CONFORMED COPY
8
CREDIT NUMBER 261 BO
Project Agreement
(Third Livestock Development Project)
BETWEEN
INTERNATIONAL DEVELOPMENT ASSOCIATION
AND
BANCO AGRICOLA DE BOLIVIA
DATED JUNE 25, 1971


CONFORMED COPY
CREDIT NUMBER 261 BO
Project Agreement
(Third Livestock Development Project)
BETWEEN
INTERNATIONAL DEVELOPMENT ASSOCIATION
AND
BANCO AGRICOLA DE BOLIVIA
DATED JUNE 25, 1971


PROJECT AGREEMENT
AGREEMENT, dated        June 25,   1971 between INTERNATIONAL
DEVELOPMENT ASSOCIATION (hereinafter called the Association) and BANCO
AGRICOLA DE BOLIVIA (hereinafter called BAB).
WHEREAS by a development credit agreement of even date herewith between
Republic of Bolivia (hereinafter called the Borrower) and the Association
(hereinafter referred to as the Development Credit Agreement), the Association
has agreed to rmke available to the Borrower an amount in various currencies
equivalent to six million eight hundred thousand dollars ($6,800,000), on the terms
and conditions set forth in the Development Credit Agreement, but only on
condition that BAB agree to undertake such obligations toward the Association
as hereinafter set forth;
WHEREAS by a subsidiary loan agreement between the Borrower and BAB,
the equivalent of up to six million seven hundred thousand dollars ($6,700,000)
out of the proceeds of the credit provided for under the Development Credit
Agreement will be made available to BAB on the terms and conditions therein
set forth; and
WHEREAS BAB, in consideration of the Association's entering into the
Development Credit Agreement with the Borrower, has agreed to undertake the
obligations hereinafter set forth;
NOW THEREFORE the parties hereto hereby agree as follows:
ARTICLE I
Definitions
Section 1.01. Wherever used in this Agreement, unless the context shall
otherwise require, the several terms defined in the Development Credit Agreement
and in the General Conditions (as so defined) have the respective meanings therein
set forth.
ARTICLE II
Execution of the Project
Section 2.01. (a) BAB shall carry out Parts A, B and D of the Project
described in Schedule 2 to the Development Credit Agreement with due diligence


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and efficiency and in conformity with sound agricultural, economic, administrative
and financial practices, and shall provide, or cause to be provided, promptly as
needed, the funds, facilities, services and other resources required for the purpose.
(b)   The operating policies and procedures fof the carrying out of Parts
A, B and D of the Project shall be as set forth in Schedule 3 to the Development
Credit Agreement or as the same may be amended from time to time by agreement
between the Borrower, the Association and BAB, and BAB shall ensure at all times
that said operating policies and procedures are duly carried out.
Section 2.02. In order to assist BAB in the carrying out of Parts A and
B of the Project BAB shall (i) maintain its livestock project division which shall
at all times have an adequate number of qualified staff under the direction of
a qualified and experienced livestock expert (the Project Director) acceptable to
the Association, upon terms and conditions satisfactory to the Association and
BAB, and (ii) maintain a Project Loan Committee whose composition, functions
and responsibilities shall at all times be satisfactory to the Association.
Section 2.03. Except as the Association may otherwise agree, BAB shall cause
all goods and services financed out of the proceeds of the Credit relent to it by
the Borrower to be used exclusively for the Project.
Section 2.04. BAB: (i) shall maintain records adequate to record the progress
of Parts A, B and D of the Project (including the cost thereof) and tc ;dentify
the goods and services financed out of the proceeds of the Credit rel- t o it
by the Borrower, and to disclose the use thereof in the Project; (ii) shail enable
the Association's representatives to inspect the Project, the goods financed out
of such proceeds and any relevant records and documents; and (iii) shall furnish
to the Association all such information as the Association shall reasonably request
concerning the Project, the expenditure of the proceeds of the Credit so relent
to it and the goods and services financed out of such proceeds.
Section 2.05. (a) BAB shall enter into a Subsidiary Loan Agreement with
the Borrower, and shall exercise its rights thereunder in such manner as to protect
the interests of the Borrower, the Association and BAB.
(b)   BAB shall duly perform all its obligations under the Subsidiary Loan
Agreement. Except as the Association shall otherwise agree, BAB shall not take
or concur in any action which would have the effect of amending, abrogating,
assigning or waiving the Subsidiary Loan Agreement or any provision thereof.


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ARTICLE III
Financial Covenants
Section 3.01. BAB shall maintain records adequate to reflect in accordance
with consistently maintained sound accounting practices its operations and financial
condition.
Section 3.02. BAB shall maintain separate accounts in respect of the Project
and (i) have such accounts for each financial year audited, in accordance with
sound auditing principles consistently applied, by independent auditors acceptable
to the Association; (ii) furnish to the Association as soon as available, but in any
case not later than three months after the end of each such year, (A) certified
copies of such audited separate accounts and (B) the report of such audit by said
auditors, of such scope and in such detail as the Association shall have reasonably
requested; and (iii) furnish to the Association such other information concerning
the accounts and financial statements of BAB and the audit thereof as the
Association shall from time to time reasonably request.
Section 3.03. BAB shall use the proceeds of payments received by it on
account of loans granted under the Project, which are not required by BAB to
service the loan from the Borrower under the Subsidiary Loan Agreement or to
meet its expenses arising from the Project, for the purpose of further lending to
ranchers who are recipients of lnans from the proceeds of the Subsidiary Loan
Agreement.
Section 3.04. Except as the Association shall otherwise agree, BAB shall not
prior to the Closing Date incur any debt, other than debt under the Subsidiary
Loan Agreement, for the purpose of providing long-term loans for investment in
ranch development.
ARTICLE IV
Consultation, Information and Inspection
Section 4.01. The Association and BAB shall cooperate fully to assure that
the purposes of the Credit will be accomplished. To that end, the Association3
and BAB shall from time to time, at the request of either party, exchange views
through their representatives with regard to the performance of their respective
obligations under this Agreement, the administration, operations and financial
condition of BAB and other matters relating to the purpose of the Credit.


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Section 4.02. The Association and BAB shall promptly inform each other
of any condition which interferes with, or threatens to interfere with, the
accomplishment of the purposes of the Credit, or the performance by either of
them of its obligations under this Agreement or the performance by the Borrower
and BAB of their respective obligations under the Subsidiary Loan Agreement.
Section 4.03. The Association and BAB shall from time to time exchange
views with respect to the steps undertaken by BAB to increase the number and
responsibility of middle level executive personnel in conformity with sound
management practice.
ARTICLE V
Effective Date; Termination;
Cancellation and Suspension
Section 5.01. This Agreement shall come into force and effect on the date
upon which the Development Credit Agreement becomes effective.
Section 5.02. (a) This Agreement and all obligations of the Association and
of BAB thereunder shall terminate on the earlier of the following two dates:
(i)        the date on which the Development Credit Agreement shall
terminate in accordance with its terms; or
(ii)       the date on which the Subsidiary Loan Agreement terminates
in accordance with its terms.
(b)   If the Development Credit Agreement terminates in accordance with
its terms before the date specified in paragraph (a) (ii) of this Section, the
Association shall promptly notify BAB of this event and, upon the giving of such
notice, this Agreement and all obligations of the parties thereunder shall forthwith
terminate.
Section 5.03. All the provisions of this Agreement shall continue in full force
and effect notwithstanding any partial cancellation or suspension under the
Development Credit Agreement.
ARTICLE VI
Miscellaneous Provisions
Section 6.01. Any notice or request required or permitted to be given or
made under this Agreement and any agreement between the parties contemplated


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by this Agreement shall be in writing. Such notice or request shall be deemed
to have been duly given or made when it shall be delivered by hand or by mail,
telegram, cable, telex or radiogram to the party to which it is required or permitted
to be given or made at such party's address hereinafter specified or at such other
address as such party shall have designated by notice to the party giving such
notice or making such request. The addresses so specified are:
For the Association:
International Development Association
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address:
Indevas
Washington, D.C.
For BAB:
Banco Agricola de Bolivia
Casilla 1179
La Paz, Bolivia
Cable address:
Banagrico
La Paz
Section 6.02. Any action required or permitted to be taken, and any
documents required or permitted to be executed, under this Agreement on behalf
of BAB may be taken or executed by the Presidente and the Gerente General
of BAB or such other person or persons as they shall designate in writing.
Section 6.03. BAB shall furnish to the Association sufficient evidence of
the authority and the authenticated specimen signature of the person or persons
who will, on behalf of BAB, take any action or execute any documents required
or permitted to be taken or executed by BAB pursuant to any of the provisions
of this Agreement.
Section 6.04. This Agreement may be executed in several counterparts, each
of which shall be an original, and all collectively but one instrument.


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IN WITNESS WHEREOF, the parties hereto, acting through their
representatives thereunto duly authorized, have caused this Agreement to be signed
in their respective names and delivered in the District of Columbia, United States
of America, as of the day and year first above written.
INTERNATIONAL DEVELOPMENT ASSOCIATION
By /s/ J. Burke Knapp
Vice President
BANCO AGRICOLA DE BOLIVIA
By /s/ Antonio Sanchez de Lozada
Authorized Representative