AGREED MINUTES OF NEGOTIATIONS

Transcription

1 AGREED MINUTES OF NEGOTIATIONS between the Republic of Costa Rica and the International Bank for Reconstruction and Development for the Higher Education Improvement Project 1. Introduction. Negotiations for a proposed Bank Loan of US$200,000,000 in support of the Higher Education Improvement Project ( Project ) were held between a delegation of the Republic of Costa Rica ( the Borrower ) and the International Bank for Reconstruction and Development ( the Bank ) in San Jose, Costa Rica, with videoconference connection to the Bank s offices in Washington, D.C., on August 8 9, Parties. The Borrower s delegation was led by Mr. Melvin Quirós Romero, Under-Director of Public Credit, Ministry of Finance, and included: Vice-Minister Juan Carlos Pacheco Romero, Rosibel Bermúdez, Rossaura Trigueros y Andrea Ocampo (Ministry of Finance); Minister Leonardo Garnier, Verónica Wachong and Idania Arteaga (Ministry of Public Education); Minister Alejando Cruz and Vice-Minister Keilor Rojas (Ministry of Science and Technology); Minister Roberto Gallardo (Ministry of Planning and Economic Policy; Henning Jensen Pennington (Universidad de Costa Rica); Sandra Leon Coto (Universidad Nacional); Julio Calvo Alvarado (Instituto Tecnológico de Costa Rica); Luis Guillermo Carpio Malavasi (Universidad Estatal a Distancia); and Eduardo Sibaja, Gastón Baudrit and José Andrés Masís (CONARE). The Bank s delegation was led by Mr. Marcelo Becerra, Task Team Leader for the Project, and included: Jimena Garrote (LEGLE), Fabrizio Zarcone (LCC2C) and Guillermo Toral (LCSHE), in San Jose; and Tomas Socias (LCSPT), Patricia de la Fuente Hoyes (CTRLD), Fabienne Mrzocka (LCSFM) and Luis de la Plaza (BDM), in Washington D.C. 3. Documents reviewed. The draft Loan Agreement, dated August 3, 2012 was reviewed. The revised version, dated August 8, 2012, is attached as Annex 1 to these minutes. In addition, the following documents were reviewed: (a) the draft Project Appraisal Document and its annexes (PAD) dated August 9, 2012 (Annex 2); (b) the draft Disbursement Letter and its annexes (Annex 3); and (c) the Borrower s Loan Choices Worksheet (Annex 4). 4. These minutes are not a complete record of the negotiations, but are intended to reflect the main understandings reached during negotiations and to identify the principal changes agreed in the above mentioned draft Loan Agreement. Such changes and understandings are indicated in the revised version of the Loan Agreement and in the paragraphs below. Summary of Discussions and Agreements 5. Authorization to Negotiate. The Bank acknowledges receipt of the Letter from the Minister of Finance authorizing the Borrower s negotiations team.

2 6. IBRD Loan Terms. The financial terms of the Loan were discussed and the following agreements were reached: IBRD financial product Currency & Amount Front End Fee Amortization Fixed-Spread Loan (FSL) with a repayment schedule linked to commitments and with the all conversion options except Automatic Rate Fixing. $200,000,000 United Sates Dollars. Fee equal to one quarter of one percent (.25%) of the loan amount payable 60 days after effectiveness from the borrower's own funds. Payable in 30 years, including a 5-year grace period with a level repayment schedule with repayments on each April 15th and October 15 th. 7. The Borrower was notified that in accordance with the General Conditions applicable to the Loan, the fixed spread over LIBOR applicable to the loan would be determined at the date of signing of the Loan Agreement and could therefore be different from the spread prevailing at the time of negotiations. 8. The Bank confirmed that the term Interest Period is defined in the General Conditions applicable to the Loan as the initial period from and including the date of the Loan Agreement to but excluding the first Payment Date occurring thereafter, and after the initial period, each period from and including a Payment Date to but excluding the next following Payment Date. 9. Amortization Schedule. The Borrower s choices of Loan financial terms are summarized in a worksheet attached to these Minutes (Annex 4) and include the selection of all conversion options (section 5.a) with the premia for caps and collars financed from the Borrower's own funds (section 5.b). The Borrower confirms that these choices are consistent with the amortization schedule presented in Schedule 3 of the Loan Agreement. 10. Disbursement Arrangements. The Disbursement Letter and the relevant aspects of the disbursement arrangements under this Project were discussed with the Borrower s Delegation. Specific points addressed were the following: a. Agreed on the 4 month grace period after Loan Closing Date and clarified that the Borrower can continue to submit applications for withdrawal and supporting documentation for eligible expenditures incurred prior to the Closing Date. The only exception being the payment to the auditors to complete the final financial audit. b. In the case that the payments to the auditors needs to be made during or after the 4 month grace period, the borrower should notify the Bank and request the required amount of the payments be deposited in an escrow account. It was

3 further clarified that contract with the auditor, regardless of when payment will be made, needs to be signed prior to the closing date for a fixed amount. c. Discussed and agreed that the reporting of eligible expenditures paid from the Designated Account would be done on a quarterly basis; however, this does not prevent the project from reporting expenditures on a more frequent basis. 11. Withdrawal of Loan Proceeds. With respect to Section IV.A.1 of Schedule 2 to the Loan Agreement, the Borrower explained that the proceeds of the Loan will be withdrawn by the Participating Universities, after the corresponding authorizations have been sent to the Bank. 12. Front End Fee, Project Audits and CSE Financing. The Borrower informed that (a) the Front End Fee, (b) all project audits, including the final financial audit, and (c) the costs related to the establishment and maintenance of the CSE, will be paid with funds provided by CONARE. 13. Effectiveness. Pursuant to Section V of the Loan Agreement, effectiveness is conditional upon the signing of the AMIs, the CONARE Agreement, and the SINAES Agreement, and the submission to the Bank of legal opinions, acceptable to the Bank, with respect to each of the AMIs. 14. Project description. The Borrower requested and the Bank agreed to include more information about the activities to be implemented under Part I of the Project in the Project description in Schedule 1 in the Loan Agreement. In addition, the Bank clarified that all references to Part I, Part II.1, II.2, and II.3 in the Loan Agreement correspond to those to Component 1, Component 2.1, 2.2, and 2.3 in the PAD. 15. Subsidiary Agreements. The draft AMIs, the draft CONARE Agreement, and the draft SINAES Agreement, were discussed and agreed upon. A copy of each agreed draft subsidiary agreement was received by the Bank and found acceptable. The Borrower explained that the Subsidiary Agreements will be signed immediately after the Loan Agreement is signed, and attached to the Loan Agreement to be sent to Congress for approval. The Borrower s Delegation explained that the Government Council (Consejo de Gobierno) will issue a resolution establishing that the Ministry of Public Education will sign the Subsidiary Agreements representing the Borrower. 16. The Borrower also informed that the AMIs will be signed by the Participating Universities in the framework of article 84 of the Borrower s Constitution. 17. Monitoring and Evaluation Committee. It was ratified that the committee will be external and impartial, and that its composition and members selection process is detailed in the PAD and the Operational Manual. 18. Safeguards. It was agreed that the Project will be carried out in accordance with the ESMF, and the IPPF. If was also agreed that the Multiannual Indigenous Peoples Plan will be carried out under the Project. It was discussed and agreed that activities related to the carrying out of the Multiannual Indigenous Peoples Plan, the ESMF, and any needed Environmental Management Plan will be included in the corresponding Annual

4 Implementation Plan. It was finally agreed that no Resettlement shall occur under the Project, including Subprojects. 19. Project Reports. It was agreed that Project Reports will be prepared and furnished to the Bank no later than two months after the end of the period covered by such report, as set forth in Section II.A.1 of Schedule 2 of the Loan Agreement. I was also agreed that for purposes of Section 5.08 (c) of the General Conditions, the report on the execution of the Project and related plan required pursuant to that Section shall be furnished to the Bank not later than three months after the Closing Date. 20. Project Appraisal Document (PAD). The Borrower s Delegation received and reviewed the PAD and agreed on the document contents. The revised PAD, dated August 9, 2012, is attached as Annex 2 to these minutes. 21. Operational Manual and Procurement Plan. A draft Operational Manual, and Procurement Plans for each Participating University were submitted to the Bank prior to negotiations and reviewed accordingly. The Bank deemed all documents acceptable. 22. Board date for the Project. The Bank s team ratified to the Borrower s delegation that the proposed Project is currently expected to be presented to the Bank s Board of Directors on September 27, Acceptance of Project Documents. The Borrower s delegation, by signing these Minutes, confirms its acceptance of their content, the Loan Agreement and the Disbursement Letter. 24. Access to information. The Bank informed the Borrower that, pursuant to the World Bank Policy on Access to Information, dated July 1, 2010, the Bank will disclose the PAD, the Loan Agreement and other related documents, including any supplemental letters. The Borrower s delegation confirmed that the Bank may publicly release the PAD before approval of the operation by the Bank s Board of Executive Directors. 25. Next steps. The Bank informed the Borrower that in order to present the proposed Loan to the Bank s Board, the signature of the expert appointed by Costa Rica in the Report of the Statutory Committee is required. The Borrower informed the Bank that it will appoint an expert to sign the Statutory Committee Report and send the corresponding authorization to the Bank by August 17, Annexes to the Agreed Minutes of Negotiations 1. Loan Agreement, negotiated version. 2. Project Appraisal Document, negotiated version. 3. Disbursement Letter, negotiated version. 4. The Borrower s Loan Choices Worksheet.

5 Melvin Quirós Romero Under-Director of Public Credit Ministry of Finance Republic of Costa Rica Marcelo Becerra Human Development Department Latin America and the Caribbean Region World Bank Juan Carlos Pacheco Romero Vice-Minister Ministry of Finance Henning Jensen Pennington Universidad de Costa Rica Leonardo Garnier Rímolo Minister Ministry of Public Education Julio Calvo Alvarado Instituto Tecnológico de Costa Rica Keilor Rojas Jimenez Vice-Minister Ministry of Science and Technology Sandra León Coto a Universidad Nacional Roberto Gallardo Núñez Minister Ministry of National Planning and Economic Policy Luis Guillermo Carpio Malavasi Universidad Estatal a Distancia