DominicanRepublic: HIV/AIDS PreventionAnd ControlProject (Loan 7065-DO) ProposedAmendmentto the LoanAgreement 1. This memorandum seeks the approval o f the Executive Directors to amend the Loan Agreement for the HIV/AIDS Prevention And Control Project. The proposed amendment i s inresponse to a request from the Government o f the DominicanRepublic (GODR), on behalfo fthe Dominican Republic (the Borrower), datedMay 28,2004, to permit the reallocation o f loan proceeds to help rehabilitate the health care infrastructure inthe Jimani region, locatedinthe border areawithHaiti, that was severely affectedby devastating floods inM a y 2004. BACKGROUND 2. A Loan in the amount o f US$25 million for the Dominican Republic HIV/AIDS Prevention and Control Project, part o f the first phase o f the Multi Country HIVIAIDS Prevention and Control Adaptable Program Lending (APL) for the Caribbean Region, was approved by the Board o f Directors on June 28, 2001. The objectives o f the Project are to assist GODR in curbing the spread o f HIV/AIDS through the scaling up o f programs and activities targeted to high-risk groups, expanding awareness about HIV/AIDS among the general population, and strengthening institutional capacity to ensure the effectiveness and sustainability o f the effort. 3. Project implementation i s progressing satisfactorily. Since February 2002, when the Loan Agreement became effective, the project has supported GODR's efforts to put inplacethe necessarybuildingblocks for the implementation ofa comprehensive and multisectoral strategy against HIV/AIDS. PROPOSEDAMENDMENT AND RATIONALE 4. The proposed amendment would incorporate the necessary legal provisions, including the expansion o f the Project's breadth o f activity to finance the rehabilitation and re-equipping o f the health care infrastructure inthe Jimani region, and the creation o f a new category o f disbursements to accommodate the above mentioned reallocation o f US$200,000 as requested. 5. The proposed amendments are consistent with the overall objectives o f the Project and can be implemented within its structure. In addition, they are justified inview o f the emergency situation in the Jimani Region, one o f the poorest in the country, that i s hindering the access to basic health services, including HIV/AIDS prevention and control Borrower (Technical Secretariat o f the Presidency and Health Secretariat) and the implementing agency (COPRESIDA), and have been agreed upon. 7. A copy o fthe draft Amendment Letter is available uponrequest. The World Bank 1818 H Street Senderphone INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Washington, DC 20433 SenderFax INTERNATIONAL DEVELOPMENT ASSOCIATION USA June 30,2004 H i s Excellency Carlos Despradel Secretario TCcnico de la Presidencia Secretariado TCcnico de la Presidencia PalacioNacional Avenida MCxico Santo Domingo, Rephblica Dominicana Re: Loan No.7065-DO (HIV/AIDS Preventionand Control Project) Second Amendment to the LoanAneement Excellency: Please refer to the Loan Agreement between the DominicanRepublic (the Borrower) and the International Bank for Reconstruction and Development (the Bank) dated June 29, 2001 with regardto the above-captioned Project (the LoanAgreement). We are pleased to inform you that, pursuant to your letter ofrequest dated May 28, 2004 and our recent discussions on the subject, the Bank hereby agrees to amend the Loan Agreement so as to incorporate appropriate provisions to help the Borrower address the natural disaster emergency situation which recently took place inthe Jimani region. Consequently, the LoanAgreement i s hereby amended as follows: 1. Section 1.02. Paragraph (g) i s hereby amended and replaced to read in its entirety as follows: "(g) "Eligible Categories" means Categories (1) through (6) and Category (10) set forth inthe table inPart A.l o f Schedule 1to this Agreement;" 2. ' Section 1.02. A new definition i s hereby incorporatedto read as follows: "(w) "Emergency Projects" means projects consisting of the provision of the necessary goods, works and services for the rehabilitation of the Borrower's health facilities in the Jimani region, including: rehabilitation o f physical infrastructure; provision o f medical equipment; water purification and the strengtheningo f the biomedical waste management capacity." 3, Schedule 1. The table inparagraphA.1o f Schedule 1i s hereby amended and replacedto read inits entirety as set forth inAnnex 1to this AmendmentLetter. 4. Schedule 2. The first paragraphis hereby amended and replaced to read inits entirety as follows: "The objective o f the Project is to assist the Borrower in: (a) reducing the spread of the HIV/AIDS epidemic through: (i) increase inhealth prevention and control programs targeted the in particular to highrisk groups of population; (ii) expansion of awareness with respect to the -L- HIV/AIDS infection and prevention amongst the Borrower's population; and (iii)the strengthening o f the institutional capacity o f the Participating Entities and the Participating Agencies to ensure the effectiveness and the sustainability of the Project; and (b) carrying out Emergency Projects." 5. Schedule 2. A new Part Di s hereby incorporatedto readinits entirety as follows: "Part D: Emergency Subproiects Carrying out o f Emergency Subprojects" 6. Schedule 4, Section I.Paragraph C.2. i s hereby amended and replaced to read in its entirety as follows: "Shopping Goods (other than the anti-retroviral drug and the baby formula supplements referred to inPartA.4 (a) and (c) ofthe Project, respectively, anti-tuberculosis drugs, vaccines andcondoms) estimated to cost less than $200,000 equivalent per contract, up to an aggregate amount not to exceed $2,790,000 equivalent, may be procured under contracts awarded on the basis o f international or national shopping procedures, at the Borrower's option, in accordance with the provisions o f paragraphs 3.5 and 3.6 o f the Guidelines. 7. Schedule 4, Section I.A new Part C.5 i s hereby incorporated to read in its entirety as follows: "Direct Contracting Works under Emergency Subprojects estimated to cost less than $5,000 equivalent per contract and goods under Emergency Subprojects estimated to cost less than $20,000 equivalent per contract, which the Bank agrees meet the requirements for Direct Contracting may be procured in accordance with the provisions o f said procurement method." 8. Schedule 4, Section I, D 1. (a) i s hereby amended to read inits entirety as follows: Part "Prior Review (a) With respect to: (i) contract for goods to be awarded under Parts B.l and each C.3 o f this Section; (ii)each contract for goods to be awarded under Part C.2 o f this section (iv) each contract for goods and works to be awarded under Part C.5 o f this Section; and (v) the first two contracts for works to be awardedunder Part C.l (b) o f this Section, the procedures set forth inparagraphs 2 and 3 ofAppendix 1to the Guidelines shall apply." Please confirm your agreement with the foregoing amendment by signing and dating this letter inthe spaces provided below. This amendment letter shall be executed in two counterparts each of which shall be an original. -3- Upon confirmation, please return one fully executed original to us. The provisions set forth in this amendment letter shall become effective as of the date o f this letter upon receipt by the Bank o f one fully executed original o f this amendment letter. Very truly yours, INTERNATIONAL BANKFOR RECONSTRUCTION AND DEVELOPMENT BY Caroline Anstey Director Caribbean Country Management Unit Latin America and the CaribbeanRegion AGREED: DOMINICANREPUBLIC By: Name: Date: -4- Annex 1 Amount ofthe % of Loan Allocated Expenditures Category (ExmessedinDollars) to be Financed (1) Works 1,500,000 85% Goods (other thanthe anti-retroviral drug andbaby formula supplementsunder Part A.4 (a) and (c) ofthe Project, respectively, anti-tuberculosis drugs, vaccines, condoms andnon- durable goods) 4,606,000 75% (3) Vaccines, anti- tuberculosis drugs and condoms 3,334,000 80% untildisbursements under this Category havereachedan amount of $2,500,000; and 50% thereafter (4) Consultants' services (a) Information, Educational 1,840,000 80% and Communication Programs (b) Other services under the 7,800,000 100% Project (5) Training 1,840,000 75% (6) Project Administration costs 2,o 00,o 00 80% untildisbursements under this Category havereachedan amount of $1,000,000; and 50% thereafter (7) Fee 250,000 Amount due under Section 2.04'ofthis Agreement -5- Amount of the % of Loan Allocated Expenditures Category {Expressed inDollars) to be Financed Premia for Interest Rate 0 Amount due under Caps and Interest Rate Section 2.09 (d) of Collars this Agreement Unallocated 1,630,000 Goods, works and 200,000 85% consultants' services under Emergengcy Projects TOTAL 25,000,000