Loan Number 3806 RU
LOAN AGREEMENT
(ENVIRONMENTAL MANAGEMENT PROJECT)
BETWEEN RUSSIAN FEDERATION AND INTERNATIONAL
BANK FOR RECONSTRUCTION
AND DEVELOPMENT
(Washington, 6.II.1995)
Agreement, dated February 6, 1995, between Russian Federation
(the Borrower) and International Bank for Reconstruction and
Development (the Bank).
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 Bank to assist in the financing
of the Project;
(B) The Borrower intends to continue its discussions with the
Swiss Ministry of Foreign Economic Relations regarding a grant to
the Borrower in the amount of 10 million Swiss Francs to assist
the Borrower in the fulfillment of the objectives of the
Borrower's Environmental Framework Program; and
(C) The Borrower intends to establish the National Pollution
Abatement Facility (the NPAF, as defined in this Agreement),
through a resolution of the Borrower, in accordance with this
Agreement, and appoint the NPAF to carry out Part B of the Project
with the Borrower's assistance, as provided in this Agreement;
Whereas the Bank has agreed, on the basis, inter alia, of the
foregoing, to extend the Loan to the Borrower upon the terms and
conditions set forth in this Agreement;
Now therefore the parties hereto hereby agree as follows:
Article I
General Conditions; Definitions
Section 1.01. The "General Conditions Applicable to Loan and
Guarantee Agreements" of the Bank, dated January 1, 1985 with the
modifications set forth below (the General Conditions) constitute
an integral part of this Agreement:
(a) The last sentence of Section 3.02 is deleted.
(b) In Section 6.02, sub-paragraph (k) is re-lettered as
sub-paragraph (1) and a new sub-paragraph (k) is added to read:
"(k) An extraordinary situation shall have arisen under which
any further withdrawals under the Loan would be inconsistent with
the provisions of Article III, Section 3 of the Bank's Articles of
Agreement."
Section 1.02. Unless the context otherwise requires, the
several terms defined in the General Conditions and in the
Preamble to this Agreement have the respective meanings therein
set forth and the following additional terms have the following
meanings:
(a) "Advance Agreement" means any agreement between the
Borrower and a proposed Sub-borrower, entered into pursuant to
Section 3.3 (d) of this Agreement, as the same may be amended from
time to time, concerning an Investment Project Preparation
Advance;
(b) "CPPI" means the Borrower's Center for Project Preparation
and Implementation, a non-commercial organization founded by the
MEPNR pursuant to MEPNR Order No. 247, dated December 2, 1993, and
duly registered on December 30, 1993, by the Division on
Registration of Noncommercial Organizations, Department of Social
and Political Relations, Municipal Government of Moscow;
(c) "CPPI Statutes" means the statutes, decision, charter, or
other founding instruments of the CPPI, including any legal and
regulatory enactments upon which such instruments are based, in
existence as of the day and year of this Agreement;
(d) "CPPI Supervisory Board" means the supervisory board of
the CPPI consisting of representatives of the Borrower's
ministries and agencies, and chairpersons of the supervisory
committees of Project subcomponents, and responsible for overall
coordination and monitoring of the Project;
(e) "Investment Project" means a high priority resource
recovery / pollution abatement project selected in accordance with
the procedures and eligibility criteria set forth in Sections A
and B of Schedule 7 to this Agreement and proposed to be carried
out by a Sub-borrower utilizing the proceeds of the NPAF Sub-loan;
(f) "Investment Project Preparation Advance" means a foreign
currency advance made or proposed to be made by the Borrower, out
of the proceeds of the Loan, pursuant to Section 3.03 (c) and (d)
of this Agreement, to a proposed Sub-borrower for the preparation
of technical, environmental, financial, and legal information
concerning a proposed Investment Project;
(g) "MEPNR" means the Borrower's Ministry of Environmental
Protection and Natural Resources;
(h) "MOF" means the Borrower's Ministry of Finance;
(i) "NPAF" means the National Pollution Abatement Facility to
be established by the Borrower pursuant to Section 3.03 (a) of
this Agreement;
(j) "NPAF Account" means a separate bank account established
and maintained by the Borrower on terms and conditions set forth
in Section 4.02 of this Agreement;
(k) "NPAF Sub-loan" means a foreign currency sub-loan made or
proposed to be made by the Borrower, pursuant to a Subsidiary Loan
Agreement, out of the proceeds of the Loan to a Sub-borrower for
an Investment Project;
(l) "NPAF Supervisory Board" means the supervisory board
responsible for consideration and approval of Investment Projects,
established pursuant to the Resolution and consisting of
representatives of the relevant ministries and agencies of the
Borrower;
(m) "Operating Instructions" means instructions containing the
operating procedures and policies of the NPAF, adopted pursuant to
Section 3.03 (h) of this Agreement;
(n) "Project Preparation Advance" means the project
preparation advance granted by the Bank to the Borrower pursuant
to an exchange of letters, dated January 14, 1993, and March 31,
1993, between the Bank and the Borrower;
(o) "Resolution" means the resolution or resolutions, and all
attachments thereto, adopted by the Borrower pursuant to Section
3.03 (a) of this Agreement, as the same may be amended from time
to time in agreement with the Bank;
(p) "Special Account" means the account referred to in Section
2.02 (b) of this Agreement;
(q) "Sub-borrower" means an enterprise or entity selected in
accordance with the procedures set forth in Sections A and B of
Schedule 7 to this Agreement to carry out an Investment Project;
and
(r) "Subsidiary Loan Agreement" means any agreement between
the Borrower and a Sub-borrower, entered into pursuant to Section
3.03 (f) of this Agreement, as the same may be amended from time
to time, concerning the financing of an Investment Project by the
Borrower, and such term includes all schedules to such Subsidiary
Loan Agreement.
Article II
The Loan
Section 2.01. The Bank agrees to lend to the Borrower, on the
terms and conditions set forth or referred to in the Loan
Agreement, various currencies that shall have an aggregate value
equivalent to the amount of one hundred ten million dollars
(110,000,000 USD), being the sum of withdrawals of the proceeds of
the Loan, with each withdrawal valued by the Bank as of the date
of such withdrawal.
Section 2.02. (a) The amount of the Loan may be withdrawn from
the Loan Account in accordance with the provisions of Schedule 1
to this Agreement for:
(i) amounts paid (or if the Bank shall so agree, to be
paid) by the Borrower on account of withdrawals made by a Sub
borrower under a NPAF Sub-loan to meet the reasonable cost of
goods and services required for the Investment Project in
respect of which the withdrawal from the Loan Account is
requested; and
(ii) expenditures made (or, if the Bank shall so agree, to
be made) in respect of the reasonable cost of goods and
services required under Parts A, B(1) and C of the Project and
to be financed out of the proceeds of the Loan.
(b) The Borrower shall, for the purposes of the Project, open
and maintain in Dollars a special account in a commercial bank, on
terms and conditions satisfactory to the Bank, including
appropriate protection against set-off, seizure or attachment.
Deposits into, and payments out of, the Special Account shall be
made in accordance with the provisions of Schedule 6 to this
Agreement.
(c) Promptly after the Effective Date, the Bank shall, on
behalf of the Borrower, withdraw from the Loan Account and pay to
itself the amount required to repay the principal amount of the
Project Preparation Advance withdrawn and outstanding as of such
date and to pay all unpaid charges thereon. The unwithdrawn
balance of the authorized amount of the Project Preparation
Advance shall thereupon be cancelled.
Section 2.03. The Closing Date shall be June 30, 2001, or such
later date as the Bank shall establish. The Bank shall promptly
notify the Borrower of such later date.
Section 2.04. The Borrower shall pay to the Bank a commitment
charge at the rate of three-fourths of one percent (3/4 of 1%) per
annum on the principal amount of the Loan not withdrawn from time
to time.
Section 2.05. (a) The Borrower shall pay interest on the
principal amount of the Loan withdrawn and outstanding from time
to time, at a rate for each Interest Period equal to the Cost of
Qualified Borrowings determined in respect of the preceding
Semester, plus one-half of one percent (1/2 of 1%). On each of the
dates specified in Section 2.06 of this Agreement, the Borrower
shall pay interest accrued on the principal amount outstanding
during the preceding Interest Period, calculated at the rate
applicable during such Interest Period.
(b) As soon as practicable after the end of each Semester, the
Bank shall notify the Borrower of the Cost of Qualified Borrowings
determined in respect of such Semester.
(c) For the purposes of this Section:
(i) "Interest Period" means a six-month period ending on
the date immediately preceding each date specified in Section
2.06 of this Agreement, beginning with the Interest Period in
which this Agreement is signed.
(ii) "Cost of Qualified Borrowings" means the cost, as
reasonably determined by the Bank and expressed as a
percentage per annum, of the outstanding borrowings of the
Bank drawn down after June 30, 1982, excluding such borrowings
or portions thereof as the Bank has allocated to fund:
(A) the Bank's investments; and
(B) loans which may be made by the Bank after July 1,
1989 bearing interest rates determined otherwise than as
provided in paragraph (a) of this Section.
(iii) "Semester" means the first six months or the second
six months of a calendar year.
(d) On such date as the Bank may specify by no less than six
months' notice to the Borrower, paragraphs (a), (d) and (c) (iii)
of this Section shall be amended to read as follows:
"(a) The Borrower shall pay interest on the principal amount
of the Loan withdrawn and outstanding from time to time, at a rate
for each Quarter equal to the Cost of Qualified Borrowings
determined in respect of the preceding Quarter, plus one-half of
one percent (1/2 of 1%). On each of the dates specified in Section
2.06 of this Agreement, the Borrower shall pay interest accrued on
the principal amount outstanding during the preceding Interest
Period, calculated at the rates applicable during such Interest
Period."
"(b) As soon as practicable after the end of each Quarter, the
Bank shall notify the Borrower of the Cost of Qualified Borrowings
determined in respect of such Quarter."
"(c) (iii) 'Quarter' means a three-month period commencing on
January 1, April 1, July 1 or October 1 in a calendar year."
Section 2.06. Interest and other charges shall be payable
semiannually on March 1 and September 1 in each year.
Section 2.07. The Borrower shall repay the principal amount of
the Loan in accordance with the amortization schedule set forth in
Schedule 3 to this Agreement.
Article III
Execution of the Project
Section 3.01. The Borrower declares its commitment to the
objectives of the Project as set forth in Schedule 2 to this
Agreement, and, to this end shall carry out the Project with due
diligence and efficiency and in conformity with appropriate
administrative, financial, environmental and commercial practices
and shall provide, promptly as needed, the funds, facilities,
services and other resources required for the Project.
Section 3.02. Without limitation or restriction upon any of
its other obligations under the Loan Agreement, the Borrower
shall, except as the Borrower and the Bank shall otherwise agree,
carry out the Project in accordance with the Implementation
Program set forth in Schedule 5 to this Agreement.
Section 3.03. Without limitation or restriction upon any of
its other obligations under the Loan Agreement and except as the
Borrower and the Bank shall otherwise agree, the Borrower shall,
for the purpose of carrying out Part B of the Project:
(a) adopt a resolution (the Resolution) satisfactory to the
Bank, establishing the NPAF and authorizing the carrying out of
Part B of the Project in accordance with Schedules 5, 7 and 8 to
this Agreement, and including, without limitation, the terms and
conditions governing:
(i) the use by the NPAF of Loan proceeds and goods and
services financed by the Loan;
(ii) the rights and responsibilities of the MOF, MEPNR,
NPAF Supervisory Board, CPPI and other appropriate parties of
the Borrower with respect to the NPAF;
(iii) the NPAF Account;
(iv) procedures, eligibility criteria and terms and
conditions related to the Investment Projects; and
(v) maintenance and audit of records and accounts of the
NPAF, and disclosure of information related to the NPAF, in
accordance with Article IV of this Agreement;
(b) adopt all necessary internal legal and regulatory
decisions to enable NPAF Sub-loans and Investment Project
Preparation Advances to be made out of the proceeds of the Loan to
Sub-borrowers;
(c) ensure that, unless the Bank shall otherwise agree,
Investment Project Preparation Advances will be made in accordance
with the procedures and eligibility criteria set forth in Sections
A and B of Schedule 8 to this Agreement;
(d) ensure that each Investment Project Preparation Advance is
made pursuant to an advance agreement (the Advance Agreement)
entered into between the Borrower and the proposed Sub-borrower,
under terms and conditions which shall have been approved by the
Bank and which shall include, without limitation, the terms and
conditions set forth in Section C of Schedule 8 to this Agreement;
(e) ensure that, unless the Bank shall otherwise agree,
Investment Projects are selected and approved in accordance with
the procedures and eligibility criteria set forth in Sections A
and B of Schedule 7 to this Agreement;
(f) ensure that each NPAF Sub-loan is made pursuant to a
subsidiary loan agreement (the Subsidiary Loan Agreement) entered
into between the Borrower and the Sub-borrower, under terms and
conditions which shall have been approved by the Bank, which shall
include, without limitation, the terms and conditions set forth in
Section C of Schedule 7 to this Agreement;
(g) cause each Sub-borrower to perform in accordance with the
provisions of the respective Subsidiary Loan Agreement; and
(h) ensure that the NPAF operates pursuant to operating
instructions (the Operating Instructions), satisfactory to the
Bank, which shall contain a model Subsidiary Loan Agreement with
terms and conditions set forth in Part C of Schedule 7 to this
Agreement and a model Advance Agreement with terms and conditions
set forth in Part C of Schedule 8 to this Agreement, and the
operating procedures of the NPAF, including such matters as:
(i) project eligibility criteria;
(ii) project approval and appraisal criteria, including
the Bank's right of prior review approval;
(iii) staff and consultant responsibilities;
(iv) procurement procedures;
(v) auditing and reporting requirements;
(vi) general terms and conditions of NPAF Sub-loans; and
(vii) environmental guidelines.
Section 3.04. In order to facilitate the efficient carrying
out of the Project, the Borrower shall ensure the operation of the
CPPI with functions, staffing, including consultants, and other
resources satisfactory to the Bank.
Section 3.05. Except as the Bank shall otherwise agree,
procurement of the goods and consultants' services to be financed
out of the proceeds of the Loan and required for:
(i) Parts A, B(1) and C of the Project shall be governed by
the provisions of Schedule 4 to this Agreement; and
(ii) Part B(2) of the Project shall be governed by the
provisions of Schedule 9 to this Agreement.
Article IV
Financial and Other Covenants
Section 4.01. (a) The Borrower shall maintain or cause to be
maintained records and accounts adequate to reflect in accordance
with sound accounting practices the operations, resources and
expenditures of the departments or agencies of the Borrower
responsible for carrying out the Project or any part thereof.
(b) The Borrower shall and shall cause relevant ministries and
agencies of the Borrower responsible for carrying out the Project
or any part thereof to:
(i) have the records and accounts referred to in paragraph
(a) of this Section, including those for the Special Account,
for each fiscal year audited in accordance with appropriate
auditing principles consistently applied by independent
auditors satisfactory to the Bank;
(ii) furnish to the Bank as soon as available, but in any
case not later than four months after the end of each such
year, the report of such audit by said auditors, of such scope
and in such detail as the Bank shall have reasonably
requested; and
(iii) furnish to the Bank such other information
concerning said records and accounts and the audit thereof as
the Bank shall from time to time reasonably request.
(c) For all expenditures with respect to which withdrawals
from the Loan Account were made on the basis of statements of
expenditure, the Borrower shall:
(i) maintain or cause to be maintained, in accordance with
paragraph (a) of this Section, records and accounts reflecting
such expenditures;
(ii) retain, until at least one year after the Bank has
received the audit report for the fiscal year in which the
last withdrawal from the Loan Account 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 Bank's representatives to examine such
records; and
(iv) ensure that such records and accounts are included in
the annual audit referred to in paragraph (b) of this Section
and that the report of such audit contains a separate opinion
by said auditors as to whether the statements of expenditure
submitted during such fiscal year, together with the
procedures and internal controls involved in their
preparation, can be relied upon to support the related
withdrawals.
Section 4.02. (a) Except as the Bank shall otherwise agree,
the Borrower shall, in respect of any repayments of principal and
advances, payment of commitment fees, interest and other payments
to be made by the Sub-borrowers under their respective Subsidiary
Loan Agreements and Advance Agreements, if applicable:
(i) open, by the date on which the Borrower shall receive
the first such payment, and thereafter maintain, in a bank
satisfactory to the Bank, a NPAF account (the NPAF Account),
on terms and conditions, including auditing conditions,
satisfactory to the Bank; and
(ii) promptly upon receipt of such repayments and
payments, credit the same to the NPAF Account.
Each March 1 and September 1, the Borrower shall:
(i) withdraw from the NPAF Account an amount equivalent to
the amount of interest and commitment charge due from the
Borrower to the Bank under Article II of this Agreement with
respect to NPAF Sub-Loans and, if no such amounts are
available in the NPAF Account, the amounts due herein shall
accrue for the benefit of the Borrower and be withdrawn out of
the NPAF Account at such time as sufficient funds are
available in the NPAF Account;
(ii) utilize the amounts, if any, remaining in the NPAF
Account following withdrawals under Section 4.02 (b) (i) of
this Agreement, excluding the amounts equivalent to the
repayment of principal under the NPAF Sub-loans and Investment
Project Preparation Advances, for the operating expenses of
the NPAF expected to be incurred during the next six months;
(iii) utilize the amounts, if any, remaining in the NPAF
Account following withdrawals under Section 4.02 (b) (i) and
Section 4.02 (b) (ii) of this Agreement, excluding the amounts
equivalent to the repayment of principal under the NPAF
Subloans and Investment Project Preparation Advances, as
follows:
(A) thirty percent (30%) shall be used by the Borrower
for payments due from the Borrower to the Bank under this
Agreement; and
(B) seventy percent (70%) shall be available to the
NPAF for loans to Russian subborrowers for high priority
recovery / pollution abatement projects; and
(iv) utilize the amounts, if any, remaining in the NPAF
Account following withdrawals under Section 4.02 (b) (i),
Section 4.02 (b) (ii) and Section 4.02 (b) (ii) of this
Agreement for loans and advances to Russian sub-borrowers for
high priority recovery / pollution abatement projects.
(c) The Borrower shall select a bank satisfactory to the Bank
and enter into an arrangement, under terms and conditions
satisfactory to the Bank, with such a bank to administer the
Subloans and manage the NPAF Account.
Article V
Remedies of the Bank
Section 5.01. Pursuant to Section 6.02 (1) of the General
Conditions, the following additional event is specified, namely,
that the Resolution or CPPI Statutes shall have been amended,
suspended, abrogated, repealed or waived so as to affect
materially and adversely the ability of the NPAF to implement Part
B of the Project.
Section 5.02. Pursuant to Section 7.01 (h) of the General
Conditions, the following additional event is specified, namely,
that any event specified in Section 5.01 of this Agreement shall
occur and shall continue for a period of thirty days after notice
thereof shall have been given by the Bank to the Borrower.
Article VI
Effective Date; Termination
Section 6.01. The following events are specified as additional
conditions to the effectiveness of the Loan Agreement within the
meaning of Section 12.01 (c) of the General Conditions:
(a) the Resolution and all other actions necessary to
implement Part B of the Project, including any actions necessary
to authorize the CPPI to implement Part B of the Project, have
been duly adopted by the Borrower; and
(b) the core team of consultants necessary to perform the
executive, financial and operating duties related to the selection
and appraisal of Investment Projects has been selected and
consultants' contracts with such consultants have been properly
executed.
Section 6.02. The following is specified as an additional
matter, within the meaning of Section 12.02 (c) of the General
Conditions, to be included in the opinion or opinions to be
furnished to the Bank, namely, that the Resolution has been duly
adopted and is legally binding upon the Borrower in accordance
with its terms.
Section 6.03. The date ninety days after the date of this
Agreement is hereby specified for the purposes of Section 12.04 of
the General Conditions.
Article VII
Representatives of the Borrower; Addresses
Section 7.01. Except as provided in Section 2.08 of this
Agreement, the Minister of Finance or the First Deputy Minister of
Finance of the Borrower is designated as representative of the
Borrower for the purposes of Section 11.03 of the General
Conditions.
Section 7.02. The following addresses are specified for the
purposes of Section 11.01 of the General Conditions:
For the Borrower:
Ministry of Finance
Ul. Ilyinka, 9
Moscow, Russia
Telex:
112008
For the Bank:
International Bank for
Reconstruction and Development
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address: Telex:
INTBAFRAD 248423 (RCA)
Washington, D.C. 82987 (FTCC)
64145 (WUI) or
97688 (TRT)
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.
SCHEDULE 1
WITHDRAWAL OF THE PROCEEDS OF THE LOAN
1. The table below sets forth the Categories of items to be
financed out of the proceeds of the Loan, the allocation of the
amounts of the Loan to each Category and the percentage of
expenditures for items so to be financed in each Category:
--------------------------T------------------T-------------------¬
¦ Category ¦ Amount of the ¦ % of ¦
¦ ¦ Loan Allocated ¦ Expenditures ¦
¦ ¦ (Expressed in ¦ to be Financed ¦
¦ ¦Dollar Equivalent)¦ ¦
+-------------------------+------------------+-------------------+
¦(1) NPAF Sub-loans ¦ 50,000,000 ¦100% ¦
¦ under Part B(2) of ¦ ¦ ¦
¦ the Project ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(2) Investment Project ¦ 5,000,000 ¦100% ¦
¦ Preparation Advance ¦ ¦ ¦
¦ under Part B(2) of ¦ ¦ ¦
¦ the Project ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(3) Goods for Parts A, ¦ 6,700,000 ¦100% of foreign ¦
¦ B(1) and C of the ¦ ¦expenditures, ¦
¦ Project ¦ ¦100% of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦(ex-factory cost) ¦
¦ ¦ ¦and 75% of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦for other items ¦
¦ ¦ ¦procured locally ¦
¦ ¦ ¦ ¦
¦(4) Consultants' ¦ ¦ ¦
¦ services and ¦ ¦ ¦
¦ training: ¦ ¦ ¦
¦ ¦ ¦ ¦
¦ (a) for Parts A and ¦ 33,700,000 ¦100% ¦
¦ C of the Project ¦ ¦ ¦
¦ ¦ ¦ ¦
¦ (b) for Part B(1) ¦ 3,800,000 ¦100% ¦
¦ of the Project ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(5) Incremental Recurrent¦ 2,000,000 ¦100% of local ¦
¦ Costs ¦ ¦expenditures ¦
¦ ¦ ¦incurred up to ¦
¦ ¦ ¦November 30, 1997, ¦
¦ ¦ ¦and 50% of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦thereafter ¦
¦ ¦ ¦ ¦
¦(6) Refunding of ¦ 460,000 ¦Amounts due ¦
¦ Project ¦ ¦pursuant to ¦
¦ Preparation ¦ ¦Section 2.02 "c" ¦
¦ Advance ¦ ¦of this Agreement ¦
¦ ¦ ¦ ¦
¦(7) Unallocated ¦ 8,340,000 ¦ ¦
+-------------------------+------------------+-------------------+
¦ TOTAL ¦ 110,000,000 ¦ ¦
L-------------------------+------------------+--------------------
2. For the purposes of this Schedule:
(a) the term "foreign expenditures" means expenditures in the
currency of any country other than that of the Borrower for goods
or services supplied from the territory of any country other than
that of the Borrower;
(b) the term "local expenditures" means expenditures in the
currency of the Borrower or for goods or services supplied from
the territory of the Borrower; and
(c) the term "Incremental Recurrent Costs" means the
incremental recurrent costs incurred for Project implementation,
such as operating costs, vehicle and equipment maintenance and
communications expenses.
3. Notwithstanding the provisions of paragraph 1 above, no
withdrawals shall be made in respect of payments made for:
(a) expenditures prior to the date of this Agreement;
(b) any NPAF Sub-loan under Category (1) of this Schedule,
unless:
(i) the Operating Instructions have been adopted in a
manner satisfactory to the Bank;
(ii) the Borrower has entered into an arrangement with a
bank pursuant to Section 4.02 (c) of this Agreement; and
(iii) the Investment Project concerned has been approved
in accordance with the procedures, eligibility criteria and on
the terms and conditions set forth in Schedule 7 to this
Agreement; or
(c) any Investment Project Preparation Advance under Category
2 of this Schedule, unless:
(i) the Operating Instructions have been adopted in a
manner satisfactory to the Bank;
(ii) the Borrower has entered into an arrangement with a
bank pursuant to Section 4.02 (c) of this Agreement; and
(iii) the Investment Project Preparation Advance concerned
has been approved in accordance with the procedures,
eligibility criteria and on the terms and conditions set forth
in Schedule 8 to this Agreement.
4. The Bank may require withdrawals from the Loan Account to
be made on the basis of statements of expenditure for expenditures
under contracts for goods, and consultants' services and training,
and incremental recurrent costs not exceeding 50,000 USD
equivalent, under such terms and conditions as the Bank shall
specify by notice to the Borrower.
SCHEDULE 2
DESCRIPTION OF THE PROJECT
The objectives of the Project are to assist the Borrower to:
(i) strengthen and streamline federal and regional
institutional structures for environmental management;
(ii) improve federal and regional environmental policy
formulation and implementation;
(iii) upgrade federal and regional environmental management
systems; and
(iv) assist in the financing of economically viable high
priority resource recovery / pollution abatement projects in the
Russian Federation.
The Project is part of the Borrower's Environmental Framework
Program and consists of the following parts, subject to such
modifications thereof as the Borrower and the Bank may agree upon
from time to time to achieve such objectives:
Part A. TECHNICAL ASSISTANCE
1. Policy and Regulatory Support
Strengthening of the Borrower's capacity to develop, implement
and enforce environmental policies and regulations on federal and
regional levels (with focus on Urals and Upper Volga regions)
through the provision of consulting services, training and goods.
2. Environmental Epidemiology
Strengthening of federal and regional environmental
epidemiology management system, with emphasis on the collection
and analysis of environmental health data, identification of the
most urgent problems and development of appropriate federal and
regional policies, through the provision of consulting services,
training and goods.
3. Water Quality and Water Resource Management
Development and implementation of an integrated planning and
regulatory reform program on federal and regional levels (with
focus on the Upper Volga River basin, the Urals region and the
North Caucasus region), with emphasis on the improvement of
drinking water supplies, development of a prioritized investment
and action programs, and development of water management policy
issues, through the provision of consulting services, training and
goods.
4. Hazardous Waste Management
Development of a national industrial waste data management
system and development and demonstration of a regional regulatory
hazardous waste management system, through the provision of
consulting services, training and goods.
Part B. NPAF
Strengthening of financial delivery mechanisms required to
address priority environmental management investment through:
1) the establishment and operation of the NPAF; and
2) financing of Investment Projects and re-financing of
similar high priority recovery / pollution abatement projects.
Part C. CPPI
Maintenance of a Center for Project Preparation and
Implementation responsible for:
(i) implementation of the Project, following the Bank's
procurement, disbursement, accounting, auditing and reporting
requirements;
(ii) facilitation of training activities under the Project;
(iii) facilitation of overall Project coordination;
(iv) dissemination of information to third parties regarding
the environmental projects of the Borrower; and
(v) interaction with other multilateral funding institutions
and other funding agencies.
The Project is expected to be completed by December 31, 1999.
SCHEDULE 3
AMORTIZATION SCHEDULE
------------------------------------T----------------------------¬
¦ Date Payment Due ¦ Payment of Principal ¦
¦ ¦(expressed in dollars) <*> ¦
+-----------------------------------+----------------------------+
¦On each March 1 and September 1 ¦ ¦
¦ ¦ ¦
¦ beginning March 1, 2000 ¦ ¦
¦ through March 1, 2011 ¦ 4,585,000 ¦
¦ ¦ ¦
¦And on September 1, 2011 ¦ 4,545,000 ¦
L-----------------------------------+-----------------------------
--------------------------------
<*> The figures in this column represent dollar equivalents
determined as of the respective dates of withdrawal. See General
Conditions, Sections 3.04 and 4.03.
PREMIUMS ON PREPAYMENT
Pursuant to Section 3.04 (b) of the General Conditions, the
premium payable on the principal amount of any maturity of the
Loan to be prepaid shall be the percentage specified for the
applicable time of prepayment below:
--------------------------------T--------------------------------¬
¦ Time of Prepayment ¦ Premium ¦
+-------------------------------+--------------------------------+
¦ ¦The interest rate (expressed as ¦
¦ ¦a percentage per annum) ¦
¦ ¦applicable to the Loan on the ¦
¦ ¦day of prepayment multiplied by:¦
¦ ¦ ¦
¦Not more than three years ¦ 0.18 ¦
¦ before maturity ¦ ¦
¦ ¦ ¦
¦More than three years but ¦ 0.35 ¦
¦ not more than six years ¦ ¦
¦ before maturity ¦ ¦
¦ ¦ ¦
¦More than six years but ¦ 0.65 ¦
¦ not more than 11 years ¦ ¦
¦ before maturity ¦ ¦
¦ ¦ ¦
¦More than 11 years but not ¦ 0.88 ¦
¦ more than 15 years ¦ ¦
¦ before maturity ¦ ¦
¦ ¦ ¦
¦More than 15 years before ¦ 1.00 ¦
¦ maturity ¦ ¦
L-------------------------------+---------------------------------
SCHEDULE 4
PROCUREMENT AND CONSULTANTS' SERVICES
Section I. PROCUREMENT OF GOODS
Part A
International Competitive Bidding
1. Except as provided in Parts B and C hereof, goods shall be
procured under contracts awarded in accordance with procedures
consistent with those set forth in Sections I and II of the
"Guidelines for Procurement under IBRD Loans and IDA Credits"
published by the Bank in May 1992 (the Guidelines).
2. For fixed-price contracts, the invitation to bid referred
to in paragraph 2.13 of the Guidelines shall provide that, when
contract award is delayed beyond the original bid validity period,
the successful bidder's bid price will be increased for each week
of delay by two predisclosed correction factors satisfactory to
the Bank, one to be applied to all foreign currency components and
the other to the local currency component of the bid price. Such
an increase shall not be taken into account in the bid evaluation.
3. In the procurement of goods in accordance with this Part A,
the Borrower shall use the relevant standard bidding documents
issued by the Bank, with such modifications thereto as the Bank
shall have agreed to be necessary for the purposes of the Project.
Where no relevant standard bidding documents have been issued by
the Bank, the Borrower shall use bidding documents based on other
internationally recognized standard forms agreed with the Bank.
Part B
Preference for Domestic Manufacturers
In the procurement of goods in accordance with the procedures
described in Part A.1 hereof, goods manufactured in the Russian
Federation may be granted a margin of preference in accordance
with, and subject to, the provisions of paragraphs 2.55 and 2.56
of the Guidelines and paragraphs 1 through 4 of Appendix 2
thereto.
Part C
Other Procurement Procedures
1. Items or groups of items for goods estimated to cost the
equivalent of 300,000 USD or less per contract, up to an aggregate
amount equivalent to 2,330,000 USD, may be procured under
contracts awarded on the basis of comparison of price quotations
obtained from at least three suppliers from at least three
different countries eligible under the Guidelines, in accordance
with procedures satisfactory to the Bank.
2. Items or groups of items for goods estimated to cost the
equivalent of 10,000 USD or less per contract, up to an aggregate
amount equivalent to 500,000 USD, may be procured under contracts
awarded on the basis of comparison of price quotations obtained
from at least three suppliers from the Russian Federation eligible
under the Guidelines, in accordance with procedures satisfactory
to the Bank.
Part D
Review by the Bank of Procurement Decisions
1. Review of invitations to bid and of proposed awards and
final contracts:
(a) With respect to each contract for goods estimated to cost
the equivalent of 100,000 USD or more, the procedures set forth in
paragraphs 2 and 4 of Appendix I 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
Bank pursuant to said paragraph 2 (d) shall be furnished to the
Bank 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 I to the Guidelines shall apply. Where payments for
such contract are to be made out of the Special Account, said
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 Bank pursuant to said paragraph 3
shall be furnished to the Bank as part of the evidence to be
furnished pursuant to paragraph 4 of Schedule 6 to this Agreement.
(c) The provisions of the preceding subparagraph (b) shall not
apply to contracts on account of which withdrawals from the Loan
Account are to be made on the basis of statements of expenditure.
2. The figure of 15% is hereby specified for purposes of
paragraph 4 of Appendix I to the Guidelines.
Section II. EMPLOYMENT OF CONSULTANTS
1. In order to assist the Borrower in the carrying out of the
Project, the Borrower shall employ consultants whose
qualifications, experience and terms and conditions of employment
shall be satisfactory to the Bank. Such consultants shall be
selected in accordance with principles and procedures satisfactory
to the Bank on the basis of the "Guidelines for the Use of
Consultants by World Bank Borrowers and by the World Bank as
Executing Agency" published by the Bank in August 1981 (the
Consultant Guidelines). For complex, time-based assignments, the
Borrower shall employ such consultants under contracts using the
standard form of contract for consultants' services issued by the
Bank, with such modifications as shall have been agreed by the
Bank. Where no relevant standard contract documents have been
issued by the Bank, the Borrower shall use other standard forms
agreed with the Bank.
2. Notwithstanding the provisions of paragraph 1 of this
Section, the provisions of the Consultant Guidelines requiring
prior Bank review or approval of budgets, short lists, selection
procedures, letters of invitation, proposals, evaluation reports
and contracts shall not apply to contracts estimated to cost less
than 100,000 USD equivalent each. However, this exception to prior
Bank review shall not apply to the terms of reference for such
contracts or to the employment of individuals, to single source
selection of firms, to assignments of a critical nature as
reasonably determined by the Bank or to amendments of contracts
raising the contract value to 100,000 USD equivalent or above.
SCHEDULE 5
IMPLEMENTATION PROGRAM
A. Overall Coordination and Management of the Project
1. The MEPNR shall be responsible for implementation of the
Project. The overall coordination and monitoring of the Project
shall be the responsibility of the CPPI Supervisory Board.
2. The CPPI shall be responsible for, inter alia, the
following day-to-day activities related to Project implementation:
procurement, accounting, disbursement, auditing, reporting,
monitoring and evaluation of activities under all federal and
regional components of the Project, and preparation, appraisal and
supervision of Investment Projects. The CPPI shall be assisted by
consultants providing procurement, financial management and
information systems, and general project advice and services,
project performance and progress evaluation, and sub-project
investment services. The CPPI shall liaise with international
donors, Borrower's ministries and agencies, other parties and
subcomponent implementing teams regarding Project activities. The
CPPI shall engage consultants (individuals and firms) for the
purpose of staffing the CPPI, NPAF and subcomponent iaplementation
teams.
B. Part A of the Project: Technical Assistance
1. Policy and Regulatory Support
Policy and regulatory support subcomponent of the Project
shall be implemented by the relevant federal and regional
environmental policy teams, supervised by Governmental Commission
on Environment and Use of Natural Resources and the interregional
environmental councils of the Upper Volga and Urals regions, in
cooperation with the MEPNR, relevant regional authorities and
CPPI.
2. Environmental Epidemiology
Environmental epidemiology subcomponent of the Project shall
be implemented by federal and two regional centers, supervised by
federal and regional subcomponent interagency committees, in
cooperation with the MEPNR, Ministry of Public Health, State
Committee for Sanitary and Epidemiological Surveillance, relevant
regional authorities and CPPI.
3. Water Quality and Water Resource Management
Water quality and water resource management subcomponent of
the Project shall be implemented by federal and three regional
teams, supervised by the relevant federal and regional management
committees in the regions of the Upper Volga, the Urals and North
Caucases, in cooperation with the relevant regional
administrations, the MEPNR, Committee for Water Resources
Management and CPPI.
4. Hazardous Waste Management
Hazardous waste management subcomponent of the Project shall
be implemented by federal and regional teams, supervised by
subcomponent management committees, in cooperation with the MEPNR,
the Institute of Economic Problems of Nature Management,
administrations and environmental protection committees of
Yaroslavl and Vologda Oblast, the CPPI and relevant ministries and
agencies.
C. Part B of the Project: National
Pollution Abatement Facility
1. The CPPI, assisted by consultants, shall provide
professional services related to the selection, design, appraisal
and supervision of the Investment Projects, on the basis of
procedures and eligibility criteria set forth in Sections A and B
of Schedule 7 to this Agreement and the Operating Instructions.
2. The NPAF Supervisory Board shall review and approve
Investment Projects proposed by the CPPI.
3. The MOF, as the sub-loan lender of record, shall take
decisions related to the Investment Projects considered and
approved by the NPAF Supervisory Board, and shall enter into
appropriate Subsidiary Loan Agreements.
SCHEDULE 6
SPECIAL ACCOUNT
1. For the purposes of this Schedule:
(a) the term "eligible Categories" means Categories (1)
through (5) 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 Loan
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 USD to be withdrawn from the Loan 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 Bank 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 Bank 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 Bank shall, on behalf of the Borrower, withdraw from the Loan
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 Bank requests for deposits into the
Special Account at such intervals as the Bank shall specify.
(ii) Prior to or at the time of each such request, the
Borrower shall furnish to the Bank 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 Bank shall,
on behalf of the Borrower, withdraw from the Loan 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 Bank from the Loan
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 Bank shall
reasonably request, furnish to the Bank 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 Bank shall not be required to make further deposits
into the Special Account:
(a) if, at any time, the Bank shall have determined that all
further withdrawals should be made by the Borrower directly from
the Loan 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 Loan allocated to
the eligible Categories, less the amount of any outstanding
special commitment entered into by the Bank 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 Loan Account of the remaining
unwithdrawn amount of the Loan allocated to the eligible
Categories shall follow such procedures as the Bank shall specify
by notice to the Borrower. Such further withdrawals shall be made
only after and to the extent that the Bank 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 Bank 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
Bank, the Borrower shall, promptly upon notice from the Bank:
(A) provide such additional evidence as the Bank may
request; or
(B) deposit into the Special Account (or, if the Bank
shall so request, refund to the Bank) an amount equal to
the amount of such payment or the portion thereof not so
eligible or justified. Unless the Bank shall otherwise
agree, no further deposit by the Bank into the Special
Account shall be made until the Borrower has provided such
evidence or made such deposit or refund, as the ease may
be.
(b) If the Bank 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 Bank, refund to the Bank such
outstanding amount.
(c) The Borrower may, upon notice to the Bank, refund to the
Bank all or any portion of the funds on deposit in the Special
Account.
(d) Refunds to the Bank made pursuant to paragraphs 6 (a), (b)
and (c) of this Schedule shall be credited to the Loan Account for
subsequent withdrawal or for cancellation in accordance with the
relevant provisions of this Agreement, including the General
Conditions.
SCHEDULE 7
ON-LENDING PROCEDURES, ELIGIBILITY CRITERIA
AND TERMS AND CONDITIONS OF INVESTMENT PROJECTS
A. Procedures
1. No expenditures for goods and services required for an
Investment Project shall be eligible for financing out of the
proceeds of the Loan unless:
(i) the Bank has reviewed and issued a no-objection with
respect to the Investment Project before the Investment Project is
approved by the NPAF Supervisory Board; and
(ii) expenditures under the NPAF Sub-loan for such an
Investment Project shall have been made not earlier than ninety
days prior to the date on which the Bank shall have received the
application and information required under paragraph 2 of Part A
of this Schedule in respect of such NPAF Sub-loan.
2. In addition to the general procedures described in
paragraph 1 of Part A of this Schedule, the following procedures
shall be followed in connection with any proposed Investment
Project:
(a) a Sub-borrower seeking a NPAF Sub-loan shall prepare and
submit to the CPPI an application and summary of the proposed
Investment Project;
(b) an initial review of the proposed Investment Project shall
be undertaken by the NPAF consultants, who shall then prepare an
initial review summary;
(c) the Bank shall review and comment upon the initial review
summary for each proposed Investment Project;
(d) following the Bank review and comment, the director of the
CPPI shall determine, taking into account the recommendations of
the NPAF consultants, whether or not to further prepare and
appraise the proposed Investment Project;
(e) if a decision is made to proceed with the preparation and
appraisal of the proposed Investment Project, the NPAF consultants
shall prepare a feasibility study for the proposed Investment
Project in accordance with the Operating Instructions and in the
form satisfactory to the Bank. The feasibility study shall
include:
(i) a description of the Sub-borrower, including its legal
status and ownership; and
(ii) a summary and detailed description of the Investment
Project, including financing plan, cost and benefit analysis,
environmental impact assessment and other pertinent
environmental information, financial projections, cash flow
forecast, foreign currency justification, proposed procurement
arrangements, and status of authorizations and licenses;
(f) prior to submitting the proposed Investment Project to the
NPAF Supervisory Board, the proposed Investment Protect shall be
submitted to the Bank for review and a no-objection. When
presenting the proposed Investment Project to the Bank, the
Borrower shall furnish to the Bank an application, in form
satisfactory to the Bank, together with:
(i) a description of the Sub-borrower to which the NPAF
Sub-loan is proposed to be made and the approved feasibility
study for such Investment Project, including a description of
the expenditures proposed to be financed out of the proceeds
of the Loan;
(ii) the draft Subsidiary Loan Agreement containing the
proposed terms and conditions of the NPAF Sub-loan and the
schedule of amortization of the NPAF Subloan; and
(iii) such other information as the Bank shall reasonably
request;
(g) following the Bank's review and no-objection, and the NPAF
Supervisory Board appraisal and approval, of the proposed
Investment Project, the Borrower, based on the determination of
the NPAF Supervisory Board, shall make the final decision whether
to approve the proposed Investment Project; and
(h) following the approval of the Investment Project by the
Borrower, the Borrower, Sub-borrower and any other relevant party
shall execute a Subsidiary Loan Agreement giving the Borrower
legal rights adequate to protect the interests of the Bank and the
Borrower and containing, inter alia, the terms and conditions set
forth in Part C of this Schedule 7.
B. Eligibility Criteria
NPAF Sub-loans shall be made only to enterprises selected and
evaluated in accordance with criteria satisfactory to the Bank.
The evaluation criteria shall include the following;
(a) technical-economic criteria demonstrating the feasibility
and cost efficiency of the proposed Investment Project;
(b) environmental criteria incorporating environmental
assessment and audit considerations and demonstrating significant
reduction of harmful environmental impacts from existing
operations; and
(c) financial criteria demonstrating that the proposed
Investment Project is a commercially viable project.
C. Terms and Conditions
1. Each Subsidiary Loan Agreement shall require the
Sub-borrower to, inter alia:
(a) carry out and operate the Investment Project with due
diligence and efficiency under the supervision of qualified and
experienced management assisted by competent staff in adequate
numbers, and in accordance with sound technical, financial,
environmental, commercial and managerial standards;
(b) maintain records and accounts adequate to reflect in
accordance with sound accounting practices its operations and
financial conditions, including separate records and accounts
adequate to reflect all resources and expenditures related to the
Investment Project;
(c) have its records, accounts and financial statements for
each fiscal year audited, in accordance with appropriate auditing
principles consistently applied, by independent auditors
satisfactory to the Borrower, and furnish to the Borrower not
later than six months after the end of each such year certified
copies of its financial statements for such year so audited and
the report of such audit by the auditors of such scope and such
detail as the NPAF shall have reasonably requested (which report
shall include an analysis of the Sub-borrower's performance, as
measured by the performance indicators satisfactory to the NPAF
and the Bank, which shall include, inter alia, commercial,
technical, operational, environmental, administrative and
financial indicators);
(d) procure the goods and services to be financed by the NPAF
Sub-loans in accordance with the provisions of Schedule 9 to this
Agreement and to use such goods and services exclusively in the
carrying out of the Investment Project;
(e) allow the Borrower, by itself or jointly with
representatives of the Bank, if the Bank shall so request, to
inspect such goods and the sites, works, plants and construction
included in the Investment Project, the operation thereof, and any
relevant records and documents;
(f) take out and maintain with responsible insurers such
insurance, against such risks and in such amounts, as shall be
consistent with sound business practice, including insurance
covering hazards incident to the acquisition, transportation and
delivery of goods financed out of the proceeds of the NPAF
Sub-loan to the place of use or installation, any indemnity
thereunder to be made payable in a currency freely usable by the
Sub-borrower to replace or repair such goods;
(g) assume the foreign exchange risk between the Dollar and
the ruble;
(h) contribute from amounts generated internally funds for the
Investment Project equal to not less than twenty percent of the
total cost of the Investment Project and pay an up-front project
appraisal fee equal to one percent of the proposed NPAF Sub-loan
amount;
(i) prepare and promptly furnish to the Borrower, for
forwarding to the Bank, if so requested by the Bank, all such
information as the Borrower or the Bank shall reasonably request
relating to the administration, operations and financial condition
of the Sub-borrower and to the benefits to be derived from the
Investment Project;
(j) give the Borrower the right to suspend or terminate the
right of the Subborrower to the use of the proceeds of the NPAF
Sub-loan upon failure by such Subborrower to perform its
obligations under the Subsidiary Loan Agreement; and
(k) at the conclusion of the Investment Project, submit to the
Borrower, in a manner and by date satisfactory to the Borrower and
the Bank, an Investment Project completion report.
2. Each NPAF Sub-loan shall:
(i) be denominated and be repayable (principle and interest)
in Dollars;
(ii) carry an interest rate satisfactory to the Bank;
(iii) require the payment of a loan supervision fee equal to
0.25 percent for the first five years and 0.125 percent for all
subsequent years;
(iv) be issued for a maximum maturity period of eight years,
or such longer period as may be satisfactory to the Bank, with up
to three years grace period for the repayment of the principal of
the NPAF Sub-loan;
(v) be equal to no less than 350,000 USD and no more than
7,000,000 USD, unless otherwise agreed upon by the Bank; and
(vi) contribute no more than seventy percent of the total cost
of the Investment Project, unless otherwise agreed upon by the
Bank.
SCHEDULE 8
ON-LENDING PROCEDURES, ELIGIBILITY CRITERIA AND TERMS
AND CONDITIONS OF INVESTMENT PROJECT PREPARATION ADVANCES
A. Procedures
1. The following procedures shall be followed in connection
with any proposed Investment Project Preparation Advance:
(a) a Sub-borrower seeking an Investment Project Preparation
Advance for a NPAF Sub-loan shall prepare and submit to the NPAF,
together with an application and summary of the proposed
Investment Project, an application for the Investment Project
Preparation Advance, in form and with information (including
technical, environmental, financial, and legal information)
satisfactory to the NPAF;
(b) if the NPAF determines that the proposal for the
Investment Project Preparation Advance meets the technical,
environmental, financial, and legal criteria, the proposal shall
be sent to the Bank, together with the initial review summary for
the proposed Investment Project;
(c) following the Bank's review and no-objection, and the NPAF
Supervisory Board or its appointee approval, the Borrower shall,
based on the determination of the NPAF Supervisory Board, make the
final decision whether or not to approve the Investment Project
Preparation Advance; and
(d) following the approval of the Investment Project
Preparation Advance by the Borrower, the Borrower, Sub-borrower
and any other relevant party shall execute an Advance Agreement
giving the Borrower legal rights adequate to protect the interests
of the Bank and the Borrower and containing, inter alia, the terms
and conditions set forth in Part C of this Schedule 8.
B. Eligibility Criteria
Investment Project Preparation Advances shall be made only to
enterprises selected and evaluated in accordance with criteria
satisfactory to the Bank. The evaluation criteria shall include
technical, environmental, financial and legal criteria.
C. Terms and Conditions
1. Each Advance Agreement shall require the Sub-borrower,
unless otherwise agreed upon by the Borrower and the Bank, to,
inter alia:
(a) carry out preparation work and feasibility studies related
to the proposed Investment Project with due diligence and
efficiency under the supervision of qualified and experienced
management assisted by competent staff in adequate numbers, and in
accordance with sound technical, financial, environmental,
commercial and managerial standards;
(b) maintain records and accounts adequate to reflect in
accordance with sound accounting practices its operations and
financial conditions, including separate records and accounts
adequate to reflect all resources and expenditures related to the
Investment Project Preparation Advance;
(c) procure the goods and services to be financed by the
Investment Project Preparation Advance in accordance with the
provisions of Schedule 9 to this Agreement and to use such goods
and services exclusively in the carrying out of preparation work
and feasibility studies related to the proposed the Investment
Project;
(d) allow the Borrower, by itself or jointly with
representatives of the Bank, if the Bank shall so request, to
inspect any relevant records and documents;
(e) assume the foreign exchange risk between the Dollar and
the ruble;
(f) prepare and promptly furnish to the Borrower, for
forwarding to the Bank, if so requested by the Bank, all such
information as the Borrower or the Bank shall reasonably request
relating to the administration, operations and financial condition
of the Sub-borrower and to the benefits to be derived from the
Investment Project Preparation Advance;
(g) give the Borrower the right to suspend or terminate the
right of the Subborrower to the use of the proceeds of the
Investment Project Preparation Advance upon failure by such
Subborrower to perform its obligations under the Advance
Agreement; and
(h) at the conclusion of preparation work and feasibility
studies related to the proposed Investment Project, submit to the
Borrower, in a manner and by date satisfactory to the Borrower and
the Bank, an Investment Project preparation report.
2. Each Investment Project Preparation Advance shall, unless
otherwise agreed upon by the Borrower and the Bank:
(i) be denominated and be repayable (principle and interest)
in Dollars;
(ii) carry an interest rate satisfactory to the Bank;
(iii) be equal to no more than 300,000 USD; and
(vi) contribute no more than eighty percent of the total cost
of preparation work and feasibility studies related to the
proposed the Investment Project.
SCHEDULE 9
PROCUREMENT AND CONSULTANTS' SERVICES
UNDER NPAF SUB-LOANS
Section I. PROCUREMENT OF GOODS
Part A
International Competitive Bidding
1. Except as provided in Parts B and C hereof, goods shall be
procured under contracts awarded in accordance with procedures
consistent with those set forth in Sections I and II of the
"Guidelines for Procurement under IBRD Loans and IDA Credits"
published by the Bank in May 1992 (the Guidelines).
2. For fixed-price contracts, the invitation to bid referred
to in paragraph 2.13 of the Guidelines shall provide that, when
contract award is delayed beyond the original bid validity period,
the successful bidder's bid price will be increased for each week
of delay by two predisclosed correction factors satisfactory to
the Bank, one to be applied to all foreign currency components and
the other to the local currency component of the bid price. Such
an increase shall not be taken into account in the bid evaluation.
3. In the procurement of goods in accordance with this Part A,
the Borrower shall use the relevant standard bidding documents
issued by the Bank, with such modifications thereto as the Bank
shall have agreed to be necessary for the purposes of the Project.
Where no relevant standard bidding documents have been issued by
the Bank, the Borrower shall use bidding documents based on other
internationally recognized standard forms agreed with the Bank.
Part B
Preference for Domestic Manufacturers
In the procurement of goods in accordance with the procedures
described in Part A.1 hereof, goods manufactured in the Russian
Federation may be granted a margin of preference in accordance
with, and subject to, the provisions of paragraphs 2.55 and 2.56
of the Guidelines and paragraphs 1 through 4 of Appendix 2
thereto.
Part C
Other Procurement Procedures
1. Items or groups of items for goods estimated to cost the
equivalent of 2,000,000 USD or less per contract, up to an
aggregate amount equivalent to 33,190,000 USD, may be procured
under contracts awarded on the basis of comparison of price
quotations obtained from at least three suppliers from at least
three different countries eligible under the Guidelines, in
accordance with procedures satisfactory to the Bank.
2. Items or groups of items for goods estimated to cost the
equivalent of 10,000 USD or less per contract, up to an aggregate
amount equivalent to 500,000 USD, may be procured under contracts
awarded on the basis of comparison of price quotations obtained
from at least three suppliers from the Russian Federation eligible
under the Guidelines, in accordance with procedures satisfactory
to the Bank.
Part D
Review by the Bank of Procurement Decisions
1. Review of invitations to bid and of proposed awards and
final contracts:
(a) With respect to each contract for goods estimated to cost
the equivalent of 300,000 USD or more, the procedures set forth in
paragraphs 2 and 4 of Appendix I 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
Bank pursuant to said paragraph 2 (d) shall be furnished to the
Bank 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 I to the Guidelines shall apply. Where payments for
such contract are to be made out of the Special Account, said
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 Bank pursuant to said paragraph 3
shall be furnished to the Bank as part of the evidence to be
furnished pursuant to paragraph 4 of Schedule 6 to the Loan
Agreement.
(c) The provisions of the preceding subparagraph (b) shall not
apply to contracts on account of which withdrawals from the Loan
Account are to be made on the basis of statements of expenditure.
2. The figure of 15% is hereby specified for purposes of
paragraph 4 of Appendix 1 to the Guidelines.
Section II. EMPLOYMENT OF CONSULTANTS
1. In order to assist the NPAF in the carrying out of Part B
of the Project, the NPAF shall employ consultants whose
qualifications, experience and terms and conditions of employment
shall be satisfactory to the Bank. Such consultants shall be
selected in accordance with principles and procedures satisfactory
to the Bank on the basis of the "Guidelines for the Use of
Consultants by World Bank Borrowers and by the World Bank as
Executing Agency" published by the Bank in August 1981 (the
Consultant Guidelines). For complex, time-based assignments, the
NPAF shall employ such consultants under contracts using the
standard form of contract for consultants' services issued by the
Bank, with such modifications as shall have been agreed by the
Bank. Where no relevant standard contract documents have been
issued by the Bank, the Borrower shall use other standard forms
agreed with the Bank.
2. Notwithstanding the provisions of paragraph 1 of this
Section, the provisions of the Consultant Guidelines requiring
prior Bank review or approval of budgets, short lists, selection
procedures, letters of invitation, proposals, evaluation reports
and contracts shall not apply to contracts estimated to cost less
than 100,000 USD equivalent each. However, this exception to prior
Bank review shall not apply to the terms of reference for such
contracts or to the employment of individuals, to single source
selection of firms, to assignments of a critical nature as
reasonably determined by the Bank or to amendments of contracts
raising the contract value to 100,000 USD equivalent or above.
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