CONFORMED COPY Public Disclosure Authorized LOAN NUMBER 1281 PE. LOAN AGREEMENT (Centromln Expansion Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and EMPRESA MINERA DEL CENTRO DEL PERU Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Dated December 6, 1976
LOAN AGREEMENT AGREEMENT, dated December 6, 1976, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and EMPRESA MINERA DEL CENTRO DEL PERU (hereinafter called the Borrower).
- 2 - ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditionc Applicable to Loan and Guarantee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Eresa Minera del Centro del Peru" means Empresa Minera del Centro del Peru or any successor thereto; (b) "Ley Orgnica" means Ley Orggnica de ll Empresa Minera del Centro del Per6, establishing and organizing the Borrower, set forth in Decreto-Ley No. 21117 of the Guarantor, dated March 18, 1975, as amended from time to time; (c) "Estatutos" means the estatutos of the Borrower set forth in Decreto Supremo No. 025-76-EM/SD of the Guarantor, dated May 20, 1976, as amended from time to time;
-3- (d) "Stage I Expansion Program" means the Borrower's 1975-1981 investment program, approved by Resoluci6n No. 141-76 of January 23, 1976 of the Directorio of the Borrower, as this program may be updated from time to time, and consisting of: (i) the expansion of the Cobriza mine to increase the production of copper concentrate from 50,000 to 223,000 short-tons per year; (ii) construction of a mine water treatment plant at Cerro de Pasco to produce 7,000 short-tons per year of copper and reduce river pollution; (iii) modernization and expansion of the La Oroya zinc refinery from 76,000 to 99,000 short-tons per year; (iv) construction of a lead sinter plant at La Oroya to produce 104,000 short-tons of lead per year; (v) modernization and expansion of the La Oroya copper smelter/refinery to increase refined copper output from 60,000 to 80,000 short-tons per year; and (vi) expansion of the Casapalca mine to increase ore output from 630,000 to 875,000 short-tons per year; (e) "Housing Program" means the Borrower's housing program described in letter from the Borrower to the Bank dated May 17, 1976, as such program may be amended from time to time, consisting of: (i) construction of houses for personnel; (ii) extension of social and community facilities such as hospitals, schools and sport complexes; and (iii) installation of water and sanitary services; (f) "IDB" means Inter-American Development Bank; and (g) "IDB Loen" means the loan of thirty-five million four hundred thousand dollars ($35,400,000) equivalent made or to be made by IDB to the Borrower for purposes of the Project, and "IDB Loan Agreement" means the agreement providing for the IDB Loan.
ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to forty million dollars ($4o,oo,oo). Section 2.02. (a) The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Bank and the Borrower, 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 and to be financed out of the proceeds of the Loan and in respect of interest and other charges on the Loan. (b) On each of the semi-annual interest payment dates specified in Section 2.07 of this Agreement, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and pay to itself the amounts required to pay, on such date, interest and other charges on the Loan accrued and payable on or before the date set forth, and up to the amount allocated, in Schedule 1 to this Agreement, as such schedule may be amended from time to time. Section 2.03. Except as the Bank shall otherwise agree, the goods, works and services (other than consultants' services) for the Project to be financed out of the proceeds of the Loan, shall be procured in accordance with the provisions of Schedule 4 to this Agreement.
Section 2.04. The Closing Date shall be December 31, 1980 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower and the Guarantor of such later date. Section 2.05. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.06. The Borrower shall pay interest at the rate of eight and one-half per cent (8-1/2%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semi-annually on May 1 and November 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. Section 2.09. The Borrower shall pay to the Guarantor the guarantee fee referred to in Section 3.04 of the Guarantee Agreement when due.
- 6 - ARTICLE III Execution of the Project Section 3.01. The Borrower shall carry out the Project with due diligence and efficiency and in conformity with appropriate engineering, business, financial and administrative practices and shall take all action necessary or required by it to obtain, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. In order to assist the Borrower in the supervision and coordination of the carrying out of the Project and the Stage I Expansion Program, the Borrower shall: (a) establish and maintain an Expansion Management Unit; (b) by July 31, 1976 or such later date as shall be established by the Bank, employ in the Expansion Management Unit: (i) a manager of the Expansion Management Unit; (ii) a project manager for each of the subprojects included in the Stage I Expansion Program; (iii) such technicians experienced in the execution of mining projects as shall be necessary to assist the managers mentioned in (i) and (ii) above and to carry out on-the-job training of the Borrower's staff;
(iv) the qualifications, experience and terms and conditions of employment of the managers and technicians referred to in (i), (ii) and (iii) above shall be satisfactory to the Bank. (c) provide the Expansion Management Unit, promptly as needed, with such supporting staff, facilities, funds and other resources as shall be re.quired for the efficient operation thereof. Section 3.03. In order to assist the Borrower in the preparation of engineering for the Project, the provision of procurement services for the Project and the supervision of the carrying out of the Project, the Borrower shall employ engineering consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. Section 3.04. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) Except as the Bank shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Loan to be used exclusively for the Project. Section 3.05. (a) The Borrower shall furnish to the Bank, promptly upon their preparation, the plans, specifications, contract
-8- documents and construction and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) The Brrower: (i) shall maintain records adequate to record the progress of the Project (including the cost thereof) and to identify the goods, works and services financed out of the proceeds of the Loan, and to disclose the use thereof in the Project; (ii) shall, without limitation upon the provisions of paragraph (c) of this Section, enable the Bank's representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Loan and any relevant records and documents; and (iii) shall furnish to the Bank all such information as the Bank shall reasonably request concerning the Project, the Stage I Expansion Program, the expenditure of the proceeds of the Loan and the goods, works and services financed out of such proceeds. (c) The Borrower shall enable the Bank's representatives to examine all plants, installations, sites, works, buildings, property and equipment of the Borrower and any relevant records and documents. Section 3.06. The Borrower shall take all such action as shall be necessary to acquire as and when needed all such land, and rights in respect of land as shall be required for the construction and operation of the facilities included in the Project. Section 3.07. The Borrower shall take all necessary measures, satisfactory to the Bank, to ensure that the Project is carried out with due regard to ecological and environmental factors.
-9- ARTICLE IV Management and Operations of the Borrower Sectioa 4.01. The Borrower shall, at all times, manage its affairs, plan its future expansion and carry on its operations with due diligence and efficiency and in accordance with appropriate administrative, business, financial, engineering and mining practices. Section 4.02. The Borrower shall: (a) annually consolidate project plans into a five-year corporate plan, including projections of the Borrower's financial statements; (b) by December 31, 1976 or such later date as the Bank shall establish, furnish to the Bank for its approval an organizational chart for the new installations included in the Project and a detailed staffing, recruiting and training plan for the operation thereof; and (c) with the assistance of the Guarantor, ensure that arrangements satisfactory to the Bank are made for the transportation of concentrates from the Cobriza mine to La Oroya. Section 4.03. The Borrower shall take all action necessary on its part to enable it to carry out the Stage I Expansion Program in accordance with a time schedule satisfactory to the Bank.
- 10 - Section 4.04..The Borrower shall take out and maintain with responsible insurers insurance against such risks and in such umounts as shall be consistent with appropriate practice. Section 4.05. (a) The Borrower shall take all steps necessary to maintain its corporate existence and to acquire, maintain and renew all rights, powers, privileges and franchises which are necessary or useful in the conduct of its business. (b) The Borrower shall at all times operate and maintain its plants, equipment and property, and promptly make all necessary repairs and renewals thereof in accordance with appropriate engineering and mining practices.
- 11 - ARTICLE V Financial Covenants Section 5.01. The Borrower shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations and financial condition. Section 5.02. (a) The Borrower shall furnish to the Bank as soon as available, but in any case not later than four months after the end of each of its fiscal years, copies of its financial statements for each such year. (b) The Borrower shall: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with sound auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of its financial statements for such year as so audited and (B) 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 the accounts and financial statements of the Borrower and the audit thereof as the Bank shall from time to time reasonably request. (c) The Borrower shall prepare quarterly financial statements and shall furnish to the Bank as soon as available, but in any case not later than sixty days after the end of each such quarter, copies of such statements.
- 12 - Section 5.03. (a) The Borrower represents that at the date of this Agreement no lien exists on any of its assets as security for any debt. (b) The Borrower undertakes that, except as the Bank shall otherwise agree: (i) if the Borrower shall create any lien on any of its assets as security for any debt, such lien will equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan, and in the creation of any such lien express provision will be made to that effect, at no cost to the Bank; and (ii) if any statutory lien shall be created on any assets of the Borrower as security for any debt, the Borrower shall grant, at no cost to the Bank, an equivalent lien satisfactory to the Bank to secure the payment of the principal of, and interest and other charges on, the Loan; provided, however, that the foregoing provisions of this paragraph shall not apply to: (A) any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property; or (B) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after the date on which it is originally incurred. Section 5.04. Except as the Bank shall otherwise agree: and (a) the Borrower shall maintain a debt-equity ratio of 50:50; (b) the Borrower shall not incur any debt (i) if such debt would raise the Borrower's debt-equity ratio above 50:50 and (ii) unless its projected net revenues for any twelve-month period
- 13 - following such incurrence, as determined by the Borrower to the satisfaction of the Bank, shall be not less than? times the maximum debt service requirement for the same twelve-month period, including the debt to be incurred. For the purposes of this Section: (i) The term "debt" means all debt of the Borrower, including debt for the service of which the Borrower is responsible, maturing by its terms more than one year after the date on which it is originally incurred. (ii) Debt shall be deemed to be incurred on the date of execution and delivery of a contract, loan agreement or other instrument providing for such debt or for the modification of its terms of payment; provided, however, that in the case of guarantee of debt, debt shall be deemed to be incurred on the day the agreement guaranteeing such debt has been entered into but only to the extent that the guaranteed debt is outstanding. (iii) The term "equity" means the total paid-in capital, reserves and retained earnings of the Borrower, determined in accordance with sound accounting practices. (iv) The term "net revenues" means gross revenues less operating and administrative expenses, but before provision covering depreciation, interest and other charges on debt.
(v) The-term "debt service requirement" means the aggregate amount of amortization (including sinking fund payments, if any), interest and other charges on debt. (vi) Whenever for the purposes of this Section it shall be necessary to value, in terms of the currency of the Guarantor, debt payable in another currency, such valuation shall be made on the basis of the prevailing lawful rate of exchange at which such other currency is, at the time of such valuation, obtainable by the Borrower for the purposes of servicing such debt. Section 5.05. Except as the Bank shall otherwise agree, the Borrower shall maintain a ratio of current assets to current liabilities of not less than 1.5 to 1. For the purposes of this Section: (i) The term "current assets" includes cash, accounts receivable due within twelve months, inventories, prepaid expenses properly chargeable to operating expenses within the next twelve months and all other assets which could, in the ordinary course of business, be converted within twelve months into cash. (ii) The term "current liabilities" includes accounts payable within twelve months, customer advances, income taxes, bonuses and all other liabilities (including debt) which will become due and payable, or could be called for payment, within twelve months.
- 15 - Section 5.06. Except as the Bank shall otherwise agree, the Borrower shall not make any investment for any purpose until completion of the Project, other than for the carrying out of the Project, the Stage I Expansion Program and the Housing Program, in amounts exceeding in the aggregate in any fiscal year of the Borrower the equivalent of thirty million dollars ($30,000,000).
- 16 - ARTICLE VI Remedies of the Bank Section 6.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) the Iey Org9nica or the Estatutos, or any provision thereof, shall have been amended, suspended or abrogated so as to affect adversely the performance by the Borrower of its obligations under this Agreement; and (b) (i) Subject to-subparagraph (ii) of this paragraph: (A) The right of the Borrower to withdraw the proceeds of the IDB Loan shall have been suspended, cancelled or terminated in whole or in part; or (B) The IDB Loan shall have become due and payable prior to the agreed maturity thereof. (ii) 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 the IDB Loan Agreement, and (B) adequate funds for the Project are available to the Borrower from other sources on terms and
- 17 - conditions consistent with the obligations of the Borrower under this Agreement. Section 6.02. For the purposes of Section 7.01 of the General Conditions, the following events are specified pursuant to paragraph (h) thereof: (a) the event specified in paragraph (a) of Section 6.01 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; and (b) the event specified in paragraph (b) (i) (B) of Section 6.01 of this Agreement shall occur.
- 18 - ARTICLE VII Effective Date; Termination Section 7.01. The following event is specified as an additional condition to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions, namely that the IDB has notified the Bank that all conditions precedent to the initial disbursement under the IDB Loan Agreement have been fulfilled, subject only to the effectiveness of this Agreement if such be the case. Section 7.02. The following is specified as an additional matter, within the meaning of Section 12.02 (c) of the General Conditions, to be included in the opinion or opinions to be furnished to the Bank, namely, that the IDB Loan Agreement (i) has been duly executed and authorized by all necessary corporate and governmental action; (ii) constitutes a valid and binding obligation of the respective parties thereto in accordance with its terms; and (iii) is, subject only to the effectiveness of this Agreement if such be the case, in full force and effect. Section 7.03. The date March 9, 1977 is hereby specified for the purposes of Section 12.04 of the General Conditions.
- 19 - ARTICLE VIII Addresses Section 8.01. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INTBAFRAD Washington, D.C. Telex: 440098 (ITT) 248423 (RCA) or 64145 (wui) For the Borrower: Empresa Minera del Centro del Per1 Augusto Wiese 891 Lima 1, Perd Cable address: CENTROMI Peru Telex: 20009 PU
- 20 - IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ E. Lerdau Acting Regional Vice President Latin America and the Caribbean EMPRESA MINERA DEL CENTRO DEL PERU By /s/ G. Florez Authorized Representative /s/ C. Correa Authorized Representative
- 21 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of imported 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) Solvent Extraction/ 3,000,000 55% of foreign Electro-Winning expenditures Plant (including spare parts therefor) (2) Mining Equipment 6.ooo,ooo 55% of foreign (including spare expenditures parts therefor) (3) Concentrator Plant 15,000,000 55% of foreign (including spare expenditures parts therefor) and Infrastructure (4) Consultants and 4,000,000 55% of foreign Technical Services expenditures (5) Miscellaneous 2,000,000 100% of foreign Equipment and Serv- expenditures ices
- 22 - Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (6) Interest and other 7,000,000 Amounts due charges on the Loan accrued on or before April 30, 1980 (7) Unallocated 3,000,000 TOTAL 40,000,000
- 23-2. For the purposes of this Schedule, the term "foreign expenditures" means expenditures in the currency of a country other than the Guarantor and for goods or services supplied from the territory of any country other than the Guarantor. 3. The disbursement percentages have been calculated in compliance with the policy of the Bank that no proceeds of the Loan shall be disbursed on account of payments for taxes levied by, or in the territory of, the Guarantor on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Loan decreases or increases, the Bank may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Bank. 4. Notwithsanding the provisions of paragrapb 1 above, no withdrawals shall be made in respect of expenditures prior to the date of this Agreement, except that withdrawals may be made in respect of Categories (4) and (5) on account of expenditures incurred after December 31, 1975 in an aggregate amount not exceeding the equivalent of $700,000. 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph 1 above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Bank may, by notice to the Borrower reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the
- 24~ Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures. 6. If the Bank shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan.
- 25 - SCHEDULE 2 Description of the Project The Project is p&r,t of the Borrower's Stage I Expansion Program. The Project consists of the following Parts: Part A: Cobriza Mine Expansion (i) Expansion of the Cobriza mine to increase production of ore from 700,000 to 3,500,000 short-tons per year on the br.sis of deposits estimated to contain, at least, 56 million short-tons of mineralized material grading 1.8% copper and 0.5 oz. of silver per ton; (ii) Construction of a new concentrator capable of treating the expanded mine production; and (iii) Construction of related administrative, industrial and social infrastructure. Part B: Cerro de Pasco Mine Water Treatment Plant (i) Replacement of the existing copper cementation plant with a solvent extraction and electro-winning plant capable of treating mine waters and dump leach solutions to produce 7000 short-tons per year of cathode grade copper; and
- 26 - (ii). Construction of a waste neutralization plant to treat the discharge from the solvent extraction electro-winning plant and other discharges, reducing pollution in the San Juan and Mantaro rivers. The Project is expected to be completed by June 30, 1980.
- 27- SCHEDULE 3 Amortization Schedule Date Payment Due Payment of Principal (expressed in dollars)* November 1, 1980 1,215,000 May 1, 1981 1,270,000 November 1, 1981 1,320,000 May 1, 1982 1,380,000 November 1, 1982 1,44o,000 May 1, 1983 1,495,000 November 1, 1983 1,565,000 May 1, 1984 1,630,000 November 1, 1984 1,695,000 May 1, 1985 1,770,000 November 1, 1985 1,845,000 may 1, 1986 1,925,000 November 1, 1986 2,005,000 May 1, 1987 2,090,000 November 1, 1987 2,180,000 May 1, 1988 2,275,000 November 1, 1988 2,370,000 may 1, 1989 2,1465,000 November 1, 1989 2,575,000 May 1, 1990 2,685,000 November 1, 1990 2,805,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal.
- 28 - Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 1-1/2% More than three years but not more than six years before maturity 2-3/4% More than six years but not more than eleven years before maturity 5-3/4% More than eleven years but not more than thirteen years before maturity 7% More than thirteen years before maturity 8-1/2%
- 29 - SCHEDULE 4 Procurement A. International Competitive Bidding Except as provided in Part D, the goods and works shall be procured under contracts to be awarded in accordance with procedures consistent with those set forth in Part A of the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in August 1975 (hereinafter called the Guidelines), on the basis of international competitive bidding. B. Evaluation and camparison of Bids for Goods For the purpose of evaluation and comparison of bids for the supply of goods: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for imported goods; (ii) customs duties and other import taxes on imported goods shall be excluded; and (iii) the cost to the Borrower of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be included. C. Review of Procurement Decisions by Bank 1. With respect to all contracts included in Part A hereof estimated to cost the equivalent of $150,000 or more: (a) Before bids are invited, the Borrower shall furnish to the Bank, for its comments, the text of the invitations to bid and
- 30 - the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Bank shall reasonably request. Any further modification to the bidding documents shall require the Bank's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform the Bank of the name of the bidder to which it intends to award the contract and shall furnish to the Bank, in sufficient time for its review, a detailed report, by the consultants referred to in Section 3.03 of this Agreement, on the evaluation and comparison of the bids received, together with the recommendations for award of the said consultants and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Bank's concurrence, materially differ from those on which bids were asked or prequalification invited. (d) Two conformed copies of the contract shall be furnished to the Bank promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract.
- 31-2. With respect to each contract to be financed out of the proceeds of the Loan and not governed by the preceding paragraph, the Borrower shall furnish to the Bank, promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract, two conformed copies of such contract, together with the analysis of bids, recommendations for award and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. D. Negotiated Purchase of Standardized Equipment For the purpose of maintaining a reasonable standardization of its equipment, the Borrower may, pursuant to Part B of the Guidelines, procure from its usual suppliers without inteinational competitive bidding, such miscellaneous equipment in the Project as shall be agreed to by the Bank.