The World Bank
1818 H Street N.W.
(202) 477-1234
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
Washington, D.C. 20433
Cable Address: INTBAFRAD
INTERNATIONAL DEVELOPMENT ASSOCIATION
U.S.A.
Cable Address: INDEVAS
September 18, 2002
The Honorable
Cesar Gaviria
Secretary General
Organization of American States
17 Street and Constitution Ave., N.W.
Washington, D.C. 20006
Re: Dutch Grant for Transboundary Research and Management for the
Environmental Protection and Sustainable Development of the Guarani
Aquifer System - Grant No. TF051223
Dear Secretary General:
I am writing on behalf of the International Bank for Reconstruction and Development (the
Bank) to indicate the Bank's agreement, as administrator of grant funds provided by Bank-
Netherlands Partnership Program Environmental Window, to make a grant in an amount not
exceeding three hundred seventy-two thousand U.S. Dollars (US$372,000) (the Grant) to the General
Secretariat of the Organization of American States, OAS (the Recipient) for the benefit of the
Argentine Republic, the Federative Republic of Brazil, the Republic of Paraguay, and the Oriental
Republic of Uruguay (the Participating Countries).
The Grant is made in response to the Recipient's request for financial assistance and for the
purposes and on the terms and conditions set forth in the Annex to this Letter Agreement. The
Recipient represents, by confirming its agreement below, that it is authorized to contract and
withdraw the Grant for the said purposes and on the said terms and conditions.
Please note that it is the Bank's policy to make publicly available this Letter Agreement and
information related thereto in accordance with the Bank's policy on disclosure, after this Letter
Agreement has become effective and the Recipient has given its consent to such disclosure. The
Recipient, by countersigning this Letter Agreement, confirms its consent to such disclosure.
Please confirm your agreement with the foregoing, on behalf of the Recipient, by signing,
dating, and returning to us the enclosed copy of this Letter Agreement. This Letter Agreement will
become effective upon receipt by the Bank of (i) a copy of this Letter Agreement countersigned by
you, and (ii) the Project Implementation Plan (as defined in the Annex to this Letter Agreement).
Very truly yours,
INTERNATIONAL BANK FOR RECONSTRUCTION
AND DEVELOPMENT
By /s/ Vinod Thomas
Director
Brazil Country Management Unit
Latin America and the Caribbean Region
- 2 -
AGREED:
GENERAL SECRETARIAT OF THE
ORGANIZATION OF AMERICAN STATES
By:
/s/ César Gaviria
Secretary
General
Date: October 1, 2002
- 3 -
ANNEX
Purposes, Terms, and Conditions of the Grant
1. Purposes
and
Activities
1.1.
The purpose of the Grant is to provide complementary funding to the "Project for
Environmental Protection and Sustainable Management of the Guarani Aquifer System"
as set forth in the GEF grant agreement entered into between the Recipient and the Bank
on July 23, 2002.
1.2
The objective of the Grant is to provide universities in the region of the Guarani Aquifer
System with resources for joint research and capacity building in order to ensure that: (i)
groundwater discussions, in its environmental and social dimension, enter the academic agenda in
the Project region; (ii) human resources are trained in Guarani Aquifer management, particularly
regarding the environmental and social dimensions; (iii) the academic community continues to be
involved in the Project; and (iv) links are strengthened and created between the universities in the
Project region. The activities (the Activities) for which the Grant is given are as follows:
provision of subgrants for (i) the development and carrying out of courses relating to
groundwater research and/or management, with specific emphasis on the environmental aspects
of the Guarani Aquifer System, and (ii) the carrying out of research related to the Guarani
Aquifer System with the express goal of involvement of Masters' or Ph.D. students (respectively,
the Subprojects and the Subgrants).
2. Implementation
Generally
2.1.
(a) The Recipient shall: (i) carry out the Activities with due diligence and
efficiency; (ii) furnish all information covering the Activities and the use of the proceeds of the
Grant as the Bank shall reasonably request; (iii) from time to time exchange views with the
Bank's representatives on the progress and results of the Activities. Without limitation on the
foregoing, the Recipient shall, if the Bank shall so request, prepare and furnish to the Bank
promptly upon completion of the Activities a report, in form and substance satisfactory to the
Bank, on the results and impact of the Activities.
(b) The Recipient shall select Subprojects that comply with the eligibility criteria set
forth in Attachment I to this Annex.
2.2.
(a)
Without limitation to the provisions of paragraph 2.1 above, the Recipient
shall carry out the Activities, enter into Subgrants and monitor the implementation of the
Subprojects in accordance with an implementation plan satisfactory to the Bank (the Project
Implementation Plan), which shall include, inter alia: (i) the detailed selection process for
subgrant provision and application procedures for the subgrants; (ii) financial management,
disbursement and procurement arrangements for Subprojects; (iii) accounts and record keeping
for Subprojects; and (iv) monitoring and evaluation arrangements for Subprojects.
(b)
The Recipient shall not amend the Project Implementation Plan without the Bank's
consent.
- 4 -
(c)
In case of discrepancy between the provisions of the Project Implementation Plan
and those of this Letter Agreement, the provisions set forth in this Letter Agreement shall prevail.
3. Procurement
3.1
Except as the Bank shall otherwise agree, procurement of the consultants'
services and goods required for the carrying out of the Activities and to be financed out of the
proceeds of the Grant shall be procured under terms and conditions satisfactory to the Bank and
in accordance of the following:
(a) in the case of consultant services (i) in accordance with the provisions of the
Introduction and Section IV of the "Guidelines: Selection and Employment of Consultants by
World Bank Borrowers", published by IBRD in January 1997 and revised in September 1997 and
January 1999 (the Consultant Guidelines); and (ii) under contracts provided on the basis of
procedures acceptable to the Bank. The review procedures set forth in paragraph 4 of Appendix 1
to the Guidelines shall apply to such contracts; and
(b) in the case of goods (i) in accordance with the provisions of Section I of the
"Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in
January 1995 and revised in January and August 1996, September 1997 and January 1999 (the
Guidelines); and (ii) under contracts awarded on the basis of shopping procedures in accordance
with the provisions of paragraphs 3.5 and 3.6 of the Guidelines. The review procedures set forth
in paragraph 4 of Appendix 1 to the Guidelines shall apply to such contracts, provided that the
word "bids", in such paragraph 4, shall be read as "quotations".
3.2
Notwithstanding the provisions of paragraph 3.1 above the Recipient agrees that:
(i) the goods and services to be financed out of the proceeds of the Grant shall be purchased at a
reasonable price, account being taken also of other relevant factors such as time of delivery and
efficiency and reliability of the goods, and, in case of services, of their quality and the
competence of the parties rendering them; and (ii) such goods and services shall be used
exclusively in the carrying out of the Activities.
4.
Withdrawal of Grant Proceeds
4.1.
The amount of the Grant shall be credited to an account opened by the Bank on its books
in the name of the Recipient (the Grant Account), and may be withdrawn therefrom by the
Recipient in accordance with the provisions of this Section 4, for expenditures in respect of the
reasonable cost of goods and services required for the Activities and to be financed out of the
proceeds of the Grant.
4.2.
The expenditures for the following items may be financed out of the proceeds of the
Grant and shall be used exclusively in the carrying out of the Activities:
- 5 -
Amount of the Grant
% of Expenditures
Allocated (in U.S. Dollars)
to be Financed
Item
(1) Subgrants
349,680 100%
(2) OAS administrative
22,320 100%
fee
Total
372,000
4.3.
Notwithstanding the provisions of paragraph 4.2 above: (a) no withdrawals shall be
made: (i) for payments made for expenditures prior to the date of this Letter Agreement; (ii) on
account of payments for any taxes levied by or in the territory of the Beneficiaries; (iii) on
account of expenditures in the territories of any country which is not a member of the Bank or for
services supplied from such territories; (iv) for the purpose of any payment to persons or entities
if such payment, to the Bank's knowledge, is prohibited by a decision of the United Nations
Security Council taken under Chapter VII of the Charter of the United Nations; or (v) after June
30, 2004 or such later date as the Bank shall establish by written notice to the Recipient (the
Closing Date), except that withdrawals may be made for expenditures incurred prior to the
Closing Date and received by the Bank within four months after the Closing Date, after which
time any amount of the Grant remaining unwithdrawn from the Grant Account shall be canceled.
4.4
When the Recipient shall desire to withdraw any amount from the Grant Account, it shall
deliver to the Bank a written application for withdrawal of such amount in the form specified by
the Bank. Withdrawal applications shall be: (a) signed on behalf of the Recipient by its Secretary
General or such other person as he or she shall have authorized in writing; and (b) be
accompanied by such evidence in support of the application as the Bank shall reasonably request.
Authenticated specimen signatures of the person authorized to sign withdrawal applications shall
be provided with the first application bearing his or her signature. Each withdrawal application
for an amount of the Grant is supporting evidence must be sufficient in form and substance to
satisfy the Bank that the Recipient is entitled to withdraw such amount from the Grant Account
and that such amount is to be used in the carrying out of the Activities. The Bank shall pay the
amounts withdrawn by the Recipient from the Grant Account only to or on the order of the
Recipient.
4.5
The Bank may require withdrawals from the Grant Account to be made on the basis of
statements of expenditure for expenditures for goods and services under such terms and
conditions as the Bank shall specify by notice to the Recipient.
4.6.
Withdrawals of the proceeds of the Grant shall be made in the currency of the Grant. The
Bank, at the Recipient's request and acting as an agent of the Recipient, shall purchase with the
currency of the Grant withdrawn from the Grant Account such currencies as shall be required to
pay for expenditures to be financed out of the proceeds of the Grant. Whenever it shall be
necessary, for the purposes of this Letter Agreement, to determine the value of one currency in
terms of another, such value shall be as reasonably determined by the Bank.
5.
Accounts and Audits
- 6 -
5.1.
(a) The Recipient shall maintain or cause to be maintained a financial management
system, including records and accounts, and prepare financial statements in a format acceptable to
the Bank, adequate to reflect in accordance with sound accounting practices the operations,
resources and expenditures related to the Activities.
(b) The Recipient shall: (i) have the records, accounts and financial statements referred to
in subparagraph (a) above for each fiscal year audited, in accordance with auditing standards
acceptable to the Bank, consistently applied, by independent auditors with qualifications,
experience and terms of reference 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 the financial statements referred to in paragraph (a) of this Section for such year as so
audited, and (B) an opinion on such statements, records and accounts and 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, and concerning said auditors, as the Bank shall from time to time reasonably
request.
(c) For all expenditures with respect to which withdrawals from the Grant Account were
made on the basis of statements of expenditure, the Recipient shall: (i) maintain or cause to be
maintained, in accordance with subparagraph (a) above, records and accounts reflecting such
expenditures; (ii) retain, until at least after one year after the Bank has received the audit report
for the fiscal year in which the last withdrawal from the Grant Account was made, all records
(contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures;
(iii) 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 subparagraph (b) above 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.
6. Suspension
and
Cancellation
6.1.
The Bank may at any time, by notice to the Recipient, suspend the right of the Recipient
to make further withdrawals from the Grant Account if any of the following events has occurred
and is continuing: (a) the funds withdrawn shall not have been issued for the purposes agreed
between the Recipient and the Bank; or (b) the Recipient has failed to comply with any of its
obligations therein specified.
6.2.
The Bank may, by written notice to the Recipient, terminate the right of the Recipient to
make further withdrawals from the Grant Account: (a) at any time after the right of the Recipient
to make withdrawals from the Grant Account shall have been suspended pursuant to the
provisions of paragraph 6.1 above; or (b) if the Recipient shall have failed to take action,
satisfactory to the Bank, within six months after the effective date hereof, to carry out the
Activities.
- 7 -
Attachment I
Eligibility Criteria
1.
Subprojects shall consist of the design and carrying out of one of the following:
(a)
capacity-building courses and events on the applied research and management for
groundwater, with emphasis on its protection and environmental aspects; and
(b)
academic projects of research on the environmental aspects of groundwater
related to PhD, master's programs and publication of papers.
The courses, events and research projects referred to in paragraphs (a) and (b) above shall
include, but shall not be limited to, the following:
(i) expansion and consolidation of current scientific and technical knowledge on
point-source and non-point-source pollution;
(ii) vulnerability studies;
(iii)
studies on recharge-discharge areas and groundwater protection zones;
(iv)
studies dealing with issues of overexploitation and its financial impacts;
(v) environmental issues in groundwater management and monitoring schemes;
(vi)
environmental impacts of geothermal utilization; and
(vii)
environmental and legal groundwater issues on the international and
national/sub-national levels;
2.
Subproject proposals shall be made by national academic and educational institutions
mainly universities- in the four participating countries which: (i) are located within the Guarani
Aquifer System Groundwater Basin; or (ii) have a recognized background in research on Guarani
Aquifer System issues (the Participants).
3.
(a)
For each request, at least two universities from at least two Participating
Countries need to apply jointly. However, in the case of the Argentine Republic and the
Federative Republic of Brazil the two Participants can be located in different states/provinces
within the same Participating Country. Nevertheless, priority shall be given to proposals
submitted by a group of Participants located in two different Participating Countries.
(b)
If the Project steering committee so decides, requests could also be accepted
from public research institutions (not universities) associated with at least one university.
4.
The maximum funding for each application will be the equivalent of US$40,000, each
with a Participant counterpart contribution of at least 25% of the total cost of the Subproject.
This counterpart support may be in kind (i.e. as operating costs of laboratories, Participant's
administrative costs, salaries of researchers and assistants, etc).
- 8 -
5.
No Participant shall be awarded more than two (2) financial support agreements from the
Fund.
6.
The cumulative funds received by the Participants in one Participating Country shall not
be more than 60% of the total amounts available in the Fund, and all Participating Countries must
be awarded at least one Subproject.
7.
The duration of each Subproject shall be a maximum of 3 years.
8. Award
of
funding:
(a)
The Project steering committee of the Guarani Aquifer System Project, which
consists of four decision makers from each Participating Country, would appoint a panel,
acceptable to the Bank, with at least one person from each Participating Country. The Guarani
Aquifer System Project's general project secretariat (to be established in Montevideo under the
Project) shall collect Subproject proposals and forward them to said panel, which shall review
them, decide on eligibility and allocations.
(b)
Detailed procedures related to application procedures, eligibility criteria, etc.
shall be designed and included in said Project Implementation Plan to be approved by the Project
steering committee. In case of inconsistency between the provisions of this Attachment I and
those of the Subproject Project Implementation Plan, the provisions of this Attachment I shall
prevail.
(c)
The award decision by the panel shall be communicated to the Bank through the
general project Secretariat for the Bank's approval.
- 9 -
Attachment II
Special Account
1.
For the purposes of this Attachment:
(a)
the term "eligible item(s)" means the item(s) set forth in the table in paragraph 4.2
of the Annex to this Letter Agreement;
(b)
the term "eligible expenditures" means expenditures in respect of the reasonable
cost of goods and services required for the Activities and to be financed out of the proceeds of the
Grant; and
(c)
the term "Authorized Allocation" means an amount equivalent to US$250,000 to
be withdrawn from the Grant Account and deposited into the Special Account pursuant to
paragraph 3 (a) of this Attachment.
2.
Payments out of the Special Account shall be made exclusively for eligible expenditures in
accordance with the provisions of this Attachment.
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)
The Recipient shall furnish to the Bank a request or requests for a deposit into the
Special Account of an amount or amounts 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
Recipient, withdraw from the Grant Account and deposit into the Special Account such amount or
amounts as the Recipient shall have requested.
(b)
(i)
For replenishment of the Special Account, the Recipient shall furnish to
the Bank requests for deposits into the Special Account at such intervals as the Bank shall specify.
(ii)
Prior to or at the time of each such request, the Recipient shall furnish to the Bank
the documents and other evidence required pursuant to paragraph 4 of this Attachment 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 Recipient, withdraw from the Grant Account and deposit
into the Special Account such amount as the Recipient 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 Grant Account
under the eligible item(s), and in the respective equivalent amounts, as shall have been justified by
said documents and other evidence.
4.
For each payment made by the Recipient out of the Special Account, the Recipient 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 Attachment, the Bank shall not be
required to make further deposits into the Special Account:
- 10 -
(a)
if, at any time, the Bank shall have determined that all further withdrawals should
be made by the Recipient directly from the Grant Account;
(b)
if the Recipient shall have failed to furnish to the Bank, within the period of time
specified in paragraph 5.1 (b) (ii) of the Annex to this Letter Agreement, any of the audit reports
required to be furnished to the Bank pursuant to said paragraph in respect of the audit of the records
and accounts for the Special Account;
(c)
if, at any time, the Bank shall have notified the Recipient of its intention to suspend
in whole or in part the right of the Recipient to make withdrawals from the Grant Account pursuant
to the provisions of paragraph 6.1 of the Annex to this Letter Agreement; or
(d)
once the total unwithdrawn amount of the Grant shall equal the equivalent of twice
the amount of the Authorized Allocation.
Thereafter, withdrawals from the Grant Account of the remaining unwithdrawn amount of the Grant
shall follow such procedures as the Bank shall specify by notice to the Recipient. 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 Attachment; or (ii) was not justified by the evidence furnished to the Bank, the Recipient 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 Recipient has provided such evidence or made such deposit or refund, 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
Recipient shall, promptly upon notice from the Bank, refund to the Bank such outstanding amount.