Page  1
CONFORMED COPY
 
CREDIT NUMBER 4382-BO 
 
Financing Agreement 
 
(Expanding Access to Reduce Health Inequities Project 
–
APL III) 
 
between 
 
REPUBLIC OF BOLIVIA 
 
and 
 
INTERNATIONAL DEVELOPMENT ASSOCIATION 
 
Dated September 19, 2008  
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CREDIT NUMBER 4382-BO 
 
FINANCING AGREEMENT 
AGREEMENT dated September 19, 2008, entered into between REPUBLIC OF 
BOLIVIA (“Recipient”) and INTERNATIONAL DEVELOPMENT ASSOCIATION 
(“Association”).  The Recipient and the Association hereby agree as follows: 
 
ARTICLE I 
—
GENERAL CONDITIONS; DEFINITIONS 
 
1.01. 
The General Conditions (as defined in the Appendix to this Agreement) 
constitute an integral part of this Agreement. 
 
1.02. 
Unless the context requires otherwise, the capitalized terms used in this 
Agreement have the meanings ascribed to them in the General Conditions or in 
the Appendix to this Agreement.  
 
ARTICLE II — FINANCING 
 
2.01. 
The Association agrees to extend to the Recipient, on the terms and conditions 
set forth or referred to in this Agreement, a credit in an amount equivalent to 
eleven million seven hundred thousand Special Drawing Rights (SDR 
11,700,000
)
(variously, “Credit” and “Financing”) to assist in financing the 
project described in Schedule 1 to this Agreement (“Project”). 
 
2.02. 
The Recipient may withdraw the proceeds of the Financing in accordance with 
Section IV of Schedule 2 to this Agreement.   
 
2.03. 
The Maximum Commitment Charge Rate payable by the Recipient on the 
Unwithdrawn Financing Balance shall be one-half of one percent (1/2 of 1%) per 
annum. 
 
2.04. 
The Service Charge payable by the Recipient on the Withdrawn Credit Balance 
shall be equal to three-fourths of one percent (3/4 of 1%) per annum. 
 
2.05. 
The Payment Dates are February 15 and August 15 in each year. 
 
2.06. 
The principal amount of the Credit shall be repaid in accordance with the 
repayment schedule set forth in Schedule 3 to this Agreement. 
 
2.07. 
The Payment Currency is Dollars. 
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2
ARTICLE III 
—
PROJECT 
3.01. 
The Recipient declares its commitment to the objectives of the Project.  To this 
end, the Recipient shall carry out the Project through MSD with the assistance of 
FPS, in accordance with the provisions of Article IV of the General Conditions. 
 
3.02. 
Without limitation upon the provisions of Section 3.01 of this Agreement, and 
except as the Recipient and the Association shall otherwise agree, the Recipient 
shall ensure that the Project is carried out in accordance with the provisions of 
Schedule 2 to this Agreement. 
 
ARTICLE IV — REMEDIES OF THE ASSOCIATION 
 
4.01. 
The Additional Events of Suspension consist of the following: 
 
(a) 
FPS shall have failed, in the opinion of the Association, to perform any 
of its obligations under the FPS Subsidiary Agreement or the Inter-
Institutional Agreement. 
 
(b) 
The Procurement Supreme Decree has been amended, suspended, 
abrogated, repealed or waived so as to render its Article 42 (a) 
ineffective, in the opinion of the Association, and no provision analogous 
to such Article 42 (a) has been adopted to replace said provision. 
 
4.02. 
The Additional Event of Acceleration consists of the following, namely, that any 
event specified in Section 4.01
 
of this Agreement occurs and is continuing for a 
period of 60
 
days after notice of the event has been given by the Association to 
the Recipient. 
 
ARTICLE V — EFFECTIVENESS; TERMINATION 
 
5.01. 
The Additional Conditions of Effectiveness consist of the following: 
 
(a) 
The FPS Subsidiary Agreement, the MSD Subsidiary Agreement and the 
Inter-Institutional Agreement have been executed on behalf of the 
Recipient, FPS and MSD. 
 
(b) 
The Operational Manual has been adopted in a manner satisfactory to the 
Association. 
 
5.02. 
The Additional Legal Matter consists of the following, namely, that the FPS 
Subsidiary Agreement has been duly authorized or ratified by the Recipient and 
FPS and is legally binding upon the Recipient and the FPS in accordance with its 
terms. 
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5.03. 
Without prejudice to the provisions of the General Conditions, the Effectiveness 
Deadline is the date one hundred twenty (120) days after the date of this 
Agreement, but in no case later than the eighteen (18) months after the 
Association’s approval of the Credit which expire on July 24, 2009. 
 
ARTICLE VI 
—
REPRESENTATIVE; ADDRESSES 
 
6.01. 
The Recipient’s Representative is its Minister of Development Planning. 
 
6.02. 
The Recipient’s Address is: 
 
Ministerio de Planificación del Desarrollo  
Viceministerio de Inversión Pública y Financiamiento Externo (VIPFE) 
Palacio de Comunicaciones, Piso 11 
La Paz, Bolivia 
 
Facsimile: 
011-591-2-231-7408 (with a copy to: 011-591-2-239-2891) 
6.03. 
The Association’s Address is: 
 
International Development Association 
 
1818 H Street, N.W. 
Washington, D.C. 20433 
 
United States of America 
 
Cable: 
  Telex: 
  Facsimile: 
 INDEVAS 
 248423 
(MCI) 
 1-202-477-6391 
 Washington, 
D.C. 
 
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AGREED at La Paz, Bolivia, as of the day and year first above written. 
 
REPUBLIC OF BOLIVIA 
 
By /s/ Carlos Villegas 
Authorized Representative 
 
INTERNATIONAL DEVELOPMENT ASSOCIATION 
 
By /s/ Felipe Jaramillo 
Authorized Representative 
 
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SCHEDULE 1 
Project Description
 
The objectives of the Project are to: (i) reduce occurrence of critical risk factors 
affecting maternal and infant health in the Target Areas so that current gaps between 
regions are reduced; (ii) reduce chronic malnutrition among children under 2 years of age 
in the Target Areas; (iii) increase health insurance coverage in the Target Areas; and (iv) 
upgrade the SNIS so that it will 
be integrated with the Recipient’s new health insurance 
program.  
 
The Project consists of the following parts: 
 
Part 1.
Stewardship Role of Health Authorities - Essential Functions in Public Health 
(a) 
Strengthening the SNIS in the areas of data gathering, analysis, reporting, 
monitoring, supervision, evaluation, management and research, through: 
 
(i) 
the design and adaptation of the technical standards, processes, 
procedures and standards of the SNIS in public health and 
epidemiological surveillance, including: (A) identification and evaluation 
of new sectoral and intersectoral information needs caused by 
implementation of new health policies; (B) development of instruments 
for the capture and validation of the data from primary and secondary 
sources of information, securing flows of information, frequency, quality 
control, and definition of levels of information; and (C) development of 
complementary computer tools and software for implementation and 
operation at the national, departmental and Project-targeted 
municipalities level; 
 
(ii) 
the implementation of the monitoring, evaluation, and feedback system 
of the Recipient’s Sectoral Development Plan for 2006-2010 (
Plan de 
Desarrollo Sectoria-PDS
), at national, departmental, and local health 
institutions levels including: (A) integrated design of the system of 
monitoring, evaluation, and feedback and its implementation at the 
national level; (B) training of staff at all levels of management for the 
analysis, processing, and use of monitoring and evaluation information; 
(C) reorientation of the methodologies for the committees of information 
analysis in the different levels of management; and (D) dissemination of 
monitoring and evaluation results at all levels of management; 
 
(iii) 
the development of a new national system for health research, including: 
(A) support for the design, development, and implementation of a 
national system of health research; (B) research of impact of projects and 
health programs (impact-cost, benefit-cost, effectiveness, etc.); (C) 
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6
design of mechanisms to select priority lines of research; and (D) design 
of a virtual library for the national network of information (including 
digitizing and cataloging past research, and providing research 
information for policy-making and decision-making in health); and 
 
(iv) the 
implementation 
of 
the Recipient’s next demographic and health 
national survey and the strengthening of the vital statistics service in 
coordination with all actors and institutions involved in the system 
including the link with the SNIS.  
 
(b) 
Strengthening the capacity of MSD and of the Recipient’s departmental and local 
health authorities in order to apply modern management methodologies and 
instruments, to design programming based on priority and goal selection, and to 
establish a results-based management system, through: 
 
(i) 
the provision of technical assistance to develop and implement standard 
practices and management tools, including: (A) the preparation and 
validation of norms, processes, methodologies, and management tools; 
and (B) the carrying out of training for national and departmental level 
public health staff in the use of new standard practices, processes, 
methodologies and management tools, monitoring, project and programs 
evaluations; 
 
(ii) 
the strengthening of the coordination of international and multilateral 
donors and the generation of a coordinated process of planning, 
including: (A) the harmonization of cycles of projects, processes, 
administrative and financial procedures and the harmonization of 
national standards with those of international donors; (B) advocacy in 
favor of the implementation of the Recipient’s sectoral approach in 
health; (C) the collaboration of donors in preparation and monitoring of 
the institutional strategic plan of MSD and decentralized institutions; (D) 
collaboration of donors in monitoring the implementation of 
departmental health plans; (E) regulation of the operation of Recipient’s 
non-governmental organizations for the assessment of the outcomes of 
their health projects; (F) updating of the information on interventions in 
health of non-governmental organizations and assessment of their 
outcomes at national level and departmental level; (G) updating of the 
information on the health interventions of cooperative agencies and 
assessment of program outcomes; (H) evaluation and systematization of 
impact of projects, health programs and the design of new strategies; and 
(I) diffusion and feedback of the advantages and disadvantages of the 
strategies, programs and projects; 
 
(iii) 
the carrying out of a Project evaluation; 
 
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(iv) 
the dissemination of the health results achieved 
by
the Recipient’s 
national, departmental and municipals governments during their 
respective management periods,
 
through community meetings, 
workshops and publications financed by the Project; and 
 
(v) 
the strengthening of MSD’s human resources policy, including the 
upgrading of the human resources data captured by SNIS in order to 
identify gaps, limitations of training, evaluation of performance and the 
updating of regulatory framework for the management of human 
resources of the sector. 
 
(c) 
Licensing, certification and monitoring of the Recipient’s health facilities, 
including hospitals, ambulatory health centers, clinical laboratories, blood banks, 
clinics and rehabilitative services, and other heath service units, to assure the 
delivery of quality health care services, through:  
 
(i) 
the development of capacity in quality management concepts; and 
 
(ii) 
the development and implementation of standards and instruments of 
quality management in the provision of health services. 
 
Part 2.
Family, Community and Intercultural Health
(a) 
Development and strengthening of an intercultural maternal and infant health 
referral network, through: 
 
(i) 
the carrying out of a study to analyze and determine the status of 
resources and existing capacities of the health networks in the Target 
Areas; 
 
(ii) 
the renovation of public health facilities, public housing, the purchase of 
medical equipment therefore, the carrying out of FPS financial audits and 
the financing of FPS operating costs; 
 
(iii) 
the financing of expanded human resources; 
 
(iv) 
the design of a program of regular continuing education for each referral 
network; 
 
(v) 
the financing of expenses of operational research of outbreaks or 
suspected outbreaks; and 
 
(vi) 
the creation of three Recipient regional centers for medical equipment 
repair and maintenance. 
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8
(b) 
Strengthening community participation in the management of local health 
activities, including promotion of healthy lifestyles and the demand for maternal 
and child health services, through: 
 
(i) 
the carrying out of: (A) workshops with special emphasis on issues 
affecting maternal and child mortality and chronic malnutrition; and (B)  
training for local social organizations and community leaders; 
 
(ii) 
the carrying out of training for health workers, organizations and 
community leaders in the methodology of gathering and analyzing health 
data; 
 
(iii) 
the dissemination of community and intersectoral health strategies and 
results, in meetings of social organizations and other spaces; 
 
(iv) 
the collaborative preparation of health promotion materials with 
community participation and printing and dissemination of the promotion 
materials in the local communities; and 
 
(v) 
the carrying out of training of the DILOS for increased capacity to 
manage local health issues and for monitoring the municipal 
management commitments with the public health networks. 
 
Part 3.
SU SALUD
 
Health Insurance Program
(a) 
Support the rollout of a national SU SALUD record system for the enrollment of 
families and individuals, through: 
 
(i) 
the carrying out of training in use of the enrollment system for key 
personnel, operational personnel and community leaders; 
 
(ii) 
the implementation of a communication and social marketing strategy to 
promote enrollment throughout the 
Recipient’s territory, including: (A) 
production of materials and dissemination at the national level; (B) 
intrasectoral and intersectoral activities for coordination and consensus-
building; and (C) training for local media and meetings and community 
workshops; and 
 
(iii) 
the printing and distribution of enrollment forms nation-wide and design 
and implementation of a mass enrollment campaign in the Target Areas. 
 
(b) 
Strengthening MSD’s capacity to plan, manage, and carry out monitoring and 
evaluation of SU SALUD at the national, departmental and municipal levels, 
through the provision of technical assistance, training and goods. 
 
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(c) 
Development of a monitoring and evaluation system for SU SALUD. 
Part 4.
Project Administration
Support Project administration with equipment, technical assistance, training, and 
MSD operating costs to finance the administration of the Project, including MSD 
financial and procurement audits.  
 
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SCHEDULE 2 
Project Execution 
Section I. 
Implementation Arrangements
A. 
Subsidiary Agreement  
 
1. 
To facilitate the carrying out of the Project, the Recipient shall make part of the 
proceeds of the Financing available to FPS through a subsidiary agreement 
between the Recipient and FPS, under terms satisfactory to the Association 
(“FPS Subsidiary Agreement”), including, 
inter alia
,
FPS’s obligation to provide 
all the necessary information and documentation to MSD related to FPS’s 
responsibilities under the Project (including but not limited to, the information 
required for compliance with Section III.D of Schedule 2 to this Agreement) and 
MSD’s obligations to implement the Project.  
 
2. 
The Recipient shall maintain all of the necessary conditions for FPS to comply 
with its obligations under the FPS Subsidiary Agreement. 
 
3. 
Without limitation to the provisions of paragraph 1 above, the Recipient shall 
enter into an agreement with MSD (“MSD Subsidiary Agreement”), under terms 
and conditions satisfactory to the Association, including those set forth in the 
Operational Manual, with respect to the role and responsibilities of MSD under 
the Project. 
 
4. 
Without limitation to the provisions of paragraphs 1 and 3 above, FPS shall enter 
into an agreement with MSD (“Inter-Institutional Agreement”), under terms and 
conditions satisfactory to the Association, including those set forth in the 
Operational Manual, with respect to the role and responsibilities of FPS and 
MSD under the Project. 
 
5. 
Without limitation to the provisions of paragraphs 1, 3 and 4 above, FPS shall 
enter into an agreement with each Municipality within the Target Area 
(“Municipality Agreement”), under terms and conditions satisfactory to the 
Association, including those set forth in the Operational Manual, with respect to 
the role and responsibilities of each Municipality within the Target Area for the 
carrying out of activities under Part 2 of the Project. 
 
6. 
The Recipient shall exercise its rights under the FPS Subsidiary Agreement, the 
MSD Subsidiary Agreement and the Inter-Institutional Agreement, and shall 
cause FPS to exercise its rights under the Municipality Agreements, in such a 
manner as to protect the interests of the Recipient and the Association and to 
accomplish the purposes of the Financing. Except as the Association shall 
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otherwise agree, the Recipient shall not assign, amend, abrogate, waive or fail to 
enforce the FPS Subsidiary Agreement or any of its provisions. 
 
7. 
In the case of a conflict between the provisions of the FPS Subsidiary 
Agreement, the MSD Subsidiary Agreement, the Inter-Institutional Agreement or 
the Municipal Agreements, and the provisions of this Agreement, the Recipient 
will ensure that the provisions of this Agreement will prevail. 
 
B. 
Institutional and Other Arrangements 
 
1. 
The Recipient, through MSD, shall, with the assistance of FPS, carry out the 
Project, or cause the Project to be carried out, in accordance with the provisions 
of: 
 
(a) this 
Agreement; 
 
(b) 
the FPS Subsidiary Agreement;  
 
(c) 
the MSD Subsidiary Agreement; 
 
(d) 
the Inter-Institutional Agreement;  
 
(e) 
the Municipal Agreements; and 
 
(f) the 
Operational 
Manual. 
 
2. 
At all times during the execution of the Project, MSD shall maintain a team 
responsible for the implementation of the Project (UCOFI and Technical Area), 
with staffing numbers, qualifications, functions and responsibilities satisfactory 
to the Association, including, 
inter alia
,
the following responsibilities: 
 
(a) 
overall planning, coordination, monitoring and evaluation of Project 
activities; and 
 
(b) 
the updating of the Procurement Plan and the elaboration of the annual 
implementation plan. 
 
3. 
At all times during the execution of the Project, the Recipient shall cause FPS to 
maintain staff responsible for the implementation of the Project with staffing 
numbers, qualifications, functions and responsibilities satisfactory to the 
Association. 
 
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C. Operational 
Manual 
 
1. 
The Recipient, through MSD, shall carry out the Project, or cause the Project to 
be carried out, in accordance with the terms of a manual satisfactory to the 
Association (the Operational Manual). Except as the Association shall otherwise 
agree, the Recipient shall not amend, waive or fail to enforce the Operational 
Manual or any provision thereof. In case of any conflict between the terms of this 
Agreement and those of the Operational Manual, the terms of this Agreement 
shall prevail.  
 
2. 
The Operational Manual shall include provisions detailing procedures and 
 
guidelines for the carrying out of the Project, including, 
inter alia: 
 
(a) 
the procedures for the preparation, review and approval of reports 
pursuant to the Projec
t’s financial management arrangements; 
 
(b) 
procurement and contracting procedures consistent with Schedule 2 to 
this Agreement, to be applicable to the contracts for the works, goods, 
non-consultant and consultants' services required for the Project and to 
be financed out of the proceeds of the Credit; 
 
(c) 
Project impact and implementation indicators and the procedures for the 
monitoring and evaluation of the Project, including for compliance with 
Section II of Schedule 2 to this Agreement;
 
(d) 
the procedures for the Recipient’s preparation, review and approval of 
Credit proceeds withdrawal applications to the Association, in 
conformity with the instructions that the Association may give to the 
Recipient in this respect; and 
 
(e) 
the environmental management criteria and procedures for the carrying 
out of rehabilitation and construction works under the Project and the 
mechanisms to address the culturally specific needs of the Recipient’s 
indigenous groups to ensure that the benefits of the Project are culturally 
appropriate and that there is broad community support for the Project. 
 
D. Anti-Corruption 
 
The Recipient shall ensure that the Project is carried out in accordance with the 
 
provisions of the Anti-Corruption Guidelines. 
 
E. Other 
Covenants 
 
1. 
Not later than one year after the Effective Date, the Recipient and the Association 
shall carry out a comprehensive review of the Project focused on Project 
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performance. After said review is completed, the Recipient shall take, if 
necessary, any actions recommended as a result of the review to remedy any 
problems identified during the review.   
 
2. 
The Recipient shall cause FPS to maintain throughout the implementation of the 
Project, the units referred to in paragraph B.2 of Section IV to this Schedule. 
 
3. 
Not later than 90 days after the Effective Date, the Recipient shall ensure that the 
UCOFI and the Technical Area are fully staffed and operational, and shall 
maintain them thereafter throughout the implementation of the Project. 
 
4. 
Not later than 6 months after the Effective Date, the Recipient shall establish and 
operate MSD’s integrated financial management system. 
 
5. 
Before carrying out any civil works under the Project, FPS shall have entered 
into a Municipal Agreement with each Municipality within the Target Area. 
 
Section II. 
Project Monitoring, Reporting and Evaluation 
A. Project 
Reports 
 
The Recipient shall monitor and evaluate the progress of the Project and prepare 
 
or cause to be prepared Project Reports in accordance with the provisions of 
 
Section 4.08 of the General Conditions and on the basis of the Indicators.  Each 
 
Project Report shall cover the period of one calendar semester, and shall be 
 
furnished to the Association not later than one month after the end of the period 
 
covered by such report. The Recipient shall review the most recent Project 
 
Report with the Association during the Association’s semi-annual meetings with 
 
the Recipient, or on such later dates as the Association may request. 
 
B. 
Financial Management, Financial Reports and Audits 
 
1. 
The Recipient shall, through MSD, and cause FPS to, maintain (or cause to be 
maintained) a financial management system in accordance with the provisions of 
Section 4.09 of the General Conditions. 
 
2. 
The Recipient shall, through MSD, and cause FPS to, prepare (or cause to be 
prepared) and furnish to the Association not later than 30 days after the end of 
each calendar semester, interim un-audited financial reports for each part of the 
Project covering the calendar semester, in form and substance satisfactory to the 
Association. 
 
3.      
The Recipient shall, through MSD, and cause FPS to, have the Financial 
Statements for each part of the project be audited in accordance with the 
provisions of Section 4.09 (b) of the General Conditions.  Each audit of the 
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Financial Statements shall cover the period of one fiscal year of the Recipient for 
the respective part of the Project, commencing with the fiscal year in which the 
first withdrawal under this Agreement was made. The audited Financial 
Statements for each such period shall be furnished to the Association not later 
than six months after the end of such period.  
 
Section III. 
Procurement
A. General 
 
1.
 
Goods, Works and Non-Consultant Services.
 
All goods, works and non-
consultant services required for the Project and to be financed out of the proceeds 
of the Financing shall be procured in accordance with the requirements set forth 
or referred to in Section I of the Procurement Guidelines, and with the provisions 
of this Section. 
 
2.
 
Consultants’ Services.
 
All consultants’ services required for the Project and to 
be financed out of the proceeds of the Financing shall be procured in accordance 
with the requirements set forth or referred to in Sections I and IV of the 
Consultant Guidelines, with the provisions of this Section and with the provisions 
of Section II of Annex A to this Schedule. 
 
3.
 Definitions.
 
The capitalized terms used below in this Section to describe 
particular procurement methods or methods of review by the Association of 
particular contracts, refer to the corresponding method described in the 
Procurement Guidelines, or Consultant Guidelines, as the case may be. 
 
B. 
Particular Methods of Procurement of Goods, Works and Non-Consultant 
Services  
 
1.
 
International Competitive Bidding.  
Except as otherwise provided in paragraph 
2
below, goods, works and non-consultant services shall be procured under 
contracts awarded on the basis of International Competitive Bidding. 
 
2.
 
Other Methods of Procurement of Goods, Works and Non-Consultant 
Services.  
The following table specifies the methods of procurement, other than 
International Competitive Bidding, which may be used for goods, works and 
non-consultant services.  The Procurement Plan shall specify the circumstances 
under which such methods may be used: 
 
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Procurement Method
(a) 
National Competitive Bidding, subject to the 
additional provisions set forth in Section I of Annex 
A
to this Schedule 2. 
(b) Shopping. 
(c) Direct 
Contracting. 
(d) 
Community Participation in Procurement. 
C. Particular 
Methods
 of Procurement of Consultants’ Services 
 
1.
 Quality- 
and 
Cost-based 
Selection.
 
Except as otherwise provided in paragraph 
2
below, consultants’ services shall be procured under contracts awarded on the 
basis of Quality and Cost-based Selection.
 
2.
 Other 
Methods of Procurement of Consultants’ Services
.
The following table 
specifies methods of procurement, other than Quality and Cost-based Selection, 
which may be used for consultants’ services.  The Procurement Plan shall specify 
the circumstances under which such methods may be used. 
 
Procurement Method
(a) Quality-based 
Selection. 
(b) 
Selection under a Fixed Budget. 
(c) 
Least Cost Selection. 
(d) 
Selection Based on Consultant’s Qualifications. 
(e) 
Single Source Selection. 
(f) 
Procedures set forth in paragraphs 5.2 and 5.3 of 
the Consultant Guidelines for the Selection of 
Individual Consultants. 
(g)  Sole Source Procedures for the Selection of 
Individual Consultants. 
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D. 
Review by the Association of Procurement Decisions 
 
1. 
The Procurement Plan shall set forth those contracts which shall be subject to the 
Association’s Prior Review.  All other contracts shall be  subject  to  Post  Review 
by the Association. 
 
2.
 
Annual Procurement Audits.  The Recipient, through MSD, shall: 
 
(a) 
not later than January 30 of each year during the implementation of the 
Project, beginning on January 30, 2009, contract independent auditors 
with experience and qualifications satisfactory to the Association, 
operating under terms of reference satisfactory to the Association, to 
perform a procurement audit of all the procurement records and 
documentation for the Project, relating to the Recipient’s previous fiscal 
year of implementation of the Project, in accordance with procurement 
auditing principles acceptable to the Association (“Procurement Audit”); 
 
(b) 
not later than March 31 of each year during the implementation of the 
Project, beginning on March 31, 2009 and continuing for each year 
thereafter during the implementation of the Project, furnish to the 
Association the report, in form and substance satisfactory to the 
Association, on the Procurement Audit completed for the Recipient’s 
prior fiscal year;  
 
(c) 
at all times during the implementation of the Project, furnish to the 
Association and to the auditors performing a Procurement Audit, such 
other information concerning the procurement records and 
documentation for the Project as the Association or the auditors may 
from time to time reasonably request; and 
 
(d) 
not later than April 30 of each year during the implementation of the 
Project, beginning on April 30, 2009, exchange views with the 
Association on the results of the Procurement Audit completed for the 
Recipient’s prior fiscal year and thereafter implement such recommended 
measures, taking into account the Association’s views on the matter. 
 
Section IV. 
Withdrawal of the Proceeds of the Financing
A. General 
 
1. 
The Recipient may withdraw the proceeds of the Financing in accordance with 
the provisions of Article II of the General Conditions, this Section, and such 
additional instructions as the Association shall specify by notice to the Recipient 
(including the “World Bank Disbursement Guidelines for Projects” dated May 
2006, as revised from time to time by the Association and as made applicable to 
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this Agreement pursuant to such instructions), to finance Eligible Expenditures as 
set forth in the table in paragraph 2 below. 
 
2. 
The following table specifies the categories of Eligible Expenditures that may be 
financed out of the proceeds of the Financing (“Category”), the allocations of the 
amounts of the Credit to each Category, and the percentage of expenditures to be 
financed for Eligible Expenditures in each Category: 
 
Category
Amount of the Credit 
Allocated  
(expressed in SDR
)
Percentage of 
Expenditures  
to be Financed 
(inclusive of Taxes
)
(1) Goods, consultant services, 
 
Training and MSD Operating 
 
Costs for Part 1 of the Project. 
 
2,500,000 
 
100% 
 
(2) (a) Goods, consultant services, 
 
training and MSD Operating Costs 
 
for Part 2 of the Project except for 
 
Part 2 (a) (ii);  
 
(b) Works, goods and consultant 
 
services (including audits) under 
 
Part 2 (a) (ii) of the Project; and 
 
(c) FPS Operating Costs under Part 
 
2 of the Project 
 
3,200,000 
 
2,900,000 
 
200,000 
 
100% 
 
100% 
 
5% of the total cost 
of the works, goods 
and services under 
Part 2 (a)(ii) of the 
Project paid in 
tranches as set forth 
in the Operational 
Manual  
(3) Goods, consultant services, 
 
Training and MSD Operating 
 
Costs for Part 3 of the Project 
 
2,000,000 
 
100% 
 
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Category
Amount of the Credit 
Allocated  
(expressed in SDR
)
Percentage of 
Expenditures  
to be Financed 
(inclusive of Taxes
)
(4) Good, consultant services 
 
(including audits) and MSD 
 
Operating Costs for Part 4 of the 
 Project 
 
600,000 
 
100% 
(5) Unallocated 
 
300,000 
 
TOTAL AMOUNT 
 
11,700,000 
 
1. 
For purposes of the table in paragraph 2 above, the terms: 
 
(a) 
“Training” means reasonable expenditures (other than those for 
consultants’ services) incurred by MSD for the purposes of the Project 
and directly related to training activities described in the Project, 
including, 
inter alia
,
costs related to workshops, seminars, conferences, 
study tours, training registration fees, facility rentals, and travel costs and 
per diems
 for MSD and FPS civil service officials or employees;  
 
(b) 
“FPS Operating Costs” means reasonable recurrent expenditures (other 
than those for consultants’ services) incurred by FPS for the purposes of 
the Project and directly related to the activities described in the Project, 
including, 
inter alia
,
salaries of staff, office materials and supplies, 
operation and maintenance of office equipment, insurance, vehicle and 
equipment operation, bank charges on the Designated Account, 
transportation, phone and fax charges, media campaigns, travel and 
per 
diem
 of FPS officials for purposes of Project supervision and printing of 
materials; and 
 
(c) 
“MSD Operating Costs” means reasonable recurrent expenditures (other 
than those for consultants’ services) incurred by MSD for the purposes of 
the Project and directly related to the activities described in the Project, 
including, 
inter alia
,
office materials and supplies, operation and 
maintenance of office equipment, insurance, vehicle and equipment 
operation, bank charges on the Designated Account, utilities, rental of 
office space, transportation, phone and fax charges, media campaigns, 
travel and 
per diem
 of MSD officials for purposes of Project supervision 
and printing of materials. 
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19
B. 
Withdrawal Conditions; Withdrawal Period 
 
1.
 
Notwithstanding the provisions of Part A of this Section, no withdrawals shall be 
made for payments made prior to the date of this Agreement, except that 
withdrawals up to an aggregate amount not to exceed $600,000 equivalent may 
be made for payments made one year prior to such date but in no case before 
December 10, 2007 for Eligible Expenditures under Categories 2 (a) and (4) of 
the table in paragraph A above. 
 
2. 
No withdrawals shall be made for payments under Categories 2 (b) and (c) of the 
table in paragraph A above, until FPS has established to the satisfaction of the 
Association: (i) the control and monitoring unit under FPS’s executive office; (ii) 
the environmental unit; and (iii) the procurement monitoring unit. 
 
3. 
No withdrawals shall be made for payments under Categories (1), 2 (a), (3) and 
(4) of the table in paragraph A above, until MSD has signed the contracts of: (i) 
the UCOFI’s financial management specialist and procurement specialist; and (ii) 
the Technical Area’s technical coordinator. 
 
4.
 
The Closing Date is January 31, 2014. 
 
5. 
The Recipient shall review and adjust annually, or at any other time agreed with 
the Association, the FPS Operating Costs. Such adjustment shall be unnecessary 
if the Association is satisfied that said review reveals no change in FPS 
Operating Costs. 
 
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20
Annex A 
to 
SCHEDULE 2
 
Additional Provisions Relating to  
Particular Methods of Procurement 
Section I. 
Goods, Works and Non-Consultant Services
Without limitation upon the provisions of Schedule 2 to this Agreement or the 
Procurement Guidelines, the following additional provisions shall apply to all goods,  
works and non-consultant services procured for the Project (pursuant to Section III.A.1 of 
Schedule 2 to this Agreement) under contracts awarded on the basis of National 
Competitive Bidding (“NCB Contracts”): 
 
1. 
A merit point system shall not be used in the pre-qualification of bidders.  
 
2. 
The award of goods, works and non-consultant services contracts shall be based     
on price and, whenever appropriate, shall also take into account factors similar to 
those referred to in paragraph 2.51 of the Guidelines, provided, however, that the 
bid evaluation shall always be based on factors that can be quantified objectively, 
and the procedure for such quantification shall be disclosed in the invitation to 
bid.  
 
3. 
The Recipient shall open all bids at the stipulated time and place in accordance 
 
with a procedure satisfactory to the Association. 
 
4. 
The Recipient shall use a single envelope procedure.  
 
5. 
Whenever there is a discrepancy between the amounts in figures and in words of 
 
a bid, the amounts in words shall govern.  
 
6. 
There will be no prescribed minimum number of bids submitted for a contract to 
be subsequently awarded.   
 
7. 
Foreign bidders shall be allowed to participate.  
 
8. 
Foreign bidders shall not be required to legalize any documentation related to 
 
their bids with Bolivian authorities as a prerequisite for bidding.  
 
9. 
No margin of preference shall be granted for any particular category of bidders.  
 
Page  22
21
10. 
In the event that a bidder whose bid was evaluated as the bid with the lowest 
 
evaluated price withdraws its bid, the contract may be awarded to the second 
 
lowest responsive evaluated bid.  
 
11. 
Foreign bidders shall not, as a condition for submitting bids, be required to enter 
 
into a joint venture agreement with local bidders.  
 
12. 
No other procurement rules or regulations of the Recipient's agencies or of any 
 
state-owned entity shall apply without the prior review and consent of the 
 Association. 
 
 
13. 
Government-owned enterprises may participle in bids only if they follow 
paragraph 1.8 (c) of the Procurement Guidelines.  
 
Section II. 
Selection of Consultant Services
Without limitation upon the provisions of Schedule 2 to this Agreement or the Consultant 
Guidelines, the following additional provisions shall apply to all consultants’ services 
procured for the Project (pursuant to Section III.A.2 of Schedule 2 to this Agreement): 
 
1.  
As a condition for participating in the selection process, foreign consultants shall 
 
not be required to enter into a joint venture agreement with local consultants, 
 
unless the conditions stated in paragraph I.I.2 of the Consultant Guidelines are 
 met. 
 
 
2.  
As a condition for participating in the selection process, foreign consultants shall 
 
not be required to legalize their proposals or any documentation related to such 
 
proposals with the Recipient’s authorities.  
 
3.  
Foreign consultants shall not be required to be registered in the Recipient's 
 
National Registry of Consultants (
Registro Nacional de Consultoría
).  
 
4.  
Consultants (firms and individuals) shall not be required to present bid and 
 
performance securities as a condition to present proposals and sign a contract. 
 
Page  23
22
SCHEDULE 3
 
Repayment Schedule 
 
Date Payment Due 
Principal Amount of the Credit 
repayable 
(expressed as a percentage)* 
 
On each February 15 and August 15: 
 
Commencing  February 15, 2018 
 to and including August 15, 2027. 
1.25% 
Commencing February 15, 2028, to and including 
August 15, 2042. 
2.50% 
*
The percentages represent the percentage of the principal amount of the Credit to be 
repaid, except as the Association may otherwise specify pursuant to Section 3.03 (b) of 
the General Conditions. 
 
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23
APPENDIX 
Section I. 
Definitions 
1. 
“Anti-Corruption Guidelines” means the “Guidelines on Preventing and 
Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA 
Credits and Grants”, dated October 15, 2006. 
 
2. 
“Category” means a category set forth in the table in Section IV of Schedule 2 to 
this Agreement. 
 
3. 
“Consultant Guidelines” means the “Guidelines: Selection and Employment of 
Consultants by World Bank Borrowers” published by the Bank in May 2004 and 
revised in October 2006. 
 
4. “DILOS” 
means 
Directorios Locales de Salud
,
created pursuant to the 
Recipient’s Law No. 2426, dated November 21, 2007. 
 
5. “FPS” 
means 
Fondo Nacional de Inversión Productiva y Social
,
the Recipient’s 
national productive and social investment fund established pursuant to Article 14 
of the Recipient’s Supreme Decree No. 25984 of November 16, 2000. 
 
6. 
“FPS Subsidiary Agreement” means the agreement referred to in Section I.A.1 of 
Schedule 2 to this Agreement, pursuant to which the Recipient shall make part of 
the proceeds of the Financing available to FPS. 
 
7. 
“General Conditions” means the “International Development Association 
General Conditions for Credits and Grants”, dated July 1, 2005 (as amended 
through October 15, 2006). 
 
8. 
“Indicators” means the impact and implementation indicators set forth in the 
Operational Manual. 
 
9. 
“Inter-Institutional Agreement” means the agreement referred to in Section I.A.4 
of Schedule 2 to this Agreement. 
 
10. “MSD” 
means 
Ministerio de Salud y Deporte
,
the Recipient’s Ministry of Health 
and Sports. 
 
11. 
“MSD Subsidiary Agreement” means the agreement referred to in Section I.A.3 
of Schedule 2 to this Agreement. 
 
12. 
“Municipality” means en entity with legal personality established pursuant to the 
Recipient’s Law No. 2028, dated October 28, 1999. 
Page  25
24
13. 
“Municipal Agreement” means the agreement referred to in Section I.A.5 of 
Schedule 2 to this Agreement. 
 
14. 
“Operational Manual” means the manual referred to in Section I.C of Schedule 2 
to this Agreement. 
 
15. 
“Procurement Guidelines” means the “Guidelines: Procurement under IBRD 
Loans and IDA Credits” published by the Bank in May 2004 and revised in 
October, 2006. 
 
16. 
“Procurement Plan” means the Recipient’s procurement plan for the Project, 
dated December 12, 2007 and referred to in paragraph 1.16 of the Procurement 
Guidelines and paragraph 1.24 of the Consultant Guidelines, as the same shall be 
updated from time to time in accordance with the provisions of said paragraphs. 
 
17. 
“Procurement Supreme Decree” means the Recipient’s Supreme Decree No. 
29190 (
Decreto Supremo
 Nº 29190) of July 11, 2007, as amended and as in 
effect on the date of this Agreement. 
 
18. “SNIS” 
means 
Sistema Nacional de Información en Salud
,
the Recipient’s 
National Health Information System. 
 
19. “SU 
SALUD” 
means 
Seguro Universal de Salud
,
the Recipient’s universal health 
insurance to be created pursuant to the Recipient’s Bill No.005, dated 2007, 
submitted to the Recipient’s Congress for approval. 
 
20. 
“Target Areas” means the Recipient’s rural Municipalities and poor 
neighborhoods in urban Municipalities which meet the eligibility criteria set forth 
in the Operational Manual to be beneficiaries of the Project. 
21. 
“Technical Area” means the unit within MSD, created pursuant to the Recipient’s 
Resolution No. 1059, dated December 13, 2007. 
 
22. 
“UCOFI” means the administrative unit within MSD which will carry out 
financial management and procurement activities, created pursuant to the 
Recipient’s Resolution No. 1059, dated December 13, 2007.