Dominican Republic: HIV/AIDS Prevention And Control Project (Loan 7065-DO) Proposed Amendment to the Loan Agreement

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Dominican Republic: HIV/AIDS Prevention And Control Project (Loan 7065-DO) Proposed Amendment to the Loan Agreement 1. This memorandum seeks the approval of the Executive Directors to amend the Loan Agreement for the HIV/AIDS Prevention And Control Project. The proposed amendment is in response to a request from the Government of the Dominican Republic (GODR), on behalf of the Dominican Republic (the Borrower), dated May 28,2004, to permit the reallocation of loan proceeds to help rehabilitate the health care infrastructure in the Jimani region, located in the border area with Haiti, that was severely affected by devastating floods in May BACKGROUND 2. A Loan in the amount of US$25 million for the Dominican Republic HIV/AIDS Prevention and Control Project, part of the first phase of the Multi Country HIVIAIDS Prevention and Control Adaptable Program Lending (APL) for the Caribbean Region, was approved by the Board of Directors on June 28, The objectives of the Project are to assist GODR in curbing the spread of HIV/AIDS through the scaling up of programs and activities targeted to high-risk groups, expanding awareness about HIV/AIDS among the general population, and strengthening institutional capacity to ensure the effectiveness and sustainability o f the effort. 3. Project implementation is progressing satisfactorily. Since February 2002, when the Loan Agreement became effective, the project has supported GODR's efforts to put in place the necessary building blocks for the implementation of a comprehensive and multisectoral strategy against HIV/AIDS. PROPOSED AMENDMENT AND RATIONALE 4. The proposed amendment would incorporate the necessary legal provisions, including the expansion of the Project's breadth of activity to finance the rehabilitation and re-equipping o f the health care infrastructure in the Jimani region, and the creation o f a new category of disbursements to accommodate the above mentioned reallocation of US$200,000 as requested. 5. The proposed amendments are consistent with the overall objectives of the Project and can be implemented within its structure. In addition, they are justified in view of the emergency situation in the Jimani Region, one of the poorest in the country, that is hindering the access to basic health services, including HIV/AIDS prevention and control Borrower (Technical Secretariat of the Presidency and Health Secretariat) and the implementing agency (COPRESIDA), and have been agreed upon. 7. A copy o f the draft Amendment Letter is available upon request.

2 The World Bank INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H Street Washington, DC USA June 30,2004 Senderphone SenderFax His Excellency Carlos Despradel Secretario TCcnico de la Presidencia Secretariado TCcnico de la Presidencia Palacio Nacional Avenida MCxico Santo Domingo, Rephblica Dominicana Re: Loan No.7065-DO (HIV/AIDS Prevention and Control Project) Second Amendment to the Loan Aneement Excellency: Please refer to the Loan Agreement between the Dominican Republic (the Borrower) and the International Bank for Reconstruction and Development (the Bank) dated June 29, 2001 with regard to the above-captioned Project (the Loan Agreement). We are pleased to inform you that, pursuant to your letter of request dated May 28, 2004 and our recent discussions on the subject, the Bank hereby agrees to amend the Loan Agreement so as to incorporate appropriate provisions to help the Borrower address the natural disaster emergency situation which recently took place in the Jimani region. Consequently, the Loan Agreement is hereby amended as follows: 1. Section Paragraph (g) is hereby amended and replaced to read in its entirety as follows: (g) Eligible Categories means Categories (1) through (6) and Category (10) set forth in the table in Part A.l of Schedule 1 to this Agreement; 2. Section A new definition is hereby incorporated to read as follows: (w) Emergency Projects means projects consisting of the provision of the necessary goods, works and services for the rehabilitation of the Borrower s health facilities in the Jimani region, including: rehabilitation of physical infrastructure; provision of medical equipment; water purification and the strengthening of the biomedical waste management capacity. 3, Schedule 1. The table in paragraph A. 1 of Schedule 1 is hereby amended and replaced to read in its entirety as set forth in Annex 1 to this Amendment Letter. 4. Schedule 2. The first paragraph is hereby amended and replaced to read in its entirety as follows: The objective of the Project is to assist the Borrower in: (a) reducing the spread of the HIV/AIDS epidemic through: (i) the increase in health prevention and control programs targeted in particular to high risk groups of population; (ii) the expansion of awareness with respect to

3 -L - HIV/AIDS infection and prevention amongst the Borrower s population; and (iii) the strengthening of the institutional capacity of the Participating Entities and the Participating Agencies to ensure the effectiveness and the sustainability of the Project; and (b) carrying out Emergency Projects. 5. Schedule 2. A new Part D is hereby incorporated to read in its entirety as follows: Part D: Emergency Subproi ec ts Carrying out of Emergency Subprojects 6. Schedule 4, Section I. Paragraph C.2. is hereby amended and replaced to read in its entirety as follows: Shopping Goods (other than the anti-retroviral drug and the baby formula supplements referred to in Part A.4 (a) and (c) of the Project, respectively, anti-tuberculosis drugs, vaccines and condoms) estimated to cost less than $200,000 equivalent per contract, up to an aggregate amount not to exceed $2,790,000 equivalent, may be procured under contracts awarded on the basis of international or national shopping procedures, at the Borrower s option, in accordance with the provisions of paragraphs 3.5 and 3.6 of the Guidelines. 7. Schedule 4, Section I. A new Part C.5 is hereby incorporated to read in its entirety as follows: Direct Contracting Works under Emergency Subprojects estimated to cost less than $5,000 equivalent per contract and goods under Emergency Subprojects estimated to cost less than $20,000 equivalent per contract, which the Bank agrees meet the requirements for Direct Contracting may be procured in accordance with the provisions of said procurement method. 8. Schedule 4, Section I, Part D 1. (a) is hereby amended to read in its entirety as follows: Prior Review (a) With respect to: (i) each contract for goods to be awarded under Parts B.l and C.3 of this Section; (ii) each contract for goods to be awarded under Part C.2 of this section (iv) each contract for goods and works to be awarded under Part C.5 of this Section; and (v) the first two contracts for works to be awarded under Part C.l (b) of this Section, the procedures set forth in paragraphs 2 and 3 of Appendix 1 to the Guidelines shall apply. Please confirm your agreement with the foregoing amendment by signing and dating this letter in the spaces provided below. This amendment letter shall be executed in two counterparts each of which shall be an original.

4 -3 - Upon confirmation, please return one fully executed original to us. The provisions set forth in this amendment letter shall become effective as of the date of this letter upon receipt by the Bank of one fully executed original of this amendment letter. Very truly yours, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT BY Caroline Anstey Director Caribbean Country Management Unit Latin America and the Caribbean Region AGREED: DOMINICAN REPUBLIC By: Name: Date:

5 -4 - Annex 1 Amount of the % of Loan Allocated Expenditures Category (Exmessed in Dollars) to be Financed (1) Works 1,500,000 85% Goods (other than the anti-retroviral drug and baby formula supplements under Part A.4 (a) and (c) of the Project, respectively, anti-tuberculosis drugs, vaccines, condoms and nondurable goods) (3) Vaccines, antituberculosis drugs and condoms (4) Consultants' services 4,606,000 3,334,000 75% 80% until disbursements under this Category have reached an amount of $2,500,000; and 50% thereafter (a) (b) Information, Educational 1,840,000 and Communication Programs Other services under the 7,800,000 Project 80% 100% (5) Training 1,840,000 (6) Project Administration costs 2,o 0 0,o 0 0 (7) Fee 250,000 75% 80% until disbursements under this Category have reached an amount of $1,000,000; and 50% thereafter Amount due under Section 2.04'of this Agreement

6 -5 - Category Premia for Interest Rate Caps and Interest Rate Collars Unallocated Amount of the Loan Allocated {Expressed in Dollars) 0 1,630,000 % of Expenditures to be Financed Amount due under Section 2.09 (d) of this Agreement Goods, works and consultants services under Emergengcy Projects 200,000 85% TOTAL 25,000,000