Training and VMT Operating
Costsundcr Part 3 ofthc Projcct,
includingaudits

Pcrccntagcof
Expcnditurcs
to bc Financcd
(inclusivo
ef Taxcs)

5,300,000

100%

1,300,000

t00%

(4) FPSOperatingCosts

500,000

(5) Refundof ProjectPreparation

Advance

600,000

TOTAL AMOUNT

l.

Amount of thc Crcdit

Allocatcd
(cxnrcsscdin SDR)

5% of the totalcost
of thc woksunder
thc Projcctpaidin
tranchesas sct forth
in the Operational
Manual
Amountpayablc
pursuantto Section
2-07ofthc Gcncral
Conditions

12,800,000

For purposesofthe tablein paragraph2 abovc,thc tcrms:

(4,

(b)

"Training"

means reasonable cxpcnditures (other than thosc for

consultants'scrviccs)incurredby VMT for the purposcsof thc Projcct
and directly rclated to training activitiesdescribcdin the Projccr,
including, inter aliq, costselatcdto workshops,seminars,conferenccs,
study tous,trainingregistrationfecs,facility rcntals,and travcl costsand
per dienrsfor \44T and FPScivil scrviccofficials or cmployccs;
"FPS

OpcratingCosts"meansreasonablc
recurrcntexpcnditures
(orncr
than thoscfor consultants'scrvices)incurrcdby FPS for thc purposesof
thc Projcctand directlyrelatcdto thc activitiesdcscribcdin the Projcct,
includrng,inter alia, salaicsof staff, officc matcialsand supplics,
operationand maintcnancc
of office cquipmcnt,insurance,
vchiclcand
equipment opcration, bank chargcs on thc Dcsignatcd Accounr,

t)
travclandper
phoncand fax charges,mcdiacampaigns,
transportation,
printing of
and
/irof FPS officials for purposesof Projectsupervision
and
materials;
(c)

"VMT OperatingCosts"meansreasonablerecurrentexpenditures(other
than thosc for consultants'services)incurredby VMT for the purposes
of the Projectand directly relatedto the activitiesdescribedin the
and
Project,including,inler alia, officematerialsandsupplies,oPeration
and
equipment
maintcnanceof officc equipment,insurancc'vehicle
Account,utilities,rentalof
operation,bank chargcson the Designated
oifi". ,pu"", transportation,phone and fax charges,media campaigns'
travel a;d per diem of YMT and the Recipient'sVice Ministry of Basic
Servicesofficials for purposesof Project supervisionand printing of
materials.

B.
l.

Withdrarval Conditions;WithdrarvalPcriod
the provisionsof PartA of this Scction,no withdrawalsshallbc
Notwithstanding
made for payments made prior to the date of this Agreement, exccpt that
may
equivalent
amountnot to exceed$1,000,000
up to an aggregate
rvithdrawals
case
before
no
but
in
date
prior
to
such
year
one
payrnents
made
be made for
November9, 2007 for Eligible Expcnditures.

2.

No withdrawalsshall be madefor paymcntsunder Categories( l) and (2) of the

table in paragraphA above,until the respectiveImplementationAgreementwith
Entityhasbeenexecuted.
eachImplementing

3.

No rvithdrarvalsshall be madefor paymentsunder Categories( l) (b) and (3) of

the table in paragraphA above, until a financial managementsystcm within
is operational.
to theAssociation,
VMT, satisfactory

4.

5.

No withdrawalsshall be madefor paymentsunder CategoriesI (a) and 2 of the

of the
to the satisfaction
tablein paragraphA abovc,until FPS hasestablished
(ii)
officc;
executive
FPS's
under
unit
and
monitoring
ssociation:ii) ihe control
unit'
monitoring
(iii.)
procurcmcnt
the
unil; and
theenvironmcntal
T h eC l o s i n gD a t ei s J u n e3 0 , 2 0 1 3 .
The Recipientshallrcviov andadjustannually,or at any othertimc agreedwith
shallbe unnccessary
thc FPSOpcratingCosts.Suchadjustmcnt
thc Association,
no change in FPS
revcals
review
that
said
is
satisfied
if the Association
OpcratingCosts.

lo

A n n c xA
to
SCHEDULE 2
Additional ProvisionsRclatingto
Particular Methodsof Procurcment
ScctionI.

Goodsand Works

Without limitation upon thc provisionsof Schedulc2 to this Agreementor the

Procurement
Cuidelines,the followingadditionalprovisionsshallapplyto all goodsand
works procuredfor the Project (pursuantto SectionIII.A.I of Schedule
2 to this
Agreement)under contractsawardedon the basis of National CompetitiveBidding
("NCB Contracts"):
l.

A meritpointsystemshallnot bc usedin thepre-qualification

ofbids.

2.

The arvardof goodsandworkscontracts

shallbe basedexclusivelyon priceand,
wheneverappropriate,shall also take into accountfactors similar to those
eferredto in paragraph
2.51 of the Guidelines,
providcd,however,that the bid
cvaluationshall alwaysbe basedon factorsthat can be quantifiedobjectively,
and the procedurefor suchquantification
shallbe disclosedin ths invitationto
bid.

3.

The Recipientshallopenall bids at the stipulatedtime and placein accordance

with a procedure
satisfactory
to theAssociation.

4.

Thc Recipientshallusea singleenvelope

proccdure.

5.

Whenevethere is a discrepancybetweenthe amountsin figuresand in words of

a bid, the amountsin wordsshallgovem.

6.

Exceptas the Associarion

shallotherwiseagree,the biddingprocessshallnot be
declaredvoid if only three(3) bids or lesshavebcensubmittedunlesssuchbids
havcbccndctcrmincdnot to bc rcsponsivc.

7.

Any standards
and technicalspecifications
(quotedin the bidding documents)
tltat arc at leastsubstantially
cquivalentto thc nationalstandards
and technical
specifications
shallbe acccptable.

8.

Forcignbiddersshallbe allowedro participate.

9.

Forcignbiddcrsshall not bc rcquircdto lcgalizcany docrmcntation

rclatcdto
theirbidswith Bolivianauthorities
asa prerequisite
for biddrng.

t7
10.

No marginofpreference
shallbe grantedfor anypanicularcategoryofbidders.

It.

The auctionprocedwe(PujaAbierta)shallnot be used.

12.

In the eventthat a bidderwhoscbid was evaluatedas the bid with the lowest
evaluatcdprice withdrawsits bid, thc contractmay be awardcdto the second
lou'estrcsponsive
cvaluated
bid.

ll.

Forcignbiddcrsshallnot,as a conditionfor submittingbids,bc requiredto enter

into a joint ventureagreement
with localbidders.

14.

No otherprocurement
rulesor regulations
of thc Recipient3agcnciesor of any
statc-owncdcntity shall apply without the prior review and consentof the
Association.

ScctionII.

Selectionof ConsultantServiccs

Withoutlimitationupontheprovisionsof Schedule
2 to this Agreementor thc Consultant
Guidelines,the following additionalprovisionsshall apply to all consultants'services
procuredlbr theProjcct(pursuant
to SectionIII.A.2of Schedule
2 to thisAgrcemcnt):
l-

As a conditionfor participating
in the selection
process,
foreignconsultants
shall
not be requiredto cnte into a joint ventureagreement
with local consultants,
unlessthe conditionsstatedin paragraph
I.I.2 of the ConsultantGuidelinesae
met.
As a conditionfor participating
process,
in the selection
foreignconsultants
shall
not be requiredto legalizetheir proposals
or any documcntation
relatedto such
proposals
with theRccipient'sauthorities.

3.

Forcign consultantsshall not be requircd to be registeredin the Recipient's

National RegistryofConsultants(Iegistro Nacionalde Consultora).

l8
SCHEDULE3
Rcpaymcnt
Schedulc

D a t c P a v m c n tD u c
On eachFebruaryl5 andAugust15:
CommcncingFcbruary15,2018
to andincludingAugust15,2027.
Commencing
February15,2028,to andincluding
August15,2042.

PrincipalAmount of thc Credit

rcpayablc
(cxprcsscdas a pcrcentagc)*

| .251'/0

2.50%

* The percentages
reprcsentthe pcrcentage
of the principalamountof thc Creditto be
rcpaid,exceptas the Association
may otherwisespecifypursuantto Scction3.03 (b) of
theGcncralConditions.

t9
APPENDIX
ScctionI.

D cfinitions

"Anti-Corruption

Guidelines" means the "Guidelines on preventing and

CombatingFaud and Corruptionin ProjectsFinancedby IBRD Loans and IDA
CreditsandGrants",datedOcrobcr15,2006.

2.

"Category"means
a categorysctforth in the tablein SectionIV of Schedule
2 to
thisAgrecmcnt.

3.

"Consultant
Guidelines"meansthc "Guidelines:Selectionand Employmentof
Consultantsby World Bank Borowcrs" publishedby the Bank in May 2004 and
reviscdin October2006.

4.

"EPSA"

means a Entidqd Prestadora de Servicos de Agua Potable y

Alcantarillado Sanitario,a public or private companywith legal capacitywhich
provideswater and wastewater
servicesin the Recipient'stenitory,and which
ws crcatcdprsuantto thc Rccipicnt'slaw No. 2066,datedApril 11, 2000,as
amendcdandas in effecton tbedateofthis Agrcement.

5.

"FPS" means
Fondo Nacional de InversinProductivay Social, thc Recipient's
nationalproductiveandsocialinvestment
pursuantto Article l4
fund established
of theRecipient'sSupreme
DecreeNo.25984ofNovember16,2000;

6.

"General

Conditions" means the "lntemational DeveloDmentAssociation

GcneralConditionsfor Creditsrnd Granrs",datedJuly l, 2005 (as amended
throughOctober15,2006).

'7.

"lmplementation
Agreements"
meansthe agreements
refenedto in SectionI.A.3
of Schedule2 to this Agreement,to be entcred betwcen FpS and the
Implementing
Entities.

8.

"lmplementing

Entities" reans any of the Recipient's municipalities,

Prefecturas,otherpublic entiticsand non-govemmcntorganizations,which meet
the eligibilitycrjteriaset forth in the Operational
Manualto carry out activities
undcrthc Projcct.

9.

"Indicators"
mcansthe impact and implementation
indicatorsset lorth in the
Operational
Manual.

I0.

"lntcr-lnslilutionl
Comrnittcc"is thc conrmittccrcfcrrcdlo in ScctionI.8.4 of
Schcdulc2 to this Agrccmcnt,compriscdof: (i) relevantpublic scctoragencies;
and (ii) communityand private sectorepresentatives,
chaircd by the Vice

20
Ministerof Tourism,in coordination
with otheMinistriessuchas thc Ministry
of Wate.
"MPM"

ll.

mcansthe Recipient'sMinistry of Productionand Mico enterprise,

createdpursuantto the Recipient's
Law No. 3351,datedFebruary8, 2006.

lt.

"Municipality"
meansen entitywith legalpersonality
established
pursr.lant
to the
Recipicnt'sLarvNo. 2028,datedOctobcr28, 1999.

13.

"Operational
Manual"meansthemanualrefenedto in SectionI.C of Schedule
2
to this Agreement.
"PCU"

means the unit rcfened to in SectionI.B.2 of Schcdule2 to this

Agreement.
15.

"Prefectura"

16.

"Procurcment
Guidelines"meansthe "Cuidelincs:Procurementunder IBRD
Loans and IDA Credits"publishedby the Bank in May 2004 and revisedin
ocrober,2006.

17.

"Procurement
PIan" means thc Recipient's procurementplan for the project,
datedNovember8,2007 and rcferredto in paragraphl.l6 of thc procurement
Cuidelinesandparagraph
I .24 of the Consultant
Guidelines,
as the sameshallbe
updatedfrom time to time in accodance
with the provisionsof saidparagraphs.

18.

"Procurement
SupremeDecree"meansthe Recipient'sSupremeDecreeNo.
29190 (DecretoSupremoN" 29190)of July 11,2007, as amendedand as in
effecton thedateof thisAcrccment.

19.

"Poject
Preparation
Advancc"meansthe advancerefcnedto in Section2.07of
the GeneralConditions,grantedby the Association
to the Recipientpursuantto
the letteragreement
signedon behalfof the Association
on December20, 2006
andon behaffof the Rccipienton January22,2007.

20.

"Resettlcment
Framework" meansMarco de Reasentamento,
datcd October4,
2007,publishedin the VMT's wcbpage(http//lago.titikaka.googlcpages.com)
on
October4. 2007.

21.

"Statc

meansthe departmcntalrepresentations
of the Recipient'sexecutive
branch,as establishcd
in thc Rccipicnt'sLaw No. 1654,datedJuly 28, 1995and
publishcdin thc Recipient's
OfficialGazette
on the samedate.

of thc Llkc Rcport" mcansReportcdel Estadodel Lago, rn annualrcpof

publishedby VMT that includcsannual social, cnvironmentaland tourism
indicatorsfor theRecipicnt'sregionof LakeTiticaca.

2l
"Subsidiary
Agreement"mcansthe agreement
rcfened to in SectionI.A.l of
Schedule
2 to thisAgreement,
pursuant
to whichthe Rccipientshallmakepartof
theprocceds
of thc Financingavailableto FPS.
"\4VfT" means
the Recipient'sVice Ministry of Tourism,a unit within MpM,
crcatedpursuantto theRecipient's
Law No. 1351.daredFebruary8,2006.