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Law No. 79 Of 23 December 1991 Ratification Of The Loan Agreement Between Romania And The International Bank For Reconstruction And Development, Concluded In Washington On 7 October 1991

Original Language Title:  LEGE nr. 79 din 23 decembrie 1991 pentru ratificarea Acordului de împrumut dintre România şi Banca Internaţională pentru Reconstrucţie şi Dezvoltare, încheiat la Washington la 7 octombrie 1991

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LEGE No. 79 of 23 December 1991 for the ratification of the Loan Agreement between Romania and the International Bank for Reconstruction and Development, concluded in Washington on 7 October 1991
ISSUER PARLIAMENT
Published in OFFICIAL GAZETTE NO. 267 of 31 December 1991



The Romanian Parliament adopts this law + Article UNIC. The Loan Agreement between Romania and the International Bank for Reconstruction and Development, concluded in Washington on October 7, 1991, is ratified. This law was adopted by the Chamber of Deputies at its meeting on December 18, 1991, in compliance with the provisions of 74 74 para. (2) of the Romanian Constitution. CHAMBER OF DEPUTIES PRESIDENT MARTIAN DAN This law was adopted by the Senate at the meeting of December 20, 1991, in compliance with the provisions of art 74 74 para. (2) of the Romanian Constitution. SENATE PRESIDENT academician ALEXANDRU BIRLADEANU LOAN AGREEMENT 3409 EN (Project for rehabilitation of the health sector) between Romania and the International Bank for Reconstruction and Development Agreement, dated October 7, 1991, between Romania (Lending) and the International Bank for Reconstruction and Development (Bank) Taking into consideration that the Loan, convincing itself regarding the feasibility and priority of the project described in Annex no. 2 of this agreement, asked the Bank for assistance in financing the project, taking into consideration that the Bank has agreed, on the basis, inter alia, of the above mentioned, to grant the loan to the borrower in the terms and conditions set out in this Agreement, The abovementioned parties have therefore agreed, as follows: + Article 1 General Conditions; Definitions Section 1.01-"The general conditions applicable to the loan and guarantee agreements" of the Bank, dated January 1, 1985, with the changes set out below (general conditions) are an integral part of this agreement: a) The last sentence of section 3.02 is deleted. b) In section 6.02, subparagraph k) is rewritten as subparagraph (1) and a new subparagraph k) is added, having the following content: "k) An extraordinary situation will be arisen, under which any additional drawdowns on the loan will be inconsistent with the provisions of Section 3 of Article III of the Agreement with the Bank." Section 1.02-Unless otherwise requires the context, the terms defined in the general conditions have the respective meanings displayed there, and the following additional terms have the following meanings: a) "MOH" means the Ministry of Health of the Loan; b) "MCH" means the Health and Child Health Department of the Ministry of Health (Directorate-General for Mother, Child and Adolescent Assistance); c) "IMCA" means the Institute of Mother, Child and Adolescent of Lending; d) "dispensary" means primary care unit; e) "PCU" means the Project Coordination Unit, established within the Ministry of Health, which will be maintained in accordance with the provisions of Part A of Annex no. 5 5 of this agreement; f) "EPSEU" means the Family Planning and Sexual Education Unit, established within the Directorate-General for the assistance of the mother, child and adolescent; g) "PBNS" means the Center for the improvement of the average medical staff in Bucharest; h) 'management committee' means the Coordination Committee of the Loan for Strategic Studies for Reform; i) "HSMI" means the National Institute of Health and Management Services of the Ministry of Health; j) "SHSM" means the School of Sanitary Systems and Management, which will be established within HSMI, within Part B (3) of the project; k) "NCHPE" means the National Center for Health Promotion and Health Education, which will be established in accordance with Part A (6) of the project; l) "RHC" means a Health Centre of human reproduction in the health care system of the Ministry of Health; m) "MOI" means the Ministry of Industry of Lending; n) "special account" means the account referred to in section 2.02 b) of this agreement, and o) "interbank market rate" means the current currency exchange rate for the currency of the borrower, established periodically, in accordance with the provisions Law no. 15/1990 of the borrower. + Article 2 Loan Section 2.01-The Bank agrees to borrow the Loan, in the terms and conditions on display or referred to in the Loan Agreement, various currencies that will have an amount equivalent to an amount of one hundred and fifty million dollars. ($150,000,000), representing the amount of the loan draws, with each draw assessed by the Bank taking into account the date of this draw. Section 2.02-a) The loan amount can be drawn from the loan account, in accordance with the provisions of Annex no. 1 to this agreement, for expenses made (or to be made, if the Bank agrees) related to the reasonable cost of the goods and services required by the project described in Annex no. 2 2 of this agreement and to be financed from the loan. b) The borrower will open, for the project's destinations, and maintain a special deposit account in dollars (or other convertible currency, with the Bank's agreement) to a bank, in terms and conditions satisfactory to the Bank, including adequate protection against damage, attachment or seizure. Deposits and payments in and from the special account will be made in accordance with the provisions of Annex no. 6 6 of this agreement. Section 2.03-The expiry date will be June 30, 1996 or later, as determined by the Bank. The bank will promptly announce on the respective Loan the postponement of the date. Section 2.04-The borrower will pay the Bank an non-use charge at the rate of three-fourths of a percentage (3/4 of 1%) per annum on the capital of the periodic non-drawn borrower. Section 2.05-a) The loan will pay interest on the capital of the loan drawn and repaid periodically, at an equal rate, for each interest period, with the cost of qualified loans determined compared to the previous 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 will pay the cumulative interest in the unused capital during the previous interest period, calculated at the rate applicable during that interest period. b) Indate that will be possible after the end of each semester, the Bank will communicate to the borrower the cost of qualified loans determined for that semester. For the purposes of this section: (i) 'period of interest' means a period of 6 months ending on the date immediately preceding each date specified in section 2.06 of this Agreement, beginning with the period of interest in which this agreement is signed; (ii) "cost of qualifying loans" means the cost, as determined reasonably by the Bank and expressed as one percent per year, to the unpaid loans of the Bank committed after June 30, 1982, excluding those loans or parts thereof allocated by the Bank to finance: (A) the investments of the Bank and (B) loans that may be made by the Bank after 1 July 1989, with interest determined otherwise than is shown in the paragraph a) of this section; ((iii) "semester" means the first 6 months or the next 6 months of a calendar year. d) At that time, which may be specified by the Bank by notification to the borrower, with a notice not less than 6 months, paragraphs a), b) and c) (iii) of this section will be drafted as follows: " (a) The borrower will pay the interest for the part of the loan drawn and repaid periodically at a rate, for each quarter, equal to the cost of the qualified loans, determined for the previous quarter, plus one half of a percentage (1/2 of 1 1%). On each of the dates specified in section 2.06 of this agreement, the borrower will pay the cumulative interest for the non-repaid part corresponding to the previous interest period, calculated at the rate applicable during this period of interest. " " (b) Ingiven what is possible to apply in practice, after the end of each quarter, the Bank will communicate to the borrower the cost of the qualified loan determined for that quarter:. "" (c) (iii) "quarter" shall mean a period of 3 months from 1 January, 1 April, 1 July or 1 October in a calendar year ". Section 2.06-Interest and other costs will be payable, semi-annually, on June 1 and December 1 each year. Section 2.07-The borrower will repay the loan in accordance with the amortization chart set out in Annex no. 3 3 of this agreement. + Article 3 Project execution Section 3.01-a) The borrower declares his commitment to the objectives of the project as set out in Annex no. 2 of this agreement and, for this purpose, will carry out the project through the Ministry of Health and the Ministry of Industry with due attention and efficiency, in accordance with the specific public, financial and administrative health practices and will ensure, with timeliness, funds, facilities, services and other resources required for the project. b) Without limiting the provisions of paragraph a) of this section and unless the Loan and the Bank will otherwise agree, the Loan will carry out the project in accordance with the application program set out in Annex no. 5 5 of this agreement. Section 3.02-Unless the Bank agrees otherwise, the procurement of the goods and services of the consultants required for the project and which will be financed from the loan will be governed by the provisions of Annex no. 4 4 of this agreement. + Article 4 Financial terms and others Section 4.01-a) The borrower will hold or determine the keeping of adequate records and accounts that reflect, in accordance with the accounting practices in force, the operations, resources and expenses related to the project of the departments or Lending agencies responsible for carrying out the project of any part of it. b) Lending: ((i) shall keep records and accounts referred to in paragraph a) of this section, including those for the special account, for each fiscal year for which the accounting expertise was carried out, in accordance with the appropriate principles of accounting expertise applied consistently by independent accounting experts, acceptable to the Bank. (ii) provide the Bank, as soon as it is available, but in any event not later than 6 months after the end of each year, the report of this expertise made by the said accounting experts, having the scope and details that the Bank will be reasonably required; and (iii) will periodically provide the Bank with any other information regarding the said records and accounts, as well as the expertise, as will reasonably be required by the Bank. c) For all expenses for which draws were made from the loan account, on the basis of supporting documents of expenses, ((i) shall keep or shall determine, in accordance with paragraph a) of this section, of records and accounts reflecting such expenditure; (ii) will keep, at least one more year after the Bank has received the expert report for the fiscal year in which the last drawing from the loan account was made, all documents (contracts, orders, invoices, transport documents, receipts and other documents), highlighting, these expenses; (iii) enable the representatives of the Bank to examine these documents; and (iv) ensure that these records and accounts are included in the annual expertise referred to in paragraph b) of this section and that the report of this expertise contains a separate opinion of the said accounting experts showing that the declarations of expenditure presented during the respective fiscal year, and the internal procedures and controls involved in their preparation, can ensure the correctness of the drawdowns to which they relate. Section 4.02-Lending: a) will prepare and review together with the Bank, until September 30, 1992, a marketing and distribution plan for contraceptives and b) will adapt the fees charged by the health institutions of the Loan for carrying out pregnancy interruptions and taking other appropriate measures, all of which are intended to make the use of contraceptives financially a preferred alternative for family planning. Section 4.03-a) Lending: (i) will ensure that all drugs procured under Part A (4) of the project are sold to the health institutions and pharmacies of the Loan at least at their price (CIF) converted into the currency of the Loan to The exchange rate of the market, plus an adequate distribution margin and (ii) will finalise the national medicine nomenclature for the public pharmaceutical sector until 1 March 1992. b) With regard to paragraph a) of this section, the term "market exchange rate" means the average of the interbank rate during the calendar month preceding the date of payment by the Loan for the drugs procured under Part A (4) a the project or any other market exchange rate published on the date of that payment by the Central Bank of the Loan and acceptable to the Bank. + Article 5 Date of entry into force; Cease Section 5.01-The following case is specified as an additional condition for the entry into force of the Loan Agreement, within the meaning of those referred to in section 12.01 c) of the general conditions, namely that the project coordination unit has been classified in accordance with the provisions of paragraph A (1) of Annex no. 5 5 of this agreement. Section 5.02-The 90-day deadline after the date of this agreement is specified for the purposes of section 12.04 of the "general conditions". + Article 6 Borrower's Representative; Addresses Section 6.01-The Minister of Economy and Finance of the Loan is designated as the Representative of the Loan for the purposes of section 11.03 of the "general conditions". Section 6.02-The following addresses are specified for the purposes of section 11.01 of the "general conditions": For Borrower: Ministry of Economy and Finance str. Madam no. 8 Bucharest Romania TelegraficaTelex Ministry of Economy and Finance Bucharest11239 MINFIN For the Bank: International Bank for Reconstruction and/Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Address telegraficaTelex INTBAFRAD197688 (TRT) Washington, D.C. 248423 (RCA) 64145 (WUI) or 82987 (FTCC) For the certification of the above, the present parties, through the authorized representatives according to the procedure, agreed that this agreement should be signed, on their behalf, in the District of Columbia, U.S., on the day and year mentioned at the beginning of the agreement. ROMANIA by Authorised representative, V. Constantinescu INTERNATIONAL BANK OF RECONSTRUCTION AND DEVELOPMENT by Regional Vice-President Europe, the Middle East and North Africa, H. Kohli + Annex 1 DRAWING FROM THE LOAN 1. The table below shows the categories of articles to be financed from the loan, the allocation of the loan amounts for each category and the percentage of expenditure financed for each category: CategoryAmount of allotted loan (expressed in dollar equivalent)% of expenditures to be funded (1) Goods: 100% of foreign currency expenditures a) medicalmaterial76.000.000100% of local expenditures (factory output cost) b) equipment, materials, spare parts and vehicles 45.000.000 (2) Consultancy and preparations9.000.000100% of the expenditure in foreign currency (3) 2. For the purposes of this Annex: a) the term "foreign currency expenditures" means expenses in the currency of any country other than that of the borrower, for goods or services supplied from the territory of another country than that of the Loan: and b) the term "local expenses" means expenses in the currency of the Loan or for goods or services provided from the territory of the Loan. 3. Without contravening the provisions of paragraph 1 above, no drawdowns will be made related to payments for expenses prior to the date of this agreement, except for draws, the total amount of which will not be able to exceed the equivalent of 10.000.000 5, which may be made on account of payments for expenses made before the date of signature of the agreement, but after April 30, 1991. + Annex 2 PROJECT DESCRIPTION The objectives of the project are to rehabilitate and modernize the loan system for the supply of primary care and to initiate a major restructuring of the management, organization and financing of the health sector. The project is made up of the following parts, possibly modified as may periodically agree on the Loan or the Bank to achieve these objectives: Part A: Primary health care (1) Rehabilitation of approximately 420 dispensaries in the rural area and provision for this purpose of clinical and dental equipment, educational materials, services of specialists and scholarships. ((2) Improvement of human reproductive health assistance services by: a) supply to the I.O.M.C. of: (i) equipment for the intensive care unit (high-risk and neonatal pregnancies) and the Cancer Detection Centre and for the training of general medicine doctors, midwives and nurses and (ii) training grants for instructors and for new specialists, public communications and management; b) providing audio-visual and technical assistance equipment and training scholarships for the family planning and sex education unit (EPSEU); c) providing: (i) equipment, educational and training materials for 10 human reproductive health centres; (ii) equipment and minor renovation works for the opening or modernization of about 230 human reproductive health centers in county and city and polyclinic hospitals; (iii) technical assistance for the development of specialized training and training materials for doctors and (iv) contraceptives; d) modernizing the curative and diagnostic capacity of about 50 territorial units (maternity wards), including the provision of equipment and training. ((3) Improving previous and workplace training for nurses and doctors by: a) provision, for the Center for the improvement of the medium frameworks, of technical assistance, of training scholarships, of equipment and programs for the development of training programs; b) providing audio-visual and teaching materials and equipment for about 41 health schools; and c) provision of equipment and training materials, scholarships and technical assistance to improve the improvement of doctors. ((4) a) Providing: (i) basic medicines and other medical supplies; ((ii) equipment to ensure the continuous production of vaccines and blood products; and (iii) technical assistance, computing equipment and materials to support regional distribution systems for medical supplies in inventory management, storage, distribution and accounting; b) preparation of a strategic plan for the restructuring and rehabilitation of the domestic pharmaceutical industry, based on a comprehensive study. ((5) Improvement of emergency services by providing: a) communication equipment for about 60 dispensaries; b) ambulances and spare parts for the county emergency transportation system and c) technical assistance in system review of emergency transport at county level. (6) Improvement of health awareness and participation of the population in healthcare, by: a) establishment at the Institute of Hygiene and Public Health in Bucharest of a national center for health promotion and health education and provision for this center of: (i) refresher grants; (ii) technical assistance for management, evaluation and monitoring; and (iii) equipment for the production of materials for the promotion of health and training; b) the provision of scholarships and office equipment for the medical ethics unit to be established at the Ministry of Health; c) application of measures to promote health protection at county level, including: (i) training programs for staff working in the county health education laboratories; (ii) the provision of equipment for these laboratories for the production of health promotion and health education materials at local level; d) establishment of a fund to support initiatives of local and non-governmental groups to promote health; e) provision of technical assistance, scholarships, equipment and materials to promote environmental health. Part B: Restructuring of the healthcare system (1) Preparing and starting the application of a new national health strategy, including: a) the implementation of health policy studies and the development, on this basis, of the reform proposals; b) preparation by the coordination committee, assisted by experts, of a plan for the implementation of these reforms, broken down over time, including the specification of the resource demand for it; c) the realization of a 2-year pilot decentralization program in four counties, including providing for these counties technical assistance in the preparation and application of their action plans for health care insurance, scholarships for the management of medical facilities, equipment and materials and d) introduction of new operational procedures for the decentralization of the management of the healthcare system. (2) Development of a national system of medical information, including the provision of technical assistance, training and equipment required for this operation. ((3) Establishment, within the Institute of Sanitary Services and Management, of the School of Sanitary Systems and Management, which will be responsible for the training of leading health professionals and the provision of scholarships and equipment for it. The project will be concluded on 31 December 1995. + Annex 3 DEPRECIATION SCHEDULE Date of payment of the principal amount (expressed in dollars) *) Every 1 June and 1 December from 1 June 1997 to 1 December 20086.250,000 Note * *) The figures in this column represent the dollar equivalent determined in accordance with the respective drawing data. (See "general conditions", sections 3.04 and 4.03). EARLY REPAYMENT PREMIUMS In accordance with section 3.04 b) of the "general conditions", the first repayment payable on any capital ratio that is reimbursed in advance will be the percentage specified below for the time of the early repayment. The time of repayment anticipateThe first interest rate (expressed as per cent per year) applicable to the loan at the date of early repayment multiplied by: Not more than 3 years before maturity 0,18 More than 3 years, but not more than 6 years before maturity 0,35 More than 6 years, but not more than 11 years before maturity 0,65 More than 11 years, but not more than 13 years before maturity 0,88 More than 13 years before maturity + Annex 4 PROCUREMENT AND SERVICES OF CONSULTANTS Section I: Prosecution of goods Part A: International competitive bidding 1. Expecting the provisions of Part C, the goods will be purchased under contracts awarded in accordance with the procedures set out in Sections I and II of the " Directives on the procurement of goods in the framework of loans B.I.R.D. and loans I.D.A. " published by the Bank in May 1985. 2. The borrower will establish satisfactory arrangements for the Bank with the United Nations Children's Fund (UNICEF), under which UNICEF will act as the Loan Agent for the procurement of consumable medicines and medical supplies, in consistent with the procedures referred to in paragraph 1 of this Part A. Part B: Preference for domestic manufacturers In the procurement of goods in accordance with the procedures described in Part A, point 1, goods manufactured in Romania may be granted a margin of preference, exposed to paragraphs 2.55 and 2.56 of the directives and paragraphs 1 to 4 of the appendix no. 2 2 to these. Part C: Other procurement procedures 1. The drugs and equipment found in the UNICEF deposits can be provided directly by UNICEF to the Lending within the understandings and in the satisfactory terms and conditions for the Bank. 2. The components of equipment, drugs, contraceptives or materials estimated to cost no more than the equivalent of $200,000 per contract, up to a total amount not exceeding the equivalent of $15,000,000, can be purchased within some contracts awarded on the basis of price comparison of suppliers, entered in a list of at least three suppliers from at least two different countries eligible under the Directives, in accordance with the procedures acceptable to the Bank. 3. a) Programs and teaching materials estimated to cost in total the equivalent of not more than $2,700,000, b) the necessary spare parts, compatible with existing equipment, estimated to cost in total the equivalent of no more than $3,000,000, and c) patented drugs, contraceptives and materials estimated to cost in total the equivalent of no more than $4,900,000, can be purchased through contracts that will be concluded with the respective suppliers in the terms and conditions acceptable to Bank. Part D: Review by the Bank of procurement decisions 1. Review of tender offers, proposed adjudications and final contracts: a) With regard to each contract estimated to cost the equivalent of $200,000 or more, the procedures set out in paragraphs 2 and 4 of the appendix no. 1 1 to the directives. If payments for such a contract will have to be made from the special account, these procedures will be amended to ensure that the two compliant copies of the contract, required by the Bank, in accordance with paragraph 2 d), will be provided to it by making the first payment from the special account with regard to that contract; b) As regards each contract not governed by the preceding paragraph, the procedures set out in paragraphs 3 and 4 of the appendix no. 1 1 of the Directives. If payments for such contracts will have to be made from the special account, the said procedures will be amended to ensure that the two compliant copies of the contract, together with other information required by the Bank, in accordance with with paragraph 3, shall be provided to it as part of the proof to be presented in accordance with paragraph 4 of Annex no. 6 6 of this agreement. c) The provisions of the preceding subparagraph b) shall not apply to contracts in which the Bank has authorized draws on the basis of declarations of expenditure. 2. The figure of 15% is on this path specified for the destinations of paragraph 4 of the appendix no. 1 1 of the Directives. Section II: Employment of consultants To assist the Loan in carrying out the project, the Loan will engage or make the Ministry of Health or the Ministry of Industry hire consultants, whose qualification, experience, terms and conditions of employment will be satisfactory for Bank. These consultants will be selected in accordance with the satisfactory principles and procedures for the Bank on the basis of the "Directives for the use of consultants by World Bank debtors and by the World Bank as an enforceable agency", published by the Bank in August 1981. + Annex 5 IMPLEMENTATION PROGRAMME A. Project coordination The Ministry of Health will coordinate the implementation of the project through the Project Coordination Unit (PCU) established and to be maintained within its framework and, for this purpose: (1) will ensure that the PCU classification includes at least one project coordinator, a procuring specialist, an accountant and a secretary; and (2) will assign to the Project Coordination Unit the responsibility for coordinating the procurement of goods and services within the project, maintaining the project's accounting and preparing its revision, as well as the connection with the Bank, for the purpose project administration and control. B. Project implementation (1) The loan will determine the Ministry of Health: a) ensure the proper framing of the Family Planning and Sexual Education Unit by December 31, 1991; b) prepare, within the framework of satisfactory reference terms for the Bank, and provide the Bank, for review and observations, until 1 July 1992, a plan of professional development for assistants and to initiate the application of this plan until 1 January 1993, taking into account the Bank's observations on it. (2) The loan will cause the Ministry of Health to assign to its human resources directorate two more highly qualified professionals and experience to respond to the preparation of Part A (3) of the project. (3) The loan will determine the Ministry of Industry: a) to prepare, within the framework of satisfactory terms of reference for the Bank, and to review with the Bank, until 31 December 1992, the strategic plan for the pharmaceutical industry, referred to in Part A (4) b) of the project, including a phasing-out for its implementation; and b) based on this review, let the application of this plan begin. (4) The loan will determine the Ministry of Health, until December 31, 1992: a) to organize and frame the National Center for Health Promotion and Health Education in a satisfactory manner for the Bank; b) prepare, within the framework of satisfactory terms of reference for the Bank and provide the Bank, for review, a plan to implement the measures included in Part A (6) b), c) and d) of the project; and c) accordingly, to carry out this plan by taking into account the Bank's observations thereto. (5) The loan will determine the Ministry of Health: a) to complete, within the framework of satisfactory terms of reference for the Bank, the studies referred to in Part B (1) a) of the project and to prepare, on their basis, proposals for the health policy reform to which the refer to the named part B (1) of the project; and b) review these proposals with the Bank by 31 December 1992 and prepare, on the basis of this review, by 1 July 1993, an action programme for the implementation of these proposals, including a phased programme. (6) The loan will determine the Ministry of Health: a) to introduce, in a satisfactory manner for the Bank, until December 31, 1991, the operational procedures referred to in Part B (1) d) of the project, for the decentralization of the management system for health services; b) commence the application of the pilot program, referred to in Part B (1) c) of the project, until 1 January 1992, and to provide the Bank with semi-annual reports on the evolution of the implementation of this programme; c) to prepare, within the framework of satisfactory terms of reference for the Bank, and to provide the Bank, for observations, until 31 December 1993, a report assessing this programme and taking into question a plan for its introduction at the level national; and d) to begin, accordingly, the implementation of this plan, taking into account the Bank's observations on it. (7) The loan will determine the Ministry of Health, until March 1, 1992: a) to ensure adequate attestation for the curriculum and graduates of the School of Sanitary Systems and Management b) to prepare, within the framework of satisfactory terms of reference for the Bank, and to review with the Bank a system of incentives designed to attract qualified persons to health management careers. C. Reports The borrower will determine the Health Ministry a) to prepare and provide to the Bank semi-annual reports, in the form and with the satisfactory content for the Bank, on the project application stage and annual reports, assessing on the basis of the satisfactory indicators for the Bank, the impact project; and b) to undertake with the Bank, in June 1993, a revision of the project midterm. + Annex 6 SPECIAL ACCOUNT 1. For the purposes of these Annexes: a) the term 'eligible categories' means categories (1) and (2) set out in the table in paragraph 1 of Annex no. 1 1 of this agreement; b) the term "eligible expenses" means expenses related to the reasonable cost of the goods and services required for the project and which will be financed from the loan, periodically allocated to the eligible categories in accordance with the provisions of Annex no. 1 1 of this Agreement; and c) the term "authorized allocation" means an amount equivalent to $10,000,000 that will be drawn from the account of the loan and will be deposited in a special account, in accordance with paragraph 3 a) of this annex. 2. Payments from the special account will be made exclusively for eligible expenses, in accordance with the provisions of this annex. 3. After the Bank has received proof, satisfactory for it, that the special account has been opened in due time, the draws of the authorized allowances and subsequent draws for the replenishment of the special account will be made as follows: a) For draws from authorized allowances, the Loan will provide the Bank with an application or applications for a submission or deposits that do not exceed the total amount of the authorized allowances. On the basis of these requests, the Bank, on behalf of the Loan, will draw from the loan account and deposit in the special account that amount or those amounts required by the Loan. b) (i) For the replenishment of the special account, the Loan will provide the Bank with requests for deposits in the special account at those intervals that the Bank will specify. ((ii) Before or on the date of each such request, the Loan shall provide the Bank with the documents and other evidence required, in accordance with paragraph 4 of this Annex, for payment or payments in connection with which the replenishment is required. On the basis of each such request, the Bank on behalf of the Loan, will draw from the loan account and deposit into the special account that amount requested by the Loan and shown by documents and other evidence, to be paid from the special account for eligible expenses. All these deposits will be drawn by the Bank from the loan account in accordance with the respective eligible categories, justified by documents and other evidence. 4. For each payment made by the Loan from the special account, the Borrower, on the date the Bank reasonably requires it, will provide the Bank with these documents and other evidence, showing that that payment was made exclusively for eligible expenses. 5. Without opposing the provisions of paragraph 3 of this annex, the Bank shall not be allowed to make additional deposits in the special account: a) if, at any time, the Bank has decided that all additional draws be made by the Loan 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) with the total amount not drawn from the loan, less the amount of any outstanding commitment recorded by the Bank, in accordance with section 5.02 of the "general conditions", will be equal to the equivalent of twice the amount of the authorized allowance. Accordingly, the drawing from the loan account of the remaining undrawn amount of the allocated loan will follow those procedures that will be specified by the Bank through communication to the Loan. Such additional draws will be made only after and to the extent that the Bank will be convinced that all these amounts, remaining deposited in the special account until the date of this notification, will be used to make payments for expenses eligible. 6. a) If the Bank has decided, at any time, that any payment from the special account: ((i) was made for an expense or in an ineligible amount, in accordance with paragraph 2 of this annex; or (ii) was not justified by the evidence provided to the Bank, the Loan, immediately after the Bank's notification: A) provide that additional evidence that the Bank may require; or B) will deposit in the special account (or, if the Bank requires it, will reimburse the Bank) an amount equal to the amount of that payment or parts thereof, unjustified or ineligible. If the Bank does not agree otherwise, no additional deposit will be made by the Bank in the special account until the Loan has been provided this evidence or made that deposit or will not be refunded, as the case may be. d) If the Bank is to be determined, at any time, that any remaining amount in the special account will not be required to cover additional payments for eligible expenses, the Loan, promptly, after the notification from the Bank, will reimburse the Bank that amount Outstanding. c) The loan may, after notification from the Bank, reimburse to the Bank all or any part of the funds deposited in the special account. d) The repayments to the Bank made in accordance with paragraphs 6 a), b) and c) of this annex shall be passed to the credit of the loan account for the drawing that follows or for cancellation in accordance with the respective provisions of this agreement, including in the "general conditions". ------------------------