Page  1
CONFORMED COPY 
 
LOAN NUMBER 7660-BR 
 
Loan Agreement 
 
(First Programmatic Development Policy Loan for Sustainable Environmental 
Management) 
 
between 
 
FEDERATIVE REPUBLIC OF BRAZIL 
 
and 
 
INTERNATIONAL BANK FOR RECONSTRUCTION 
AND DEVELOPMENT 
 
Dated June 10, 2010  
Page  2
LOAN AGREEMENT 
 
Agreement dated June 10, 2010, entered into between FEDERATIVE REPUBLIC OF 
BRAZIL (
“Borrower”) and INTERNATIONAL BANK FOR RECONSTRUCTION 
AND DEVELOPMENT (“Bank”) for the purpose of providing financing in support of 
the Program (as defined in the Appendix to this Agreement).  The Bank has decided to 
provide this financing on the basis, 
inter alia
,
of: (a) the actions which the Borrower has 
already taken under the Program and which are described in Section I.A of Schedule 1 to 
this Agreement; and (b) the Borrower’s maintenance of an appropriate macro-economic 
policy framework consistent with the objectives of the Program.  The Borrower and the 
Bank therefore 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 
—
LOAN 
 
2.01. 
The Bank agrees to lend to the Borrower, on the terms and conditions set forth or 
referred to in this Agreement, the amount of one billion and three hundred 
million dollars ($1,300,000,000), as such amount may be converted from time to 
time through a Currency Conversion in accordance with the provisions of Section 
2.07 of this Agreement (“Loan”). 
 
2.02. 
The Borrower may withdraw the proceeds of the Loan in support of the Program 
in accordance with Section II of Schedule 1 to this Agreement.
 
2.03. 
The Front-end Fee payable by the Borrower shall be equal to one quarter of one 
percent (0.25%) of the Loan amount.  
 
2.04. 
The interest payable by the Borrower for each Interest Period shall be at a rate 
equal to LIBOR for the Loan Currency plus the Variable Spread; provided, that 
upon a Conversion of all or any portion of the principal amount of the Loan, the 
interest payable by the Borrower during the Conversion Period on such amount 
shall be determined in accordance with the relevant provisions of Article IV of 
the General Conditions.  Notwithstanding the foregoing, if any amount of the 
Page  3
-
2
-
Withdrawn Loan Balance remains unpaid when due and such non-payment 
continues for a period of thirty days, then the interest payable by the Borrower 
shall instead be calculated as provided in Section 3.02 (d) of the General 
Conditions. 
 
2.05. 
The Payment Dates are February 15 and August 15 in each year. 
 
2.06. 
The principal amount of the Loan shall be repaid in accordance with the 
amortization schedule set forth in Schedule 2 to this Agreement. 
 
2.07. 
(a) 
The Borrower may at any time request any of the following Conversions 
of the terms of the Loan in order to facilitate prudent debt management: 
(i) a change of the Loan Currency of all or any portion of the principal 
amount of the Loan, withdrawn or unwithdrawn, to an Approved 
Currency; (ii) a change of the interest rate basis applicable to all or any 
portion of the principal amount of the Loan withdrawn and outstanding 
from a Variable Rate to a Fixed Rate, or vice versa; and (iii) the setting 
of limits on the Variable Rate applicable to all or any portion of the 
principal amount of the Loan withdrawn and outstanding by the 
establishment of an Interest Rate Cap or Interest Rate Collar on the 
Variable Rate. 
 
(b) 
Any conversion requested pursuant to paragraph (a) of this Section that 
is accepted by the Bank shall be considered a “Conversion”, as defined 
in the General Conditions, and shall be effected in accordance with the 
provisions of Article IV of the General Conditions and of the Conversion 
Guidelines.  
 
ARTICLE III 
—
PROGRAM 
 
3.01. 
The Borrower declares its commitment to the Program and its implementation, 
through appropriate institutional arrangements
 with the Borrower’s public 
entities.  To this end, and further to Section 5.08 of the General Conditions: 
 
(a) 
the Borrower and the Bank shall from time to time, at the request of 
either party, exchange views on the progress achieved in carrying out the 
Program and the actions specified in Section I of Schedule 1 to this 
Agreement; 
 
(b) 
prior to each such exchange of views, the Borrower shall furnish to the 
Bank for its review and comment a report on the progress achieved in 
carrying out the Program, in such detail as the Bank shall reasonably 
request; and 
 
Page  4
-
3
-
(c) 
without limitation upon the provisions of paragraphs (a) and (b) of this 
Section, the Borrower shall promptly inform the Bank of any situation 
that would have the effect of materially reversing the objectives of the 
Program or any action taken under the Program, including any action 
specified in Section I of Schedule 1 to this Agreement. 
 
ARTICLE IV 
—
REMEDIES OF THE BANK 
 
4.01. 
The Additional Events of Suspension consist of the following: 
 
(a) 
A situation has arisen which shall make it improbable that the Program, 
or a significant part of it, will be carried out. 
 
(b) 
An action has been taken or a policy has been adopted to reverse any 
action or policy under the Program (including any action listed in Section 
I
of
Schedule 1 to this Agreement) in a manner that would, in the opinion 
of the Bank, adversely affect the achievement of the objectives of the 
Program. 
 
ARTICLE V 
—
EFFECTIVENESS; TERMINATION
 
5.01. 
The Additional Legal Matter consists of the following, namely that the Loan has 
been registered with the Borrower
’s Central Bank. 
 
5.02. 
Without prejudice to the provisions of the General Conditions, the Effectiveness 
Deadline is the date ninety (90) days after the date of this Agreement, but in no 
case later than the eighteen (18) months after the Bank’s approval of the Loan 
which expire on September 5, 2010. 
 
 
ARTICLE VI 
—
REPRESENTATIVE; ADDRESSES
 
6.01. 
The Borrower’s Representative is its Minister of Finance. 
 
6.02. 
The Borrower’s Address is: 
 
Ministério da Fazenda 
 
Procuradoria-Geral da Fazenda Nacional 
 
Esplanada dos Ministérios, Bloco "P" - 8º andar 
 
70048-900 Brasília, DF 
 Brazil 
 
Page  5
-
4
-
Facsimile: (55-61) 3412-1740 
 
6.03. 
The Bank’s Address is: 
 
International Bank for Reconstruction and Development 
1818 H Street, N.W. 
Washington, D.C. 20433 
United States of America 
 
Cable 
address: 
 Telex: 
  Facsimile: 
 
INTBAFRAD  
248423(MCI) 
or 
1-202-477-6391 
Washington, D.C. 
 64145(MCI) 
 
AGREED at Brasília, Federative Republic of Brazil, as of the day and year first above 
written. 
 
FEDERATIVE REPUBLIC OF BRAZIL 
 
By /s/ Suely Dib de Sousa e Silva 
 
Authorized Representative 
 
INTERNATIONAL BANK FOR 
 
RECONSTRUCTION AND DEVELOPMENT 
 
By /s/ Makhtar Diop 
 
Authorized Representative 
Page  6
-
5
-
SCHEDULE 1 
 
Program Actions; Availability of Loan Proceeds 
 
Section I. 
Actions under the
Program
A. 
Actions Taken Under the Program for the First Tranche
.
The actions taken 
by the Borrower under the Program include the following:
 
1. Improving 
the Borrower’s Overall Environmental Management System 
 
(a) 
Improving Environmental and Social Management Procedures 
 
The Borrower has achieved an institutional restructuring in MMA and 
IBAMA, and the creation of 
Instituto Chico Mendes
 and 
Serviço 
Florestal Brasileiro
 aimed at improving the implementation of 
environmental policies, processing of environmental licenses and 
enforcement of environmental regulations in the Borrower’s territory, as 
evidenced through the Borrower’s: (i)  
Decreto Presidencial
 No. 6101 
dated April 26, 2007; (ii) 
Decreto Presidencial
 No. 6.099 dated April 26, 
2007; (iii) Law No. 11.516 dated August 28, 2007; (iv) Law No. 11.284 
dated March 2, 2006; and (v) 
Edital
 No. 8/2005-IBAMA dated August 
25, 2005, 
Edital
 No. 5/2005-MMA dated February 3, 2005, 
Edital
 No. 
6/2008-MMA dated June 18, 2008 and 
Portaria 
No. 1-MMA, dated 
January 31, 2007. 
 
(b) 
Mainstreaming Climate Change in Public and Private Sector 
Investments 
 
The Borrower has prepared and submitted for public consultation in 
September 2008 a draft action plan (
Plano Nacional so
bre Mudança do 
Clima – Versão Para Consulta Pública
), as evidenced through MMA 
Oficio
 No. 16/2009/SECEX/MMA sent to the Bank on January 27, 2009.  
 
(c) 
Improving Environmental and Social Management Effectiveness in 
BNDES and Other Financial Institutions 
 
The Borrower, through MMA, has approved and executed with federal 
public banks (i.e. BNDES, 
Banco da Amazônia, Caixa Econômica 
Federal, Banco do Nordeste do Brasil
 and 
Banco do Brasil
)
a
revised 
protocol (
Protocolo Verde
), as evidenced through 
Protocolo de Intenções 
pela Responsabilidade Socioambiental
 dated August 1, 2008, as 
registered in the Borrower’s official gazette on August 13, 2008. 
 
Page  7
-
6
-
2. 
Integrating Principles of Sustainable Development in Key Sectors 
 
(a) 
Improving Sustainability of Natural Resources Management 
 
The Borrower has adopted a legal framework for improved natural 
resources sustainability in the Borrower’s forests, as evidenced through 
the Borrower’s: (i) Law No. 11.284 dated March 2, 2006; (ii) Law No. 
11.428 dated December 22, 2006; and (iii) 
Resolução
 No. 3545/CMN-
BACEN dated February 29, 2008. 
 
(b) 
Improving Amazon Regional Planning for Sustainable Development 
and Reduced Deforestation 
 
The Borrower has adopted an initiative (
Plano Amazônia Sustentável – 
Diretrizes para o Desenvolvimento Sustentável da Amazônia Brasileira
)
through a c
ommitment executed among the Borrower’s Presidency and 
the Governors of the following States in the Borrower’s territory: 
Amazonas, Amapá, Acre, Pará, Mato Grosso, Tocantins, Roraima, 
Maranhao and Rondônia on May 8, 2008 as evidenced through MMA 
Oficio
 No. 16/2009/SECEX/MMA sent to the Bank on January 27, 2009. 
 
(c) 
Improving Rainforest Conservation 
 
The Borrower has authorized the creation of a fund (
Fundo Amazônia
)
and said fund has been created to support activities that promote 
sustainable use of natural resources, rehabilitation of degraded areas and 
prevention and combat to deforestation, as evidenced through the 
Borrower’s Presidential Decree No. 6.527, dated August 1, 2008 and 
BNDES Resolution No. 1640/2008-BNDES dated September 9, 2008. 
 
(d) 
Improving Management and Quality of Water Resources 
 
The Borrower has approved two national initiatives for water: (i) 
Programa Nacional de Avaliação da Qualidade da Água
,
as evidenced 
through MMA 
Oficio
 No. 16/2009/SECEX/MMA sent to the Bank on 
January 27, 2009; and (ii)
 Plano Nacional de Recursos Hídricos
 as 
evidenced through the Borrower’s Council for Water Resources 
Resolution No. 58 dated January 30, 2006. 
 
(e) 
Reducing Environmental Impacts through Improved Water, 
Wastewater Treatment, and Solid Waste Services 
 
The Borrower has adopted a legal framework for improved water 
sanitation and solid waste service coverage, as evidenced through the 
Borrower’s Law No. 11.445 dated January 5, 2007. 
Page  8
-
7
-
(f) 
Promoting Renewable Energy Potential 
 
The Borrower has enhanced and revised in December 2007 a 
methodology for improving the environmental and social sustainability 
of the hydroelectric sector by adopting an integrated environmental 
assessment, as evidenced through Resolution No. 393/ANEEL dated 
December 4, 1998 (as amended in December 2008) and 
the Borrower’s 
handbook entitled 
Manual de Inventário Hidroelétrico de Bacias 
Hidrográficas, Edição 2007, Ministério de Minas e Energia, Secretaria 
de Planejamento e Desenvolvimento Energético.
 
B. 
Actions to be Taken Under the Program for the Second Tranche
.
The 
actions to be taken by the Borrower under the Program include the following: 
 
1. Improving 
the Borrower’s Overall Environmental Management System  
 
(a) 
Mainstreaming Climate Change in Public and Private Sector 
Investments 
 
The Borrower has approved the 
Plano Nacional sobre Mudança do 
Clima 
(see Section I.A.1(b) of this Schedule), after public consultation, 
in form and substance satisfactory to the Bank. 
 
(b) 
Improving Environmental and Social Management Effectiveness in 
BNDES and Other Financial Institutions 
 
The Borrower has evidenced in form and substance satisfactory to the 
Bank that new environmental and social institutional policy, following, 
inter alia
,
the provisions of 
Protocolo Verde
 (see Section I.A.1(c) of this 
Schedule), has been approved by BNDES Board of Executive Officers, 
and is being applied to operations financed directly by BNDES. 
 
2. 
Integrating Principles of Sustainable Development in Key Sectors 
 
(a) 
Improving Sustainability of Natural Resources Management 
 
The Borrower has evidenced in form and substance satisfactory to the 
Bank that BNDES: (i) has restructured its lending programs on forest 
management, forest plantations, agriculture and associated processing 
industries to provide incentives for long-term forest management and 
sustainable land use; and (ii) has designed three sub-sectoral guidelines 
and its special program on reforestation (
Refloresta
)
to ensure coherence 
with the BNDES new environmental and social institutional policy, as 
referred to in Section I.B.1(b) of this Schedule above, and the 
Borrower’s 
forest legal framework (i.e. the framework comprised of the Borrower’s 
Page  9
-
8
-
Law No. 11.284 dated March 2, 2006; Law No. 11.428 dated December 
22, 
2006; and  Resolução No. 3545/CMN-BACEN dated February 29, 
2008). 
 
(b) 
Improving Management and Quality of Water Resources 
 
The Borrower has evidenced in form and substance satisfactory to the 
Bank that its national water agency (
Agência Nacional de Águas
)
has 
executed cooperation agreements with five States in the Borrower’s 
territory for the purpose of implementing the 
Programa Nacional de 
Avaliação da Qualidade da Água 
(see Section I.A.2(d) of this Schedule), 
at the state level. 
 
(c) 
Reducing Environmental Impacts through Improved Water, 
Wastewater Treatment, and Solid Waste Services 
 
The Borrower has evidenced in form and substance satisfactory to the 
Bank that BNDES ensures that its lending program for water and 
environmental sanitation is consistent w
ith the Borrower’s Law No. 
11.445 dated January 5, 2007 and with the BNDES new environmental 
and social institutional policy referred to in Section I.B.1(b) of this 
Schedule.  
 
(d) 
Promoting Renewable Energy Potential 
 
The Borrower has evidenced in form and substance satisfactory to the 
Bank that BNDES ensures that its lending program for energy efficiency 
and renewable energy is consistent with BNDES new environmental and 
social institutional policy referred to in Section I.B.1(b) of this Schedule. 
 
Section II. 
Availability of Loan Proceeds
A. General. 
 
The Borrower may withdraw the proceeds of the Loan in accordance 
with the provisions of this Section and such additional instructions as the Bank 
may specify by notice to the Borrower. 
 
B. 
Allocation of Loan Amounts.
 
The Loan shall (except for amounts required to 
pay the Front-end Fee) be withdrawn in two tranches.  The allocation of the 
amounts of the Loan to this end is set out in the table below: 
Page  10
-
9
-
Allocations 
Amount of the Loan Tranche Allocated 
(expressed in US Dollars)
 
Front-end Fee 
     3,250,000 
First Tranche 
  796,750,000 
Second Tranche 
  500,000,000 
TOTAL 
AMOUNT 
1,300,000,000 
C. 
Tranche Release Conditions.
 
No withdrawal shall be made of: 
 
1. 
any portion of the First Tranche unless the Bank is satisfied, after an 
exchange of views as described in Sections 3.01 (a) and (b) of this 
Agreement based on evidence satisfactory to the Bank that: (i) the 
macroeconomic policy framework of the Borrower is consistent with the 
objectives of the Program; and (ii) the actions described in Part A of 
Section I of this Schedule, as well as those in the Program, have been 
maintained; and  
 
2. 
any portion of the Second Tranche unless the Bank is satisfied, after an 
exchange of views as described in Sections 3.01 (a) and (b) of this 
Agreement based on evidence satisfactory to the Bank: (i) with the 
progress achieved by the Borrower in carrying out the Program; (ii) that 
the macroeconomic policy framework of the Borrower is consistent with 
the objectives of the Program; and (iii) that the actions described in Part 
B
of
Section I of this Schedule have been taken.  
 
If, after this exchange of views, the Bank is not so satisfied, it may give notice to 
the Borrower to that effect and, if within ninety (90) days after the notice, the 
Borrower has not taken steps satisfactory to the Bank, with respect to paragraphs 
1
and 2 above, then the Bank may, by notice to the Borrower, cancel all or any 
part of the Unwithdrawn Loan Balance. 
 
D. 
Deposits of Loan Amounts.
 
Except as the Bank may otherwise agree:   
 
1. 
all withdrawals from the Loan Account shall be deposited by the Bank 
into an account designated by the Borrower and acceptable to the Bank; 
and 
 
2.  
the Borrower shall: (i) ensure that upon each deposit of an amount of the 
Loan into this account, an equivalent amount is accounted for in the 
Borrower’s budget management system; and (ii) provide a written 
confirmation thereof; all in a manner acceptable to the Bank. 
 
Page  11
-
10
-
E. Excluded 
Expenditures
.
The Borrower undertakes that the proceeds of the 
Loan shall not be used to finance Excluded Expenditures. If the Bank determines 
at any time that an amount of the Loan was used to make a payment for an 
Excluded Expenditure, the Borrower shall, promptly upon notice from the Bank, 
refund an amount equal to the amount of such payment to the Bank. Amounts 
refunded to the Bank upon such request shall be cancelled.
 
F. 
Closing Date.  
The Closing Date is December 31, 2010. 
 
Page  12
-
11
-
SCHEDULE 2 
 
Amortization Schedule 
 
1. 
The following table sets forth the Principal Payment Dates of the Loan and the 
percentage of the total principal amount of the Loan payable on each Principal 
Payment Date (
“Installment Share”).  If the proceeds of the Loan have been fully 
withdrawn as of the first Principal Payment Date, the principal amount of the 
Loan repayable by the Borrower on each Principal Payment Date shall be 
determined by the Bank by multiplying:  (a) Withdrawn Loan Balance as of the 
first Principal Payment Date; by (b) the Installment Share for each Principal 
Payment Date, such repayable amount to be adjusted, as necessary, to deduct any 
amounts referred to in paragraph 4 of this Schedule, to which a Currency 
Conversion applies. 
 
Principal Payment Date 
Installment Share 
(Expressed as a Percentage)
 
On each February 15 and August 15 
 
Beginning February 15, 2015  
 
through August 15, 2038 
 
2.04% 
On February 15, 2039 
2.08% 
2.  
If the proceeds of the Loan have not been fully withdrawn as of the first Principal 
Payment Date, the principal amount of the Loan repayable by the Borrower on 
each Principal Payment Date shall be determined as follows: 
 
(a) 
To the extent that any proceeds of the Loan have been withdrawn as of 
the first Principal Payment Date, the Borrower shall repay the 
Withdrawn Loan Balance as of such date in accordance with paragraph 1 
of this Schedule. 
 
(b) 
Any amount withdrawn after the first Principal Payment Date shall be 
repaid on each Principal Payment Date falling after the date of such 
withdrawal in amounts determined by the Bank by multiplying the 
amount of each such withdrawal by a fraction, the numerator of which is 
the original Installment Share specified in the table in paragraph 1 of this 
Schedule for said Principal Payment Date (“Original Installment Share”) 
and the denominator of which is the sum of all remaining Original 
Installment Shares for Principal Payment Dates falling on or after such 
date, such amounts repayable to be adjusted, as necessary, to deduct any 
amounts referred to in paragraph 4 of this Schedule, to which a Currency 
Conversion applies. 
 
Page  13
-
12
-
3. 
(a) 
Amounts of the Loan withdrawn within two calendar months prior to any 
Principal Payment Date shall, for the purposes solely of calculating the 
principal amounts payable on any Principal Payment Date, be treated as 
withdrawn and outstanding on the second Principal Payment Date 
following the date of withdrawal and shall be repayable on each 
Principal Payment Date commencing with the second Principal Payment 
Date following the date of withdrawal. 
 
(b) 
Notwithstanding the provisions of sub-paragraph (a) of this paragraph, if 
at any time the Bank adopts a due date billing system under which 
invoices are issued on or after the respective Principal Payment Date, the 
provisions of such sub-paragraph shall no longer apply to any 
withdrawals made after the adoption of such billing system.  
 
4. 
Notwithstanding the provisions of paragraphs 1 and 2 of this Schedule, upon a 
Currency Conversion of all or any portion of the Withdrawn Loan Balance to an 
Approved Currency, the amount so converted in the Approved Currency that is 
repayable on any Principal Payment Date occurring during the Conversion 
Period, shall be determined by the Bank by multiplying such amount in its 
currency of denomination immediately prior to the Conversion by either: (i) the 
exchange rate that reflects the amounts of principal in the Approved Currency 
payable by the Bank under the Currency Hedge Transaction relating to the 
Conversion; or (ii) if the Bank so determines in accordance with the Conversion 
Guidelines, the exchange rate component of the Screen Rate.  
 
5. 
If the Withdrawn Loan Balance is denominated in more than one Loan Currency, 
the provisions of this Schedule shall apply separately to the amount denominated 
in each Loan Currency, so as to produce a separate amortization schedule for 
each such amount. 
 
Page  14
-
13
-
APPENDIX 
 
Section I.  Definitions
1. 
“BNDES” means 
Banco Nacional  de Desenvolvimento Econômico e Social – 
BNDES
,
the Borrower’s national bank for economic and social development as 
created and operating under the Borrower’s Law No.  1.628 dated June 20, 1952 
and Law No. 5.662 dated June 21, 1971. 
 
2. 
“Excluded Expenditure” means any expenditure: 
 
(a)  
for goods or services supplied under a contract which any national or 
international financing institution or agency other than the Bank or the 
Association has financed or agreed to finance, or which the Bank or the 
Association has financed or agreed to finance under another loan, credit, 
or grant; 
 
(b) 
for goods included in the following groups or sub-groups of the Standard 
International Trade Classification, Revision 3 (SITC, Rev.3), published 
by the United Nations in Statistical Papers, Series M, No. 34/Rev.3 
(1986) (the SITC), or any successor groups or subgroups under future 
revisions to the SITC, as designated by the Bank by notice to the 
Borrower: 
 
Group
Sub-group Description 
of 
Item 
112  
Alcoholic 
beverages 
121  
Tobacco, 
un-
manufactured, tobacco 
refuse 
122  
Tobacco, 
manufactured 
(whether or not containing 
tobacco substitutes) 
525 
 
Radioactive and associated 
materials 
667 
 
Pearls, precious and 
semiprecious stones, 
unworked or worked 
718  
718.7 
 
Nuclear reactors, and parts 
thereof; fuel elements 
(cartridges), non-
irradiated, for nuclear 
reactors 
728 
728.43  
Tobacco processing 
machinery 
Page  15
-
14
-
897  
897.3 
Jewelry of gold, silver or 
platinum group metals 
(except watches and watch 
cases) and goldsmiths’ or 
silversmiths’ wares 
(including set gems) 
971  
 
Gold, non-monetary 
(excluding gold ores and 
concentrates) 
(c) 
for goods intended for a military or paramilitary purpose or for luxury 
consumption; 
 
(d) 
for environmentally hazardous goods, the manufacture, use or import of 
which is prohibited under the laws of the Borrower or international 
agreements to which the Borrower is a party; 
 
(e) 
on account of any payment prohibited by a decision of the United 
Nations Security Council taken under Chapter VII of the Charter of the 
United Nations; and 
 
(f) 
with respect to which the Bank determines that corrupt, fraudulent, 
collusive or coercive practices were engaged in by representatives of the 
Borrower or other recipient of the Loan proceeds, without the Borrower 
(or other such recipient) having taken timely and appropriate action 
satisfactory to the Bank to address such practices when they occur. 
 
3. 
“First Tranche” means the amount of the Loan allocated to the category entitled 
“First Tranche” in the table set forth in Part B of Section II of Schedule 1 to this 
Agreement. 
 
4. 
“General Conditions” means the “International Bank for Reconstruction and 
Development General Conditions for Loans”, dated July 1, 2005 (as amended 
through February 12, 2008) with the modifications set forth in Section II of this 
Appendix. 
 
5. “IBAMA” 
means 
Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais 
Renováveis
,
the Borrower’s institute for environment and renewable natural 
resources, as created and operating under the Borrower’s Law No. 7.735 dated 
February 22, 1989 as amended through Law No. 11.516 dated August 28, 2007. 
 
6. “
Instituto Chico Mendes
”
means 
Instituto Chico Mendes de Conservação da 
Biodiversidade
,
the 
Borrower’s institute for the conservation of biodiversity, as 
created and operating under the Borrower’s Law 11.516 dated August 28, 2007. 
 
Page  16
-
15
-
7. 
“MMA” means 
Ministério do Meio Ambiente
,
the Borrower’s Ministry of 
Environment. 
 
8. 
“Program” means the program of actions, objectives and policies designed to 
improve the effectiveness and efficiency of policies and guidelines of the 
Borrower’s environmental management system and further integrate principles of 
environmentally sustainable development in the Borrower’s key sectors as set 
forth or referred to in the letter dated February 2, 2009 from the Borrower to the 
Bank declaring the Borrower’s commitment to the execution of the Program 
under this Agreement, and requesting assistance from the Bank in support of the 
Program during its execution. 
 
9. 
“Second Tranche” means the amount of the Loan allocated to the category 
entitled “Second Tranche” in the table set forth in Part B of Section II of 
Schedule 1 to this Agreement. 
 
10. 
“Serviço Florestal Brasileiro” 
means the Borrower
’s national forest service, as 
created and operating under the Borrower’s Law No. 11.284 dated March 2, 
2006. 
 
Section II.  Modifications to the General Conditions
The modifications to the General Conditions are as follows:   
 
1. 
The last sentence of paragraph (a) of Section 2.03 (relating to Applications for 
Withdrawal) is deleted in its entirety. 
2. 
Sections 2.04 (
Designated Accounts)
 and 2.05 (
Eligible Expenditures
)
are deleted 
in their entirety, and the remaining Sections in Article II are renumbered 
accordingly. 
 
3. 
Paragraph (a) of Section 2.05 (renumbered as such pursuant to paragraph 2 
above) is modified to read as follows:  
 
“Section 2.05. 
Refinancing Preparation Advance; Capitalizing Front-end Fee 
and Interest 
 
(a) 
If the Loan Agreement provides for the repayment out of the 
proceeds of the Loan of an advance made by the
 
Bank or the Association 
(“Preparation Advance”), the Bank shall, on behalf of such Loan Party, withdraw 
from the Loan Account on or after the Effective Date the amount required to 
repay the withdrawn and outstanding balance of the advance as at the date of 
such withdrawal from the Loan Account and to pay all accrued and
 
unpaid 
charges, if any,
 
on
the advance as at such date.  The Bank shall pay the amount 
so withdrawn to itself or the Association, as the case may be, and shall cancel the 
remaining unwithdrawn amount of the advance.” 
Page  17
-
16
-
4. 
Sections 5.01 (
Project Execution Generally
), and 5.09 (
Financial Management; 
Financial Statements; Audits
)
are deleted in their entirety, and the remaining 
Sections in Article V are renumbered accordingly. 
 
5. 
Paragraph (a) of Section 5.05 (renumbered as such pursuant to paragraph 4 above 
and relating to 
Use of Goods, Works and Services
)
is deleted in its entirety. 
 
6. 
Paragraph (c) of Section 5.06 (renumbered as such pursuant to paragraph 4 
above) is modified to read as follows: 
 
“Section 5.06. 
Plans; Documents; Records 
 
…
(c) 
The Borrower shall retain all records (contracts, orders, 
invoices, bills, receipts and other documents) evidencing expenditures 
under the Loan until two years after the Closing Date. The Borrower 
shall enable the Bank’s representatives to examine such records.” 
 
7. 
Paragraph (c) of Section 5.07 (renumbered as such pursuant to paragraph 4 
above) is modified to read as follows: 
 
Section 5.07. 
Program Monitoring and Evaluation 
 
…
(c)  
The Borrower shall prepare, or cause to be prepared, and 
furnish to the Bank not later than six months after the Closing Date, a 
report of such scope and in such detail as the Bank shall reasonably 
request, on the execution of the Program, the performance by the Loan 
Parties and the Bank of their respective obligations under the Legal 
Agreements and the accomplishment of the purposes of the Loan. 
 
8. 
The following terms and definitions set forth in the Appendix are modified or 
deleted as follows, and the following new terms and definitions are added in 
alphabetical order to the Appendix as follows, with the terms being renumbered 
accordingly: 
 
(a) 
The definition of the term “Eligible Expenditure” is modified to read as 
follows:   
 
“‘Eligible Expenditure’ means any use to which the Loan is put in 
support of the Program, other than to finance expenditures excluded 
pursuant to the Loan Agreement.” 
 
(b) 
The definition of the term “Conversion Date” is modified to read as 
follows: 
Page  18
-
17
-
“‘Conversion Date’ means, in respect of a Conversion, the Execution 
Date (as herein defined) or such other date as requested by the Borrower 
and accepted by the Bank, on which the Conversion enters into effect, 
and as further specified in the Conversion Guidelines.” 
 
(c) 
The term “Financial Statements” and its definition are deleted in their 
entirety. 
 
(d) 
The term “Project” is modified to read “Program” and its definition is 
modified to read as follows (and all references to “Project” throughout 
these General Conditions are deemed to be references to “Program”):  
 
“‘Program’ means the program referred to in the Loan Agreement in 
support of which the Loan is made.”  
 
(e) 
The term “Program Preparation Advance” (renamed as such pursuant to 
subparagraph 8 (d) above) is modified to read “Preparation Advance” 
and its definition is modified to read as follows: 
 
“‘Preparation Advance’ means the advance referred to in the Loan 
Agreement and repayable in accordance with Section 2.05.”