(Agricultural Services and Institutional Development Project) between THE ARGENTINE REPUBLIC. and

Transcription

1 Public Disclosure Authorized CONFORMED COPY LOAN NUMBER 3297 AR Public Disclosure Authorized (Agricultural Services and Institutional Development Project) between Public Disclosure Authorized THE ARGENTINE REPUBLIC and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated August 13, 1991 LOAN AGREEMENT LOAN NUMBER 3297 AR Public Disclosure Authorized AGREEMENT, dated August 13, 1991, between THE ARGENTINE REPUBLIC (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 contract from the Inter-American Development Bank (IDB) a loan (the IDB Loan) in an amount equivalent to at least thirty million dollars ($30,000,000) to assist in financing the Project on the terms and conditions set forth in an agreement (the IDB Loan Agreement) to be entered into between the Borrower and IDB; and 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

2 General Conditions; Definitions Section The "General Conditions Applicable to Loan and Guarantee Agreements" of the Bank, dated January 1, 1985, with the last sentence of Section 3.02 deleted (the General Conditions) constitute an integral part of this Agreement. Section 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) "BNA" means Banco de la Nacion Argentina, the Bank of the Argentine Nation of the Borrower; (b) "CCMU" means the central coordination and management unit to be established within SSAGyP (as hereinafter defined) pursuant to Section 6.01 (e) of this Agreement; (c) Agreement; "EPF" means the export promotion fund referred to in Section 3.09 of this (d) "ETU" means the epidemiology and training unit within SENASA referred to in Section 3.03 of this Agreement; (e) "FBNA" means Fundacion Banco de la Nacion Argentina, the non-profit foundation established and maintained by BNA; (f) "INTA" means Instituto Nacional de Tecnologia Agropecuaria, the National Institute for Agricultural Technology of the Borrower; (g) "INIDP" means Instituto Nacional de Investigacion y Desarrollo Pesquero, the National Fisheries Research and Development Institute of the Borrower; (h) Borrower; "JNC" means Junta Nacional de Carnes, the National Meat Board of the (i) "NDF" means Direccion Nacional de Pesca Maritima, the National Directorate of Maritime Fisheries of SSAGyP; (j) and SENASA; "Participating Agencies" means collectively BNA, FBNA, INTA, INIDP, JNC (k) "PMU" means each of the temporary project management units to be established in accordance with Section 3.04 of this Agreement; (l) "Project Preparation Advance" means the project preparation advance granted by the Bank to the Borrower pursuant to an exchange of letters dated March 18, 1988 and May 4, 1988 between the Borrower and the Bank; (m) "PPS" means Direccion Nacional de Comercializacion y Fiscalizacion Agricola, the Plan Protection Service of SSAGyP; (n) Borrower; "Province" means one of the Provinces, a political sub-division of the (o) "SENASA" means Servicio Nacional de Sanidad Animal, the National Animal Health Service of the Borrower; (p) SSAGyP; "SENASE" means Servicio Nacional de Semillas, the National Seed Service of (q) "SELSA" means Direccion Nacional de Luchas Sanitarias, the Animal Disease Control Field Service of SENASA; (r) "SNEySR" means Servicio Nacional de Economia y Sociologia Rural, the National Economics and Rural Sociology Service of SSAGyP; (s) "SOP" means the statement of policy of each Participating Agency, satisfactory to the Bank, referred to in Sections 3.01 (b) and 3.12 of this Agreement; (t) "Special Account" means the account referred to in Section 2.02 (b) of

3 this Agreement; (u) "SSAGyP" means Subsecretaria de Agricultura, Ganaderia y Pesca, the Subsecretariat of Agriculture, Livestock and Fisheries of the Borrower; (v) "SSIC" means Subsecretaria de Industria y Comercio, the Subsecretariat of Industry and Commerce of the Borrower; and (w) "Subsidiary Loan Agreements" means the agreements to be entered into between the Borrower and INTA, INIDP and SENASA pursuant to Section 3.01 (b) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to each of the Subsidiary Loan Agreements. ARTICLE II The Loan Section 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 thirty three million five hundred thousand dollars ($33,500,000), 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 (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 expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement 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 deposit account in its Central Bank on terms and conditions satisfactory to the Bank. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 5 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 The Closing Date shall be June 30, 1998 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 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 (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. "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,

4 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), (b) 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 Interest and other charges shall be payable semiannually on March 15 and September 15 in each year. Section 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 (a) 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 through SSAGyP with the assistance of SSIC and the Participating Agencies as described in the Annex to Schedule 2 to this Agreement, with due diligence and efficiency and in conformity with appropriate administrative, financial and engineering practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. (b) The Borrower shall onlend part of the proceeds of the Loan to INTA, INIDP and SENASA, for purposes of carrying out Parts F, D and A of the Project, respectively, under Subsidiary Loan Agreements, satisfactory to the Bank, to be entered into between the Borrower, through SSAGyP, and INTA, INIDP and SENASA, respectively, such Subsidiary Loan Agreements to include, inter alia, the obligation of SSAGyP, INTA, INIDP and SENASA to carry out their activities in accordance with each respective SOP. (c) The Borrower shall exercise its rights under any of the Subsidiary Loan Agreements in such manner as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan and, except as the Bank shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive any of the Subsidiary Loan Agreements or any provision thereof. (d) The Borrower shall take all action necessary to enable INTA, INIDP and SENASA to carry out their obligations under the Subsidiary Loan Agreements, including, but not limited to, the obligation to repay their respective loans. Section Except as the Bank shall otherwise agree, procurement of the goods, works and consultants services required for the Project and to be financed out of the proceeds of the Loan shall be governed by the provisions of Schedule 4 to this Agreement. Section In order to assist SENASA in carrying out of Part A of the Project, the Borrower shall cause SENASA to maintain a planning unit and an

5 epidemiology and training unit (ETU), with staff and functions satisfactory to the Bank. Section The Borrower shall establish within PPS and SNERySR and thereafter maintain, and shall cause SENASA, INTA, JNC and INIDP to establish and thereafter maintain, a project management unit (PMU), with staff and functions satisfactory to the Bank. Section The Borrower shall, through SSAGyP, enter into an agreement, satisfactory to the Bank, with BNA and FBNA, for the purposes of setting up the responsibilities of each of the parties and of SSIC in the carrying out of Part H of the Project, and, except as the Bank shall otherwise agree, shall not assign, amend, abrogate or waive such agreement or any provision thereof. Section The Borrower shall cause SSAGyP to: (i) maintain a central coordination and management unit (CCMU), with staff and functions satisfactory to the Bank, such unit to be responsible for the coordination of the carrying out of the Project; and establish and thereafter maintain a project advisory committee (PAC), to be headed by the subsecretary of SSAGyP and to meet at least three times during any specific calendar year, the first meeting to take place not later than ninety days after the Effective Date, such PAC to be responsible, inter alia, for resolving the problems related to the coordination of the carrying out of the Project among SSAGyP, SSIC and the Participating Agencies. Section The Borrower shall cause, through SSAGyP: (i) each of the Participating Agencies to prepare and present to CCMU, by not later than October 30 of each year, until the Project has been completed, an annual operating plan in form satisfactory to the Bank; and CCMU to present to the Bank, by not later than November 30 of each year, any such plan, and to review with the Bank, and to revise in agreement with the Bank, if necessary, by not later than June 30 of each year, any such plan. Section The Borrower shall, without limitation to its obligations under Article IX of the General Conditions: (i) by not later than August 31 and February 28 of each year, beginning in 1991, prepare and present to the Bank a report, satisfactory to the Bank, on the progress achieved in the carrying out of the Project during the calendar semester immediately preceding; and by not later than June 30, 1993 and June 30, 1997, prepare and present to the Bank a report, satisfactory to the Bank, on the progress achieved in the carrying out of the Project up to that respective date; such reports to include, inter alia, the progress achieved in meeting the performance targets referred to in Annex II to Schedule 2 to this Agreement. Section The Borrower shall, for the purposes of carrying out Part H of the Project, and until the Project has been completed, maintain an export promotion fund (EPF), under terms and conditions satisfactory to the Bank. Section The Borrower shall, through SSAGyP, make available to the Provinces and to either federal or provincial entities in the public or private sector, the information collected and analyzed under Part G (iii) of the Project. Section The Borrower shall: (a) establish and thereafter maintain a system for the generation of revenues for SSAGyP, satisfactory to the Bank, which shall allow SSAGyP to cover its financial needs to service the disbursements made under the Loan and the IDB Loan for the carrying out of the activities described in Parts B and C of the Project; (b) cause SENASA, INTA, INDIP and JNC to establish and thereafter maintain a system for the generation of revenues for such entities, satisfactory to the Bank, which shall allow any such entity to cover its respective financial needs to service the Loan and the IDB Loan; (c) review with the Bank, by not later than November 30 of each year, starting on November 30, 1991, the effectiveness of such system; and (d) by not later than January 1 of the year following any such review, take all actions necessary to implement the changes in the system as agreed between the Borrower and the Bank.

6 Section The Borrower shall cause JNC to carry out its activities in accordance with a statement of policy satisfactory to the Bank. ARTICLE IV Financial Covenants Section (a) The Borrower shall maintain or cause to be maintained separate records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of the Project of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) The Borrower shall: (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 acceptable to the Bank; furnish to the Bank as soon as available, but in any case not later than six 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) (iii) maintain or cause to be maintained, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; 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 was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; 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. ARTICLE V Remedies of the Bank Section Pursuant to Section 6.02 (k) of the General Conditions, the following additional events are specified, provided, however, that if the event specified in paragraph (c) below shall have occurred and be continuing, the suspension of the Borrower s right to make withdrawals from the Loan Account may be limited by the Bank to withdrawals in respect of the Project expenditures related to the Participating Agency affected by such event: (a) The IDB Loan Agreement shall have failed to become effective by six months after the Effective Date, or such later date as the Bank may agree; provided, however, that the provisions of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Bank that adequate funds for the Project are available to the Borrower from other sources on terms and conditions consistent with the obligations of the Borrower under this Agreement.

7 (b) (i) Subject to subparagraph of this paragraph: (A) (B) the right of the Borrower to withdraw the proceeds of any grant or loan made to the Borrower for the financing of the Project shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing therefor, or any such loan shall have become due and payable prior to the agreed maturity thereof. Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Bank that: (A) such suspension, cancellation, termination or prematuring is not caused by the failure of the Borrower to perform any of its obligations under such agreement; and (B) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consistent with the obligations of the Borrower under this Agreement. (c) INTA or INDIP or SENASA shall have failed to perform any of its obligations under each respective Subsidiary Loan Agreement. (d) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment or the suspension of the operations of any Participating Agency. Section Pursuant to Section 7.01 (h) of the General Conditions, the following additional events are specified: (a) the event specified in paragraph (a) or (d) of Section 5.01 of this Agreement shall occur; (b) the event specified in paragraph (b) (i) (B) of Section 5.01 of this Agreement shall occur, subject to the proviso of paragraph (d) of that Section; and (c) the event specified in paragraph (c) of Section 5.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower. ARTICLE VI Effective Date; Termination Section The following events are specified as additional conditions to the effectiveness of the Loan Agreement within the meaning of Section (c) of the General Conditions: (a) the Subsidiary Loan Agreements have been executed on behalf of the Borrower, through SSAGyP, and INTA, INIDP and SENASA, respectively; (b) the agreement referred to in Section 3.05 of this Agreement has been executed on behalf of the Borrower, through SSAGyP, and BNA and FBNA; (c) EPF has been established and the executive director and the technical director responsible for the administration of the activities under Part H of the Project have been hired by SSAGyP, under terms and conditions satisfactory to the Bank; Bank; (d) (e) the IDB has approved the IDB Loan; CCMU has been established and has been staffed, to the satisfaction of the (f) all actions have been taken by the Borrower in order to permit the procurement of goods, works and services to be financed out of the proceeds of the Loan in accordance with the provisions set forth or referred to in this Agreement; and (g) JNC has adopted an SOP satisfactory to the Bank. Section The following are specified as additional matters, within the

8 meaning of Section (c) of the General Conditions, to be included in the opinion or opinions to be furnished to the Bank: (a) that each of the Subsidiary Loan Agreements has been duly authorized or ratified by INTA, INIDP and SENASA, respectively, and is legally binding upon the Borrower and INTA, INIDP and SENASA, respectively, in accordance with its terms; (b) that the actions referred to in paragraph (f) of Section 6.01 of this Agreement have been taken; (c) that the agreement referred to in paragraph (b) of Section 6.01 of this Agreement has been duly authorized or ratified by all parties thereto, and is legally binding upon the Borrower and BNA and FBNA in accordance with its terms; (d) that EPF and CCMU have been duly established; and (e) that the SOP referred to in Section 6.01 (g) of this Agreement has been duly adopted by JNC. Section The date November 12, 1991 is hereby specified for the purposes of Section of the General Conditions. ARTICLE VII Representative of the Borrower; Addresses Section The Minister of Economy of the Borrower is designated as representative of the Borrower for the purposes of Section of the General Conditions. Section The following addresses are specified for the purposes of Section of the General Conditions: For the Borrower: Ministerio de Economia Hipolito Yrigoyen 250 Buenos Aires, Argentina Cable address: Telex: For the Bank: MINISTERIO ECONOMaA BAIRES International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C United States of America Cable address: INTBAFRAD Washington, D.C. Telex: (TRT) (RCA) (WUI) or (FTCC) IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have caused this Agreement to be signed in their respective names in Buenos Aires, Argentina, as of the day and year first above written. THE ARGENTINE REPUBLIC By /s/ Domingo Cavallo

9 Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Shahid Husain Regional Vice President Latin America and the Caribbean 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: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil works, 4,600, %, net of taxes except for expenditures incurred by SENASA (2) Laboratory 4,900, %, net of taxes equipment, except for expenditures incurred by SENASA (3) Vehicles 4,900, %, net of taxes (4) Consultants 5,400, %, net of taxes and Auditors services (5) Studies 1,000, %, net of taxes (6) Training 1,300, %, net of taxes (7) Recurrent 9,107, %, (net of costs taxes) up to an aggregate amount of $2,000,000; 80% up to an aggregate amount of $4,000,000; 60% up to an aggregate amount of $6,000,000; 40% up to an aggregate amount of $8,000,000 and 20% of such costs thereafter (8) Expenditures 1,800, % of dismade by EPF bursements made under Part H by EPF

10 of the Project (9) Refunding of 492,500 Amount due pur- Project Prepara- suant to Section tion Advance 2.02 (c) of this Agreement TOTAL 33,500, For the purposes of this Schedule, the term "recurrent costs" means payments made for incremental operating costs, to the extent that such costs are incurred for purposes of the Project. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of $1,500,000, may be made on account of payments made for expenditures before that date but after May 1, 1990; (b) payments made for expenditures under: (i) Part B of the Project, unless the Bank has received signed agreements entered into between the Borrower and each of the Provinces which shall participate in the respective campaigns and that the Borrower has taken all measures necessary to make available to SSAGyP the funds collected by SSAGyP for its phytosanitary services, to the satisfaction of the Bank; (iii) Part D (v) of the Project, unless INIDP has acquired the effective possession of the lands necessary for the construction of the facilities referred to in such Part of the Project, to the satisfaction of the Bank; and Part D (i) of the Project, unless the Borrower has put into effect mechanisms, satisfactory to the Bank, to ensure to INIDP the possibility of recovering its costs related to its fishery resource monitoring activities through a system of fishing permits; (c) SSAGyP: payments for expenditures made by the Borrower, through SSAGyP, unless (i) (iii) has adopted a cost accounting system and a standard chart of accounts for its PPS activities, satisfactory to the Bank; has established and staffed two PMUs, one within PPS and another within SNEySR, and has appointed their coordinators, to the satisfaction of the Bank; has presented to the Bank, for its review, the tender documents for the procurement of the civil works, goods and services referred to in Part A and in paragraph 1 of Part B of Schedule 4 to this Agreement for the first year of the execution of the Project; and (iv) has adopted mechanisms, satisfactory to the Bank, to recover the costs of the activities related to the Project carried out by PPS and SENASE, in order to achieve the objectives stated in its SOP. (d) entity: payments for expenditures made by SENASA, INTA or INIDP, unless any such (i) has adopted a cost accounting system (an accounting system in the case of INIDP), and a standard chart of accounts, satisfactory to the Bank, provided, however, that they shall cover only the wool laboratory analysis activities in the case of INTA; has established and staffed a PMU and has appointed its coordinator, to the satisfaction of the Bank;

11 (iii) has presented to the Bank, for its review, the tender documents for the procurement of the civil works, goods and services referred to in Part A and in paragraph 1 of Part B of Schedule 4 to this Agreement for the first year of the execution of the Project; and (iv) has adopted mechanisms, satisfactory to the Bank, to recover their costs related to the Project, in order to achieve the objectives stated in their respective SOP; (e) payments for expenditures made by JNC; and (f) payments for expenditures for goods or works supplied under a contract which any national or international financing institution or agency other than the Bank shall have financed or agreed to finance. SCHEDULE 2 Description of the Project The objectives of the Project are to improve the Borrower s capability to develop an effective system for the export of agricultural products and to coordinate more effectively with the Provinces the provision of agricultural services. The Project 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: Animal Health Services (i) strengthening of SENASA s central services through the establishment and staffing of ETU and PMU and the provision of training and the acquisition and utilization of equipment; strengthening of SELSA s field services, through the provision of training and the acquisition and utilization of equipment and vehicles, and carrying out of specific disease control campaigns by SELSA; (iii) constructing and equipping a central veterinary laboratory on the grounds of INTA s Castelar Station, and providing training and technical assistance for the staff at such veterinary laboratory; and (iv) constructing and equipping a medium-security animal quarantine station at Ezeiza s Airport, in Buenos Aires. Part B: Phytosanitary Services (i) constructing, equipping and staffing a central quarantine station and diagnostic laboratory in Buenos Aires, and providing training for the staff at such laboratory; (iii) (iv) constructing and equipping small office facilities for PPS and acquisition and utilization of equipment and vehicles for PPS; remodelling of an existing laboratory building in Buenos Aires and constructing, equipping and staffing one new regional laboratory for pesticide residue analysis in the province of Tucuman, and providing training for the staff at such regional laboratory; and carrying out of phytosanitary barriers and disease prevention campaigns by PPS. Part C: Seeds Strengthening of SENASE s capabilities in the certification and registration of seeds, provision of technical assistance and training and acquisition and utilization of equipment for such purposes. Part D: Fisheries

12 Strengthening of the Borrower s fishery sector to expand the industry and exploit the Borrower s southern continental shelf, ensuring that populations of the main economic species are sustained at productive levels, through: (i) (iii) (iv) setting up of a program in INIDP to monitor fisheries resources and determine maximum sustainable fish catches for the main commercial species, including the acquisition and utilization of fishing and scientific equipment; reorganizing NDF in order to improve its capacity in strategic planning, control and support to the private sector; restructuring INIDP; establishing the requirement of fishery licensing in order to cover the costs of fisheries research; and (v) constructing and equipping two aquaculture centers for INIDP, one in Bariloche and another in Corrientes. Part E: Meat Marketing Strengthening of JNC s capabilities in promoting meat exports, vacuum-packed meats and substitute meat products, in changing its meat classification system and in analyzing financial aspects of the meat market through the carrying out of studies and the provision of technical assistance and the acquisition and utilization of equipment and materials to aid in promotional activities. Part F: Research Activities (i) (iii) expanding of INTA s wool technology laboratory at Bariloche and constructing and staffing a satellite, provincial laboratory at Rawson, including the acquisition and utilization of laboratory and computing equipment and the provision of training; supporting INTA s biotechnology research capacity through remodelling of laboratories at Castelar, including the acquisition and utilization of laboratory, administrative and computing equipment, furniture and vehicles; supporting five research groups working on post harvest technology of fruit and vegetable products at existing INTA research stations in the main production areas through the acquisition and utilization of equipment, supplies and vehicles, provision of training and construction of small warehouses and one small laboratory; and (iv) development of techniques to improve forest plantation management and varieties at INTA s Concordia Station in Mesopotamia, through the construction of research facilities, the acquisition and utilization of laboratory and office equipment, vehicles and one boat and the provision of training. Part G: Information System Strengthening of SSAGyP s information systems to link existing independent sources in order to produce consistent and regular information flows, through: (i) assisting the technical units within SSAGyP in the collection and processing of information via informatics; (iii) (iv) (v) assisting decentralized institutions in the provision and coordination of information flows; collecting and analyzing basic statistical information on the agricultural sector; establishing a central repository for aggregated information in SNEySR; and establishing a central support unit to assist other units of

13 SSAGyP in their use of informatics. Part H: Non-Traditional Export Promotion Scheme (i) establishment of mechanisms to exchange specialized information on production, processing and marketing related to non-traditional agricultural products through seminars, publications and overseas visits; and provision, through EPF, of financial resources for exporters or groups of exporters for (a) data searches; (b) preparation of feasibility studies; (c) provision of technical advice; (d) making pilot shipments to test markets; and (e) monitoring of such pilot shipments. Part I: Institutional Development of SSAGyP Strengthening of the institutional and administrative capabilities of SSAGyP in providing agricultural services, including, inter alia, SSAGyP s procurement capabilities and the strengthening of CCMU. * * * * The Project is expected to be completed by December 31, ANNEX I TO SCHEDULE 2 Agencies Executing the Project Part of the Project A B C D E F G H I Agencies SENASA SSAGyP SSAGyP SSAGyP and INIDP JNC INTA SSAGyP SSIC, SSAGyP, BNA and FBNA SSAGyP SCHEDULE 3 Amortization Schedule Date Payment Due Payment of Principal (expressed in dollars)* On each September 15 and March 15 beginning September 15, 1996 through September 15, ,395,000 On March 15, ,415,000

14 * The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal. See General Conditions, Sections 3.04 and 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: Time of Prepayment Premium The interest rate (expressed as a to percentage per annum) applicable 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 eleven years before maturity More than eleven years but not 0.88 more than fifteen years before maturity More than fifteen years before 1.00 maturity Section I. Procurement of Goods and Works SCHEDULE 4 Procurement and Consultants Services Part A: International Competitive Bidding 1. Except as provided in Part B hereof, goods and works 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 1985 (the Guidelines), and through the use of bidding documents, satisfactory to the Bank, which shall be consistent with the "Sample Bidding Documents: Procurement of Goods", published by the Bank in March 1986 and the "Sample Bidding Documents: Procurement of Works", published by the Bank in September 1985.

15 2. To the extent practicable, contracts for laboratory, computing and telecommunication equipments shall be grouped into bid packages estimated to cost the equivalent of $300,000 or more. Part B: Other Procurement Procedures 1. Civil works estimated to cost the equivalent of less than $2,000,000 per contract and goods, except vehicles, estimated to cost the equivalent of less than $250,000 but more than $25,000 per contract may be procured under contracts awarded on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Bank, such procedures to include, inter alia, that: (i) foreign contractors shall be allowed to bid for all contracts; a minimum of thirty (30) calendar days shall be allowed between the publication of the last advertisement and the opening of the bids; (iii) each bidding shall be advertised in a national newspaper for at least three days; and (iv) bidders shall be allowed to submit bids by certified mail. 2. Goods, except vehicles, estimated to cost the equivalent of $25,000 or less per contract may be procured under contracts awarded on the basis of comparison of price quotations obtained from at least three suppliers, in accordance with procedures acceptable to the Bank. Part C: Review by the Bank of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to all contracts for civil works and vehicles and the first two contracts for goods to be procured under the procedures set forth or referred to in paragraphs B.1 and B.2 of this Schedule, respectively, the procedures set forth in paragraphs 2 and 4 of Appendix 1 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 1 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 5 to this Agreement. (c) The provisions of the preceding subparagraph (b) shall not apply to contracts on account of which the Bank has authorized withdrawals on the basis of statements of expenditure. Section II. Employment of Consultants In order to assist the Borrower in carrying out Parts F, G, H and I 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 For the purposes of this Schedule: SCHEDULE 5 Special Account (a) the term "eligible Categories" means the Categories (except Category (9)) 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

16 (c) the term "Authorized Allocation" means an amount equivalent to $2,000,000 to be withdrawn from the Loan Account and deposited into 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. 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 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,

17 as the case 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.