The state guarantee granted through a State Guarantee Contract between the Government of Costa Rica and the Inter-American Development Bank (IDB), for Loan Contract No. 2493/OC-CR, signed between the Costa Rican Institute of Aqueducts and Sewers (AyA) and the Inter-American Development Bank (IDB), on September 26, 2012, in San José, Costa Rica, for an amount up to seventy-three million dollars of the United States of America (US$73,000,000) to finance the Potable Water and Sanitation Program, is approved.
The texts of the referenced guarantee contract, the loan contract, and their annexes, which are attached below, form an integral part of this law.
"Loan No. 2493/OC-CR Resolution DE-232/10 GUARANTEE CONTRACT between THE REPUBLIC OF COSTA RICA and THE INTER-AMERICAN DEVELOPMENT BANK Loan to the Costa Rican Institute of Aqueducts and Sewers Potable Water and Sanitation Program September 26, 2012 LEG/SGO/CID/IDBDOCS#35412202 GUARANTEE CONTRACT CONTRACT executed on the 26th day of September 2012 between the REPUBLIC OF COSTA RICA, hereinafter referred to as the "Guarantor", and the INTER-AMERICAN DEVELOPMENT BANK, hereinafter referred to as the "Bank".
BACKGROUND In accordance with Loan Contract No. 2493/OC-CR, hereinafter referred to as the "Loan Contract", executed on this same date and place, between the Bank and the COSTA RICAN INSTITUTE OF AQUEDUCTS AND SEWERS, of the Republic of Costa Rica, hereinafter referred to as the "Borrower", the Bank agreed to provide financing to the Borrower from the resources of the Single Currency Facility of the Bank's ordinary capital, up to a sum of seventy-three million dollars of the United States of America (US$73,000,000), forming part of said resources, provided that the Guarantor jointly and severally guarantees the obligations of the Borrower stipulated in said Contract.
BY VIRTUE OF THE FOREGOING BACKGROUND, the contracting parties agree as follows:
1. The Guarantor shall become the joint and several guarantor of all the obligations contracted by the Borrower in the referenced Loan Contract, which the Guarantor declares to know in all its parts.
2. The Guarantor undertakes to provide, or cause to be provided, the additional national resources that may be necessary for the complete and uninterrupted execution of the Program referred to in the Loan Contract, when the resources provided for such purpose are insufficient or are not available in a timely manner.
3. The Guarantor undertakes, in the event that it grants any lien on its fiscal assets or revenues as security for an external debt, to simultaneously constitute a lien that guarantees to the Bank, on an equal and proportional footing, the fulfillment of the obligations contracted in this Contract. The foregoing provision shall not apply, however: (i) to liens on assets purchased to secure the payment of the unpaid balance of the price; and (ii) to liens agreed upon in banking transactions to guarantee the payment of obligations whose maturities do not exceed one year.
For the purposes of this contract, the expression "fiscal assets or revenues" means all kinds of assets or revenues belonging to the Guarantor or to any of its dependencies that are not autonomous entities with their own equity.
4. The Guarantor undertakes to:
(a) Cooperate in the fulfillment of the objectives of the Financing.
(b) Inform the Bank as soon as possible of any event that hinders or could hinder the achievement of the purposes of the Financing or the fulfillment of the Borrower's obligations.
(c) Provide the Bank with any information that it reasonably requests regarding the status of the Borrower.
(d) Facilitate for the Bank's representatives the exercise of their functions related to the Loan Contract and the execution of the Program.
(e) Inform the Bank as soon as possible in the event that, in compliance with its obligations as joint and several guarantor, it is making the payments corresponding to the Loan service.
5. The Guarantor undertakes to ensure that both the principal and the interest and other charges of the Loan are paid without any deduction or restriction whatsoever, free of all taxes, duties, rights, or surcharges that are or may be established by the laws of the Republic of Costa Rica, and that both this Contract and the Loan Contract are exempt from all taxes, duties, or rights applicable to the execution, registration, and enforcement of the contracts.
6. The responsibility of the Guarantor shall only be extinguished by the fulfillment of the obligations contracted by the Borrower, and it may not claim in discharge of its responsibility that the Bank has granted extensions or concessions to the Borrower or that it has omitted or delayed the exercise of its actions against the Borrower.
7. Delay in the exercise of the Bank's rights accorded in this Contract, or the omission thereof, may not be interpreted as a waiver of such rights, nor as an acceptance of the circumstances that would have enabled it to exercise them.
8. Any dispute that arises between the parties concerning the interpretation or application of this Contract and that is not resolved by agreement between them shall be submitted to the decision of the Arbitration Tribunal in the manner established in Chapter IX of the General Conditions of the Loan Contract. For the purposes of arbitration, any reference to the Borrower in said Chapter shall be understood to apply to the Guarantor. If the dispute involves both the Borrower and the Guarantor, both must act jointly designating a single arbitrator.
9. Any notice, request, or communication between the parties in accordance with this Contract must be made without any exception in writing and shall be considered as given, made, or sent by one party to the other when it is delivered by any usual means of communication to the following addresses:
To the Guarantor:
Postal address:
Ministerio de Hacienda Avenida 2da. Calles 3 y 5 San José, Costa Rica Facsimile:
(506) 255-4874 To the Bank:
Postal address:
Banco Interamericano de Desarrollo 1300 New York Avenue N.W.
Washington, D.C. 20577 USA Facsimile:
(202) 623-3096 IN WITNESS WHEREOF, the Guarantor and the Bank, each acting through its duly authorized representative, sign this Contract in three (3) counterparts of equal content in San José, Costa Rica on the date indicated above.
REPÚBLICA DE COSTA RICA __________________________ Edgar Ayales Esna Ministro de Hacienda BANCO INTERAMERICANO DE DESARROLLO ________________________ Fernando Quevedo Representante del Banco en Costa Rica Resolution DE-232/10 LOAN CONTRACT No. 2493/OC-CR between THE COSTA RICAN INSTITUTE OF AQUEDUCTS AND SEWERS and THE INTER-AMERICAN DEVELOPMENT BANK Potable Water and Sanitation Program September 26, 2012 LEG/SGO/CID/IDBDOCS#35412193 LOAN CONTRACT SPECIAL CONDITIONS INTRODUCTION Parties, Purpose, Integral Elements, Executing Agency, and Guarantee 1. PARTIES AND PURPOSE OF THE CONTRACT CONTRACT executed on the 26th day of September 2012 between the COSTA RICAN INSTITUTE OF AQUEDUCTS AND SEWERS, of the Republic of Costa Rica, hereinafter referred to interchangeably as the "Borrower" or "AyA", and the INTER-AMERICAN DEVELOPMENT BANK, hereinafter referred to as the "Bank", to cooperate in the execution of a program for potable water and sanitation, hereinafter referred to as the "Program".
The Sole Annex details the most relevant aspects of the Program.
2. INTEGRAL ELEMENTS OF THE CONTRACT AND REFERENCE TO THE GENERAL CONDITIONS (a) This Contract is comprised of these Special Conditions, the General Conditions, the Sole Annex, and Appendices I and II, which are attached. If any provision of the Special Conditions, the Annex, or the Guarantee Contract is not consistent or is in contradiction with the General Conditions, the provisions of the Special Conditions, the Annex, the respective Appendix, or the Guarantee Contract, as applicable, shall prevail. When there is a lack of consistency or a contradiction between provisions of the Special Conditions, the Annex, the Appendices, or the Guarantee Contract, the principle shall prevail that the specific provision prevails over the general one.
(b) In the General Conditions, the procedural provisions relating to the application of the clauses on amortization, interest, credit commission, inspection and supervision, and disbursements, as well as other provisions related to the execution of the Program, are established in detail. The General Conditions also include definitions of a general nature.
3. EXECUTING AGENCY The parties agree that the execution of the Program and the utilization of the resources of the Bank's financing shall be carried out by the Borrower, which for the purposes of this Contract shall also be referred to as the "Executing Agency" (Organismo Ejecutor).
4. GUARANTEE This Contract is subject to the condition that the REPUBLIC OF COSTA RICA, hereinafter referred to as the "Guarantor", jointly and severally guarantees to the full satisfaction of the Bank the obligations contracted by the Borrower and directly assumes those corresponding to it in accordance with the Guarantee Contract.
5. SPECIAL DEFINITIONS For the purposes of the provisions of Chapter IV of these Special Conditions, the parties agree to adopt the following definitions:
(a) "Calculation Agent": Means the Bank for the purposes of the Special Conditions of this Contract. All determinations made by said agent shall be final, conclusive, and binding upon the parties (except for manifest error), and shall be made, with documented justification, in good faith and in a commercially reasonable manner.
(b) "Currency of Denomination": The legal tender currency in the Republic of Costa Rica (also interchangeably referred to as "Costa Rican Colones" or "CRC").
(c) "Currency of Payment": Dollars of the United States of America ("dollars") or CRC, to be determined in the Conversion Notification Letter (Carta Notificación de Conversión).
(d) "Interest Payment Convention": A convention for counting days, to be used for the calculation of interest payments, to be established in the Conversion Notification Letter.
(e) "Conversion Date": For new converted disbursements, it is the effective date of disbursement; for Conversions of outstanding balances, it is the date on which the debt is redenominated. These dates shall be established in the Conversion Notification Letter.
(f) "Conversion Term": means the amortization term of each Conversion into CRC made in accordance with Clause 4.04 of these Special Conditions. Depending on market conditions, the Conversion Term may be equal to or less than the original amortization term of the Financing provided in Clause 2.01 of these Special Conditions.
(g) "Payment Valuation Date": the date is a certain number of business days (to be determined in the Conversion Notification Letter) before any payment date for amortization, interest, or both, as the case may be.
(h) "Banking Business Day": To be defined in the "Conversion Notification Letter".
(i) "WAL" (Weighted Average Life): is calculated, in years (using two decimals), based on the amortizations of all Conversions of the Loan reported in the Conversion Notification Letter and is defined as the division between (A) and (B) where:
(A) is the sum of the products of (i) and (ii), defined as:
(i) the amount of each amortization payment; (ii) the difference in the number of days between the amortization payment date established in the Conversion Notification Letter and the signing date of the Loan Contract, divided by 365 days; and (B) is the total converted amount.
The formula to be applied is as follows:
where:
WAL is the weighted average life of the Conversions, in years.
m is the total number of conversions made.
n is the total number of amortization payments established in the Conversion Notification Letter.
Aji is the amortization i referring to Conversion j, calculated in dollars.
FPji is the payment date of the i-th amortization of the j-th Conversion.
FS is the signing date of the loan contract.
MTC is the total converted amount, calculated in dollars, as stipulated in the Conversion Notification Letter.
(j) "CRC/Dollar Exchange Rate": It is equal to the exchange rate to be defined for each Payment Valuation Date in the Conversion Notification Letter.
(k) "Type of Interest Rate": An interest rate, as has been selected by the Borrower in the Conversion Request Letter (Carta Solicitud de Conversión), and established in the Conversion Notification Letter.
Cost, Financing, and Additional Resources CLAUSE 1.01. Cost of the Program. The total cost of the Program is estimated at the equivalent of three hundred twenty million one hundred thousand dollars of the United States of America (US$320,100,000). Said cost includes, in addition to the present financing of seventy-three million dollars of the United States of America (US$73,000,000) referred to in Clause 1.02 below, and the additional resources provided for in Clause 1.04 of these Special Conditions, which include the equivalent of one hundred fifty million dollars (US$150,000,000) from Loan Contract No. CR-P4 of the Japan International Cooperation Agency and a local counterpart contribution from the Borrower equivalent to seventy-seven million one hundred thousand dollars (US$77,100,000), the resources from the non-reimbursable financing No. GRT/WS-12604-CR from the Spanish Cooperation Fund for Water and Sanitation in Latin America and the Caribbean, for an amount equivalent to twenty million dollars (US$20,000,000). Unless otherwise expressed in this Contract, hereinafter the term "dollars" means the legal tender currency in the United States of America.
CLAUSE 1.02. Amount of the financing. Under the terms of this Contract, the Bank undertakes to grant to the Borrower, and the latter accepts, a financing, hereinafter referred to as the "Financing", from the resources of the Single Currency Facility of the Bank's ordinary capital, up to a sum of seventy-three million dollars (US$73,000,000), forming part of said resources. The amounts disbursed from this Financing shall constitute the "Loan". The Loan shall be a Loan from the Single Currency Facility with a LIBOR-Based Interest Rate.
CLAUSE 1.03. Availability of currency. Notwithstanding the provisions of Clauses 1.02 and 3.01(a), if the Bank does not have access to the agreed Single Currency (Moneda Única), the Bank, in consultation with the Borrower, shall disburse another Single Currency of its choice. The Bank may continue making disbursements in the Single Currency of its choice while the lack of access to the agreed currency continues. Amortization payments shall be made in the Single Currency disbursed, with the financial charges corresponding to that Single Currency.
CLAUSE 1.04. Additional resources. The amount of additional resources that, in accordance with Article 6.04 of the General Conditions, the Borrower undertakes to contribute in a timely manner for the complete and uninterrupted execution of the Program, is estimated at the equivalent of two hundred twenty-seven million one hundred thousand dollars (US$227,100,000), without this estimate implying any limitation or reduction of the Borrower's obligation in accordance with said Article. This amount includes the equivalent of one hundred fifty million dollars (US$150,000,000) from Loan Contract No. CR-P4 of the Japan International Cooperation Agency.
Amortization, Interest, Inspection and Supervision, and Credit Commission CLAUSE 2.01. Amortization. The Loan shall be amortized by the Borrower through semi-annual, consecutive, and, as far as possible, equal installments. The first installment shall be paid six and a half (6 1/2) years from the effective date of this Contract, taking into account the provisions of Article 3.01 of the General Conditions, and the last no later than twenty-five (25) years from the date of signature of this Contract.
CLAUSE 2.02. Interest. (a) The Borrower shall pay interest on the daily outstanding balances of the Loan at a rate to be determined in accordance with the stipulations of Article 3.04 of the General Conditions for a Loan from the Single Currency Facility with a LIBOR-Based Interest Rate. The Bank shall notify the Borrower, as soon as possible after its determination, of the interest rate applicable during each Quarter.
(b) Interest shall be paid to the Bank semi-annually, commencing six (6) months from the effective date of this Contract, taking into account the provisions of Article 3.01 of the General Conditions.
(c) The Borrower, with the consent of the Guarantor, may request the conversion of part or all of the outstanding balance of the Loan with a LIBOR-Based Interest Rate to a Fixed Interest Rate or the reconversion of part or all of the outstanding balance of the Loan with a Fixed Interest Rate to a LIBOR-Based Interest Rate, in accordance with the provisions of Article 3.04 of the General Conditions of this Contract.
CLAUSE 2.03. Resources for general inspection and supervision. During the disbursement period, no resources from the Financing amount shall be allocated to cover the Bank's expenses for general inspection and supervision, unless the Bank establishes otherwise during said period as a result of its periodic review of financial charges in accordance with the applicable provisions of the Bank's policy on the methodology for calculating charges for ordinary capital loans and notifies the Borrower accordingly. Under no circumstances may more than the amount resulting from applying 1% to the Financing amount, divided by the number of semesters comprised in the original disbursement period, be charged for this concept in any given semester.
CLAUSE 2.04. Credit commission. The Borrower shall pay a Credit Commission at a percentage to be established by the Bank periodically, as a result of its review of financial charges, in accordance with the applicable provisions of the Bank's policy on methodology for calculating charges for ordinary capital loans; without it being possible, in any case, to exceed the percentage provided in Article 3.02 of the General Conditions.
Disbursements CLAUSE 3.01. Currencies of disbursements and use of funds. (a) The Financing amount shall be disbursed in dollars forming part of the Single Currency Facility of the Bank's ordinary capital resources, to pay for works, goods, and services (other than consulting services) and consultants acquired through national and international competition, and for the other purposes indicated in this Contract.
(b) The Financing resources may only be used for the payment of works, goods, and services (other than consulting services) and consultants originating from the Bank's member countries.
CLAUSE 3.02. Special conditions precedent to the first disbursement. The first disbursement of the Financing is conditioned upon the fulfillment, to the Bank's satisfaction, in addition to the conditions precedent stipulated in Article 4.01 of the General Conditions, of the following requirements:
(a) That the Borrower has presented evidence of the creation of the Program Coordinating Unit (Unidad Coordinadora del Programa, UCP) and the hiring of the minimum essential personnel for its operation, as well as the designation of the units responsible for the execution of the Program components.
(b) That the Borrower has presented evidence of the approval and entry into force of the Operational Regulations (Reglamento Operativo) to be applied to the Program, in accordance with the terms and conditions previously agreed with the Bank.
(c) That the Borrower has presented evidence of compliance with the conditions precedent to the first disbursement established in the Non-Reimbursable Financing Agreement No. GRT/WS-12604-CR.
(d) That the Borrower has presented evidence of the entry into force of the amendment to Loan Contract No. CR-P04 of the Japan International Cooperation Agency, including the new investment categories for said financing.
(e) That the Borrower has presented a proposal for resettlement (reasentamiento) actions, describing the planned actions and the schedule for the implementation of the resettlement of families affected by the works included in the Program, prepared in accordance with the principles established in the Bank's Operational Policy 710, and the provisions of the Environmental and Social Analysis of the Program (Análisis Ambiental y Social del Programa, AAS), as well as the Environmental and Social Management Plan (Plan de Gestión Ambiental y Social, PGAS) and the Operational Regulations (RO) of the Program.
CLAUSE 3.03. Reimbursement of expenses from the Financing. With the Bank's acceptance, resources from the Financing may be used to reimburse expenses incurred or finance those incurred in the Program from December 14, 2010, until the effective date of this Contract, provided that requirements substantially analogous to those established in this same instrument have been met.
CLAUSE 3.04. Disbursement period. The period for finalizing the disbursements of the Financing resources shall be six (6) years, counted from the effective date of this Contract.
CLAUSE 3.05. Exchange rate. For purposes of the stipulations of Article 3.06 (b) of the General Conditions of this Contract, the parties agree that the applicable exchange rate shall be that indicated in subsection b(ii) of said Article. Consequently, the reference exchange rate for the sale, applicable on the day the Borrower or any other natural or legal person to whom the power to make expenditures has been delegated, makes the respective payments to the contractor or supplier, shall be applied.
Currency Conversion CLAUSE 4.01. Currency Conversion Option ("Conversion"). (a) The Borrower has the option of requesting the Conversion of disbursements, as well as the outstanding balances of the Loan, from dollars to CRC, in accordance with the provisions of Clause 4.04 of these Special Conditions. In the case of outstanding balances, the Conversion may only be carried out provided that, in accordance with Clause 2.03 of these Special Conditions, the Borrower has selected the LIBOR-Based Interest Rate as the interest rate applicable to the Financing.
(b) If, subject to market conditions, the Bank executes said Conversion in accordance with what is specified in Clause 4.05 of these Special Conditions, the total of the converted amounts from this Financing shall constitute the "Outstanding Balance Denominated in CRC". Amortization and interest payments shall be made in dollars at the Dollar/CRC Exchange Rate or in CRC as specified in the Conversion Notification Letter.
(c) The Conversion request may be made in units of CRC when the Currency of Payment is CRC or in units of dollars, when the Currency of Payment is dollars, and the exchange rate applicable to said Conversion shall be established in the Conversion Notification Letter, which must be that published by a price provider, or determined by the Calculation Agent, as the case may be, at the time the Bank's funding transaction is carried out. In the event that the Bank can use its effective funding cost to determine the Base Interest Rate (as defined in Clause 4.03 of these Special Conditions), the amount disbursed in CRC shall be net of the payment of commissions and other charges related to said Bank funding and may be adjusted to reflect premiums or discounts related to the Bank's funding, when these are applicable. In the case of a Conversion of an outstanding Loan balance, on the date of the Conversion, the Borrower must pay or receive in payment, as the case may be, the amounts established in the Conversion Notification Letter related to said commissions, expenses, premiums, or discounts.
(d) For the purposes of the provisions of literal (a) above, unless the Borrower and the Bank agree otherwise, the Borrower may not make Conversions for amounts less than the CRC equivalent of three million dollars (US$3,000,000), except for the last disbursement, in the event that the undisbursed portion of the Financing is smaller.
CLAUSE 4.02. Amortization in case of Currency Conversion. (a) At the time of requesting a Conversion of a disbursement, the Borrower may have the flexibility to modify the corresponding original payment schedule with respect to the final payment term and the WAL, subject to the condition that, at any time, the final amortization term and the WAL calculated on all the amortization schedules of Conversions do not exceed those established originally in this Loan Contract (final amortization term: twenty-five (25) years and a WAL of 15.75 years).
(b) Full-Term or Partial-Term Conversions (described in Clause 4.05(e) of these Special Conditions) of the outstanding Loan balance may be made during the Loan disbursement period as stipulated in Clause 3.04 of these Special Conditions with the same flexibility as the Conversion of disbursements. However, once the Loan disbursement period has ended, Full-Term or Partial-Term Conversions of the outstanding Loan balance shall have the additional limitation that the outstanding Loan balance established in the new modified amortization schedules may not, at any time, exceed the outstanding Loan balance under the original amortization schedule, taking into account the exchange rate established in the Conversion Notification Letter.
(c) In the event that the Borrower exercises the Conversion option in accordance with the provisions of Clause 4.04 of these Special Conditions, the amortization schedule shall be established at the time of each Conversion and reported in the Conversion Notification Letter, and may not be subject to changes, except in the case of prepayments as stipulated in Clause 4.09 of these Special Conditions. In the amortization schedule indicated by the Borrower in the Conversion Request Letter, the payment of monthly, quarterly, semi-annual, annual installments, or a single amortization on the maturity date ("bullet"), or any other amortization profile preferred by the Borrower, may be indicated, provided it is operationally possible for the Bank and the final term of the new amortization schedule of the Conversion is equal to or less than the final term of the original Financing provided in Clause 2.01 of these Special Conditions, and the restrictions indicated in subsections (a) and (b) of this Clause must be observed.
(d) Amortization payments shall be confirmed in the Conversion Notification Letter.
CLAUSE 4.03. Interest in case of Currency Conversion. (a) In the event that the Borrower requests a Conversion and the Bank executes it, the Bank shall indicate, through the Conversion Notification Letter, the Type of Interest Rate, the Convention for Interest Payment, and the interest payment schedule (which may be annual, semi-annual, quarterly, or monthly), according to the conditions proposed by the Borrower in the corresponding Conversion Request Letter.
(b) The interest rate applicable to each Conversion to CRC shall be equal to: (i) the Base Interest Rate (Tasa Base de Interés), plus (ii) the Applicable Margin for Ordinary Capital Loans.
(c) The Base Interest Rate shall be determined based on: (i) the Interest Rate Type; (ii) the amortization schedule; (iii) the Conversion Date; and (iv) the nominal amount of each Conversion, in accordance with the prevailing market conditions on the date the Bank obtains its financing. For these purposes, the Base Interest Rate may be:
(A) The cost in CRC equivalent to the sum of: (i) the 3-month dollar LIBOR rate, plus (ii) a margin reflecting the estimated cost of the Bank's funding in dollars existing at the time of disbursement or Conversion; or (B) The effective cost of the Bank's financing obtained in CRC, used as the basis for the Conversion, to the extent operationally possible.
(d) The Lending Rate for Ordinary Capital Loans shall be established periodically by the Bank in accordance with Article 3.04 of the General Conditions, expressed in basis points (bps).
(e) The amount of interest payable on each payment date shall be (i) an amount in CRC; or (ii) an amount in dollars equal to the amount of interest denominated in CRC divided by the CRC/dollar exchange rate, and shall be calculated in accordance with the provisions of the Conversion Notification Letter.
CLAUSE 4.04. Exercise of the Conversion Option. (a) For purposes of exercising the conversion (conversión) option described in Clause 4.01 of these Special Stipulations, the Borrower shall deliver to the Bank a Conversion Request Letter, indicating the financial terms and conditions required for each conversion (conversión). The form of the referenced letter is attached as Appendix I to this Agreement and forms an integral part hereof.
(b) The Bank shall confirm the financial terms and conditions requested by the Borrower for each conversion (conversión) in a Conversion Notification Letter, delivered by the Bank to the Borrower, the form of which is attached as Appendix II to this Agreement and likewise forms an integral part hereof.
(c) The Borrower acknowledges that the feasibility of the Bank carrying out the conversions (conversiones) will depend on prevailing market conditions and its ability to obtain its financing in accordance with its own policies.
(d) In the event the Bank executes a conversion (conversión), the general inspection and supervision fees and the credit commission provided for in this Agreement shall continue to accrue in accordance with Clauses 2.04 and 2.05 of these Special Stipulations.
(e) The Borrower, in the Conversion Request Letter, shall request:
(A) A payment schedule, under which the amortization term may: (i) have an amortization term equal to the original amortization term of the Loan, or (ii) have a term shorter than the referenced original amortization term; in accordance with the WAL restriction; and (B) A Conversion Term: (i) equal to the term provided in the requested payment schedule (Full Term Conversion), or (ii) shorter than the term provided in the requested schedule (Partial Term Conversion). In the case of a Partial Term Conversion, the Bank shall establish in the Conversion Notification Letter the payment schedule until the end of the conversion (conversión) term, as well as the balance exceeding said term, which must necessarily correspond to the terms and conditions of the Unimonetary Facility, the interest rate being selected in accordance with Clause 2.03 of these Special Stipulations.
(f) In a Partial Term Conversion, the Borrower may request, by means of a Conversion Request Letter, within a period of not less than 15 calendar days before the maturity of the Partial Term Conversion, one of the following options:
(i) Carry out a new conversion (conversión). The outstanding balance of this new conversion (conversión) shall have the limitation that the new amortization schedule may not exceed, at any time, the outstanding balance of the amortization schedule requested in the corresponding original conversion (conversión). If it is possible, subject to market conditions, to carry out a new conversion (conversión), the outstanding balance of the originally converted amount shall remain denominated in CRC, applying a new interest rate that reflects the market conditions prevailing at that time, without applying a new Conversion Fee; (ii) Maintain the remaining outstanding balance in dollars in accordance with the original schedule established in the Conversion Notification Letter; or (iii) Pay the outstanding balance of the amount reconverted to dollars, by prior written notice to the Bank, without prejudice to the provisions of Article 3.11 of the General Conditions.
(g) In the event that the outstanding balance of the converted amount is reconverted to dollars for any of the reasons set forth above, this reconversion shall be made on the Valuation Date prior to the maturity of the respective Partial Term Conversion, and the reconverted outstanding balances shall be subject to the terms and conditions of the Unimonetary Facility, the interest rate being selected in accordance with Clause 2.03 of these Special Stipulations. In this case, the Bank shall inform the Borrower, at the end of the Conversion Term, of the values reconverted to dollars, as well as the corresponding exchange rate.
(h) The outstanding balance reconverted to dollars may, once the Conversion Term has expired, be the subject of a new Conversion Request to CRC. Provided that the Bank has access to obtain its financing in CRC, and that the interest rate selected in accordance with Clause 2.03 of these Special Stipulations is the LIBOR-Based Interest Rate, the Borrower may, using the regular procedures for conversion (conversión) of the Loan's outstanding balances, request another conversion (conversión) to CRC of the outstanding balance of the amount previously reconverted to dollars, under the market conditions prevailing at that time.
(i) Upon the maturity of a Full Term Conversion, the Borrower shall pay in full the outstanding balance of the converted amount of said conversion (conversión), and may not request a new conversion (conversión) nor reconvert to dollars the outstanding balance associated with said conversion (conversión).
(j) If the Bank fails to obtain the necessary financing to proceed with the conversion (conversión) under the conditions requested by the Borrower in the Conversion Request Letter, said Letter shall be considered null and void, without prejudice to the Borrower's right to submit a new Conversion Request Letter.
CLAUSE 4.05. Quotation Disruption Events. The parties acknowledge that the payments made by the Borrower, both of amortization and interest, of the converted amounts, must, at all times, remain linked to the corresponding financing obtained by the Bank in relation to any conversion (conversión) related to said payments. Therefore, the parties agree that, notwithstanding the occurrence of any disruption event that materially affects the various exchange rates and interest rates used in this Agreement, the Borrower's payments shall continue to be linked to said financing obtained by the Bank. In order to achieve and maintain that linkage under such circumstances, the parties expressly agree that the Bank, in its role as Calculation Agent in this Agreement, acting in good faith and in a commercially reasonable manner, seeking to reflect the corresponding financing obtained by the Bank, shall determine both: (a) the existence of said disruption event(s); and (b) the applicable replacement rate or index to determine the appropriate amount to be paid by the Borrower.
CLAUSE 4.06. Cancellation and Reversal of the Currency Conversion. In the event that it is not possible for the Bank to maintain, in whole or in part, its financing in CRC due to: (a) the adoption or modification of any applicable law or regulation put into effect after the signing date of this Agreement, or (b) a change in the interpretation of any applicable law or regulation by a competent court, tribunal, or regulatory agency issued after said signing date of the Agreement, upon prior notification thereof by the Bank, the Borrower shall have the option to convert to the currency indicated in Clause 1.02 of these Special Stipulations the portion of the loan in CRC, or failing that, to prepay all sums owed in CRC. Should the Borrower opt for the reversal of the conversion (conversión), this shall be carried out at the exchange rate prevailing on the day of the reversal as determined by the Calculation Agent. In this case, said amounts shall be subject to the terms and conditions of the Unimonetary Facility with the interest rate selected in accordance with Clause 2.03 of these Special Stipulations.
CLAUSE 4.07. Default in Payment in the event of Currency Conversion. Delay in the payment of the sums owed by the Borrower to the Bank for principal, interest, and other financial charges accrued on the occasion of a conversion (conversión) shall entitle the Bank to charge interest at a floating rate in CRC determined by the Bank, plus a margin of 100 basis points on the total sums in default, without prejudice to the application of additional charges that ensure a full pass-through of costs in the event that said margin is not sufficient for the Bank to recover the costs incurred as a result of said default.
CLAUSE 4.08. Gains or Losses Associated with Reconversion to Dollars. In the event that the Borrower decides to convert the Outstanding Balance of the Loan Denominated in CRC to its equivalent in the currency indicated in Clause 1.02 of these Special Stipulations in exercise of the option described in Clause 4.06 above, any gains or losses determined by the Calculation Agent, up to the date of conversion to the mentioned currency, associated with variations in interest rates, shall be received or paid by the Borrower within a period of thirty (30) days from the date of the reconversion. Any gain associated with said reconversion to be received by the Borrower shall be first applied against any overdue and unpaid amount owed by the Borrower to the Bank.
CLAUSE 4.09. Prepayments of Converted Amounts. (a) Prepayment of the balances owed by the Borrower in relation to amounts converted to CRC may only be made when the Bank can reverse or reassign its corresponding financing obtained.
(b) Upon prior irrevocable written request to the Bank at least thirty (30) days in advance of the date on which it intends to make the prepayment, and barring objection by the Bank for the reason stated in paragraph (a) of this same Clause, the Borrower may prepay, on one of the amortization payment dates established in the payment schedule attached to the Conversion Notification Letter, all or part of the Loan Amount Denominated in CRC. In said request, the Borrower shall specify the amount and the conversion(s) (conversión(es)) it wishes to prepay. In the event that the prepayment does not cover the entirety of a specific conversion (conversión), it shall be applied proportionally to the pending installments of said conversion (conversión). The Borrower may not request prepayments of converted amounts for an amount less than the CRC equivalent of three million dollars (US$3,000,000) per specific conversion (conversión), unless the remaining balance of the conversion (conversión) were lower.
(c) Without prejudice to the provisions of paragraph (b) above, in cases of prepayment, the Borrower shall receive from the Bank or, failing that, shall pay to the Bank (as the case may be) any gain or loss incurred by the Bank for reversing or reassigning its corresponding financing obtained, determined by the Calculation Agent.
CLAUSE 4.10. Costs, Expenses, or Losses in the Event of Currency Conversion. If as a consequence of an action or omission of the Borrower, including: (a) a failure to pay on the due dates amounts of principal, interest, and commissions related to a Currency Conversion; (b) a revocation of or a change in the terms contained in a Conversion Request Letter; (c) a breach of a partial or total prepayment of the balance owed in CRC, previously requested by the Borrower in writing; (d) a change in laws or regulations that had an impact on the maintenance of the Bank's financing; or (e) other actions not described above, the Bank incurs additional costs beyond those covered by other stipulations of this Agreement, the Borrower undertakes to reimburse the Bank those sums that ensure a full pass-through of the costs incurred, upon documented justification by the Bank, which shall act in good faith and in a commercially reasonable manner, barring manifest error.
CLAUSE 4.11. Unused Balances of the Revolving Fund in the Event of Currency Conversion. The return of unused balances of the Revolving Fund referred to in Article 4.07 of the General Conditions that have been converted shall be considered prepayments of converted amounts and, therefore, shall be governed by the provisions of Clause 4.10 of these Special Stipulations.
Program Execution CLAUSE 5.01 Conditions of Execution. (a) The parties agree that the execution of the Program shall be governed by the provisions of this Agreement and the provisions contained in: (i) the Operational Regulations ("OR") of the Program, referred to in Clause 3.02(b) of these Special Stipulations; and (ii) the Environmental and Social Analysis (AAS) of the Program and the Environmental and Social Management Plan (PGAS) of the Program, referred to in Clause 3.02(e) of these Special Stipulations. Likewise, the parties agree that during the execution of the Program, modifications may be introduced to such instruments, provided the written no-objection of the Bank is obtained. Any change or update to either the OR, or the AAS and/or the PGAS, shall follow the Bank's environmental and safeguard compliance policy. Should there be any inconsistency or contradiction between the provisions of this Agreement and those established in the OR, the AAS and/or the PGAS, the provisions contained in this Agreement shall prevail.
(b) During the execution of the Program, the Bank may monitor the Borrower's financial situation, and the Borrower shall cooperate with the Bank in the monitoring process.
CLAUSE 5.02 Procurement of Works and Goods. The procurement of works and goods shall be carried out in accordance with the provisions established in Document GN-2349-7 ("Policies for the procurement of goods and works financed by the Inter-American Development Bank"), dated July 2006 (hereinafter referred to as the "Procurement Policies"), which the Borrower declares to know, or by the modifications to such Procurement Policies that the Bank may adopt and that are agreed upon between the Borrower and the Bank, and by the following provisions:
(a) International Competitive Bidding: Unless paragraph (b) of this clause provides otherwise, works and goods and services (other than consulting services) shall be procured in accordance with the provisions of Section II of the Procurement Policies. The provisions of paragraphs 2.55 and 2.56, and Appendix 2 of said Policies, regarding domestic preference margin in the comparison of bids, shall apply to goods manufactured in the Borrower's country.
(b) Other Procurement Procedures: The following procurement methods may be used for the procurement of works and goods and services (other than consulting services) that the Bank agrees meet the requirements established in the provisions of Section III of the Procurement Policies:
National Competitive Bidding, for works whose estimated cost is less than the equivalent of three million dollars (US$3,000,000) per contract and for goods and services (other than consulting services) whose estimated cost is less than the equivalent of two hundred fifty thousand dollars (US$250,000) per contract, in accordance with the provisions of paragraphs 3.3 and 3.4 of said Policies, and provided its application does not contravene the basic guarantees that bids must meet and the Procurement Policies, and the following provisions are applied:
The Borrower undertakes to allow the participation of firms or individual contractors or suppliers of goods and services (other than consulting services) from member countries of the Bank, and to declare firms or individuals or suppliers of goods and services (other than consulting services) from non-member countries of the Bank ineligible to participate in the bids; subject to paragraphs 1.6, 1.7, and 1.8 of the Procurement Policies.
(B) The Borrower undertakes that the following shall not be established: (1) percentages of locally sourced goods or services (other than consulting services) as a mandatory requirement for inclusion in bids; (2) national preference margins; and (3) requirements for registration or enrollment in the country to participate in the submission of bids, nor financing by the contractor.
(C) The Borrower undertakes to agree with the Bank on the bidding document or documents to be used in National Competitive Biddings financed by the Bank, and to charge participants in this type of bidding only the reproduction costs of the bidding documents. The bidding documents shall, among other things: (1) establish that the bid evaluation process, its stages, the factors to be evaluated, and the award shall be governed by the provisions of paragraphs 2.48 to 2.54 and 2.58 to 2.60 of the Procurement Policies. For publicity purposes, it may be carried out by the Contracting Entity, in accordance with the provisions of paragraph 3.4 of the Procurement Policies; (2) establish that prior consent of the Bank will be obtained before using special urgency procedures or applying exceptions to the competitive procurement procedures agreed upon with the Bank based on assumptions such as the exclusion of a matter, those related to the nature of the procurement, concurrent circumstances, small amount, sole supplier, special security reasons, compelling urgency, or those that the Comptroller General of the Republic could authorize by reasoned resolution; (3) distinguish between rectifiable and non-rectifiable errors or omissions, in relation to any aspect of the bids. A bidder should not be automatically disqualified for not having submitted complete information, whether due to involuntary omission or because the requirement was not clearly established in the bidding documents. Provided it involves errors or omissions of a rectifiable nature — generally because they involve matters related to data verification, historical information, or aspects that do not affect the principle that bids must substantially conform to what is established in the bidding documents — the interested party shall be permitted, within a reasonable period, to provide the missing information or correct the rectifiable error. Failure to sign a bid or failure to submit a required guarantee shall be considered non-rectifiable omissions. The correction of errors or omissions shall also not be allowed to be used to alter the substance of a bid or to improve it; (4) allow bidders to withdraw proposals submitted before the deadline set for the submission of bids and that, once the public opening of bids has been carried out, no improvements, advantages, discounts, or any other proposal modifying said bids shall be admitted; (5) indicate that, once the public opening of bids has been carried out, and until the award of the contract has been notified to the awardee, no information shall be disclosed to bidders or persons with no official connection to the procurement procedures in question, regarding the analysis, clarification, and evaluation of the bids, or regarding the recommendations concerning the award; (6) establish that the protest regime that may be filed or any protest that bidders may submit shall allow them to use the channel provided for in paragraphs 11 through 14 of Appendix 3 of the Procurement Policies; (7) indicate that in the event of joint bids (joint ventures, consortia, or associations), the submission of a single guarantee enforceable irrespective of the defaulting bidder shall be required; and (8) establish that, in relation to the types of guarantees for bid maintenance, contract performance, and advance payment guarantee, among others, the following types shall be accepted: demand guarantee, irrevocable letter of credit, and certified or cashier's check. Regarding the percentages of the guarantees, these may not exceed in any case the following maximums: (aa) for works, the bid security guarantee shall not exceed 3% of the contract value; and the contract performance guarantee, in the case of bank guarantees, shall be between 5% and 10% of the contract value; and in the case of performance bonds issued by an insurance company, the guarantee shall be up to 30% of the contract value; and (bb) for goods, the bid security guarantee shall be between 2% and 5% of the estimated value in the official budget; and the contract performance guarantee shall be between 5% and 10% of the contract value. The guarantees must be issued by a reputable entity from an eligible country. When issued by foreign banks or institutions, at the bidder's choice they may be issued by a bank based in Costa Rica or, with the Borrower's consent, directly by a foreign bank from a member country of the Bank acceptable to the Bank. In all cases, the guarantees must be acceptable to the Borrower, who may not unreasonably refuse their acceptance.
Price Comparison, for works whose estimated cost is less than the equivalent of two hundred fifty thousand dollars (US$250,000) per contract, and for goods and services (other than consulting services) whose estimated cost is less than the equivalent of fifty thousand dollars (US$50,000) per contract, in accordance with the provisions of paragraph 3.5 of said Policies.
(c) Other Procurement Obligations. The Borrower undertakes to carry out the procurement of works and goods and services (other than consulting services) in accordance with the general plans, technical, social, and environmental specifications, budgets, and other documents required for the procurement or construction and, where appropriate, the specific bidding documents and other documents necessary for the call for prequalification or bidding, as applicable; and in the case of works, to obtain and present in relation to the properties where the Program's works will be built: (i) before the call for bidding of the works, the corresponding environmental license or permit, the social and environmental management plans required by the laws of the Republic of Costa Rica, the Bank's policies, and the AAS and PGAS of the Program, as well as evidence of compliance with the planned actions and the implementation schedule for the resettlement of affected families as established in the resettlement document, as the case may be; and (ii) before the start of the works, evidence of legal possession, easements (servidumbres), or other rights necessary to begin the works, as well as of the water rights that are required for the work in question. Likewise, before the start of the work, the Borrower must submit evidence that a supervisory company has been contracted for the work in question.
(d) Review by the Bank of Procurements:
(i) Procurement Planning: Before any call for prequalification or bidding, as the case may be, can be made for the award of a contract, the Borrower must submit for the Bank's review and approval the proposed procurement plan for the Program, in accordance with the provisions of paragraph 1 of Appendix 1 of the Procurement Policies. This plan must be updated annually or according to the Program's needs, and each updated version shall be submitted for the Bank's review and approval. The procurement of works and goods and services (other than consulting services) must be carried out in accordance with said procurement plan approved by the Bank and with the provisions of said paragraph 1.
(ii) Ex ante Review: Unless the Bank determines otherwise in writing, contracts for the procurement of works and goods and services (other than consulting services) to be awarded through international competitive bidding or direct contracting shall be subject to ex ante review, in accordance with the procedures established in paragraphs 2 and 3 of Appendix 1 of the Procurement Policies.
(iii) Ex post Review: The ex post review of procurements shall apply to each contract not covered in paragraph (d)(ii) of this Clause, in accordance with the procedures established in paragraph 4 of Appendix 1 of the Procurement Policies. For these purposes, the Borrower shall keep available for the Bank evidence of compliance with the provisions of paragraph (c) of this clause.
CLAUSE 5.03. Tariffs. The Borrower shall take appropriate measures, acceptable to the Bank, so that the tariffs for the potable water and sanitation supply services generate at least sufficient income to cover all operating expenses of the respective system, including those related to administration, operation, maintenance, and depreciation. If the application of the foregoing does not generate sufficient income to timely meet the financial and local counterpart obligations established in this Agreement, the Borrower shall adopt the necessary measures, which may include tariff increases, to obtain the additional resources required to achieve that purpose.
CLAUSE 5.04. Maintenance. The Borrower undertakes, by itself or through the Acueducto and Alcantarillado Administrative Associations (ASADAS) participating in the execution of Component 2 of the Program, to: (a) ensure that the works and equipment included in the Program are properly maintained in accordance with generally accepted technical standards; and (b) submit to the Bank, during the execution of the Program and upon completion of the first of the Program's works, and within the first quarter of each calendar year, a report on the status of said works and equipment, and the annual maintenance plan for that year, in accordance with the provisions of Section V of the Sole Annex. If from the inspections carried out by the Bank, or from the reports it receives, it is determined that maintenance is being performed below the agreed levels, the Borrower and the ASADAS participating in the execution of Component 2 of the Program, as applicable, shall adopt the necessary measures to totally correct the deficiencies.
CLAUSE 5.05. Recognition of Expenses Since Financing Approval. The Bank may recognize as part of the local counterpart, expenses made or to be made in the Program from December 14, 2010, until the effective date of this Agreement, provided that substantially similar requirements to those established in this same instrument have been met.
CLAUSE 5.06. Contracting and Selection of Consultants. The selection and contracting of consultants shall be carried out in accordance with the provisions established in Document GN-2350-7 ("Policies for the selection and contracting of consultants financed by the Inter-American Development Bank"), dated July 2006 (hereinafter referred to as the "Consultant Policies"), which the Borrower declares to know, or by the modifications to such Consultant Policies that the Bank may adopt and that are agreed upon between the Borrower and the Bank, and by the following provisions:
(a) The Borrower shall carry out the selection and contracting of consultants using the method established in Section II and in paragraphs 3.16 to 3.20 of the Consultant Policies for selection based on quality and cost; and through the application of any of the methods established in Sections III and V of said policies, for the selection of consulting firms and individual consultants, respectively. For the purposes of the provisions of paragraph 2.7 of the Consultant Policies, the shortlist of consultants whose estimated cost is less than the equivalent of two hundred thousand dollars (US$200,000) per contract may be composed entirely of national consultants.
(b) Review by the Bank of the consultant selection process:
(i) Planning of selection and contracting: Before any request for proposals can be made to consultants, the Borrower shall submit to the Bank for its review and approval a consultant selection and contracting plan, which shall include the estimated cost of each contract, the grouping of contracts, and the selection criteria and applicable procedures, in accordance with the provisions of paragraph 1 of Appendix 1 of the Consultant Policies. This plan shall be updated annually or as required by the needs of the Program, and each updated version shall be submitted to the Bank for its review and approval. The selection and contracting of consultants shall be carried out in accordance with the consultant selection and contracting plan approved by the Bank and its corresponding updates.
(ii) Ex-ante review: Unless the Bank determines otherwise in writing, each contract for services of consulting firms with an estimated cost equal to or greater than two hundred thousand dollars (US$200,000), or of individual consultants with an estimated cost equal to or greater than fifty thousand dollars (US$50,000), or to be awarded through direct selection, shall be reviewed on an ex-ante basis, in accordance with the procedures established in paragraphs 2 and 3 of Appendix 1 of the Consultant Policies.
Ex-post review: The ex-post review of contracting shall apply to each contract not covered in subsection (b)(ii) of this clause, in accordance with the procedures established in paragraph 4 of Appendix 1 of the Consultant Policies.
CLAUSE 5.07. Annual operational plans. (a) The Borrower undertakes to submit, to the Bank's satisfaction, within the first quarter of each calendar year and during the execution of the Program, the Annual Operational Plan (POA) for the corresponding year, which shall contain the report of proposed activities to be carried out for the year and those carried out during the previous year. Additionally, the POA shall, at a minimum, include: (a) the goals to be achieved in the year, compared with the initial report forecasts and the Program objectives; (b) the detail and schedule of activities and the critical path analysis for carrying out said activities; (c) the specification of the activities planned for compliance with the contractual conditions during the year; (d) the procurement plan for works and goods and services (other than consulting) and the selection and contracting of consultants; and (e) the budget and disbursement schedule. The POA corresponding to the first year of Program execution shall be submitted as part of the initial report referred to in Article 4.01(d) of the General Standards.
(b) During the execution of the Program, and no later than April 30 of each year, the Borrower and the Bank shall meet to review progress in implementing the Program execution plan, referred to in Article 4.01(d) of the General Standards, and the reports related to the execution of the Program, which the Borrower must provide to the Bank, in accordance with Article 7.03 of said General Standards. If the Bank finds deficiencies in the execution of the Program, the Borrower shall present to the Bank a proposal of corrective measures with its corresponding implementation schedule. The Borrower shall invite the Dirección de Crédito Publico to said meetings.
CLAUSE 5.08. Baseline and data compilation. The Borrower undertakes to submit to the Bank: (a) within a period of three (3) months from the date of declaration of eligibility for Financing disbursements, a validation report of the initial basic data contained in the baseline presented in the Program Results Matrix; and (b) from the date of declaration of eligibility for Financing disbursements and as part of the semi-annual execution report for the second Semester of each calendar year, the annual data that must be compared with the validated baseline to evaluate the Program results.
CLAUSE 5.09. Evaluations. The Borrower undertakes to carry out and submit to the Bank the results of the Program evaluations carried out by consultants contracted for such purposes, in accordance with the terms and conditions previously agreed with the Bank. The first evaluation shall be carried out when a period of thirty-six (36) months has elapsed from the date of entry into effect of this Contract, or when thirty-five percent (35%) of the resources of the Financing and of the Non-Reimbursable Financing Agreement No. GRT/WS-12604-CR have been committed, whichever occurs first in time. The second evaluation shall be carried out when ninety-five percent (95%) of the resources of the Financing and of the Non-Reimbursable Financing Agreement No. GRT/WS-12604-CR have been disbursed.
Records, Inspections, Reports, Supervision, Financial Administration and Internal Control, and Financial Statements CLAUSE 6.01. Records, inspections and reports, financial administration and internal control system, and external audit. The Borrower undertakes to ensure that records are kept, inspections are permitted, reports are provided, an information system and a financial internal control structure acceptable to the Bank are maintained, and that the financial statements and other reports are audited and presented to the Bank, in accordance with the provisions established in this Chapter and in Chapter VII of the General Standards.
CLAUSE 6.02. Supervision of Program execution. (a) The Bank shall use the Program execution plan referred to in Article 4.01(d)(i) of the General Standards as an instrument for supervising the execution of the Program. Said plan shall be based on the procurement plan for works and goods and services (other than consulting) and the selection and contracting of consultants and the POA, dealt with in Clauses 5.02(d)(i) and 5.06(b)(i), and Clause 5.07 of these Special Stipulations, respectively; and shall comprise the complete planning of the Program, with the critical path of actions that must be executed so that the Financing resources are disbursed within the period provided in Clause 3.04 of these Special Stipulations.
(b) The Program execution plan shall be updated when necessary, especially when significant changes occur that imply or could imply delays in the execution of the Program. The Borrower shall inform the Bank of updates to the Program execution plan, no later than at the time of submitting the corresponding semi-annual progress report.
CLAUSE 6.03. Financial statements and other reports. The Borrower undertakes to ensure that the following reports are presented within the deadlines, during the period of time, and with the frequency established below:
(a) within a period of sixty (60) days after the end of each calendar Semester and during the period for Financing disbursements, the execution reports referred to in Article 7.03 of the General Standards, and the financial statements on activities financed in the previous Semester for the Program components. The semi-annual reports related to Program execution shall contain, at a minimum, information regarding compliance with contractual obligations and progress in achieving the indicators and Program goals agreed with the Bank, as well as to justify the problems encountered during execution and propose measures to achieve the Program objectives.
(b) within one hundred twenty (120) days following the close of each fiscal year of the Borrower and during the period for Financing disbursements, the audited financial statements of the Borrower. Likewise, within sixty (60) days after the end of each calendar Semester, the unaudited financial statements of the Borrower shall be submitted to the Bank, including a financial projection for a period of two (2) years.
(c) within one hundred twenty (120) days following the close of each fiscal year of the Borrower and during the period for Financing disbursements, the audited financial statements of the Program. The last of these reports shall be submitted within one hundred twenty (120) days following the date stipulated for the last disbursement of the Financing.
Miscellaneous Provisions CLAUSE 7.01. Effectiveness of the Contract. (a) The parties place on record that the effectiveness of this Contract begins on the date on which, in accordance with the laws of the Republic of Costa Rica, it acquires full legal validity. The Borrower is obliged to notify the Bank in writing of said date of entry into effect, attaching the documentation that so accredits it.
(b) If, within a period of one (1) year from the signing of this instrument, this Contract has not entered into effect, all the provisions, offers, and expectations of rights contained therein shall be deemed non-existent for all legal purposes without the need for notifications and, therefore, no liability shall arise for either party.
CLAUSE 7.02. Termination. The total payment of the Loan and of the interest and commissions shall conclude this Contract and all obligations deriving from it.
CLAUSE 7.03. Validity. The rights and obligations established in this Contract are valid and enforceable, in accordance with the terms agreed upon herein, irrespective of the legislation of any specific country.
CLAUSE 7.04. Communications. All notices, requests, communications, or notifications that the parties must address to each other by virtue of this Contract shall be made in writing and shall be considered effected from the moment the corresponding document is delivered to the recipient at the respective address noted below, unless the parties agree otherwise in writing:
For the Borrower:
Postal address:
Instituto Costarricense de Acueductos y Alcantarillados Sede Central Pavas, Frente al ICE Módulo A San José, Costa Rica (506) 2242-5025 Postal Box:
1097-1200- Pavas- San José For the Bank:
Postal address:
Banco Interamericano de Desarrollo 1300 New York Avenue, N.W.
Washington, D.C. 20577 EE.UU.
(202) 623-3096
Arbitration CLAUSE 8.01. Arbitration clause. For the settlement of any controversy arising from this Contract that is not resolved by agreement between the parties, they unconditionally and irrevocably submit to the procedure and award of the Arbitration Tribunal referred to in Chapter IX of the General Standards.
IN WITNESS WHEREOF, the Borrower and the Bank, each acting through its authorized representative, sign this Contract in three (3) copies of equal tenor in San José, Costa Rica on the date indicated above.
INSTITUTO COSTARRICENSE DE BANCO INTERAMERICANO DE ACUEDUCTOS Y ALCANTARILLADOS DESARROLLO __________________________ _____________________ Yesenia Calderón Solano Fernando Quevedo Executive President Representative of the Bank in Costa Rica (B) "CHF-LIBOR-Reference Banks" means that the rate corresponding to a LIBOR-Based Interest Rate Determination Date for each Quarter shall be determined based on the rates at which the Reference Banks are offering deposits in Swiss francs to first-class banks in the London interbank market, at approximately 11:00 a.m., London time, on a date that is two (2) London Banking Days prior to the LIBOR-Based Interest Rate Determination Date for each Quarter, for a term of three (3) months, beginning on the LIBOR-Based Interest Rate Determination Date for each Quarter and in a Representative Amount. The Calculation Agent or Agents used by the Bank shall request a quotation of such rate from the principal London office of each of the Reference Banks. If at least two (2) quotations are obtained, the rate for that LIBOR-Based Interest Rate Determination Date for each Quarter shall be the arithmetic mean of the quotations. If fewer than two (2) quotations are obtained as requested, the rate for that LIBOR-Based Interest Rate Determination Date for each Quarter shall be the arithmetic mean of the rates quoted by major banks in Zurich, selected by the Calculation Agent or Agents used by the Bank, at approximately 11:00 a.m., Zurich time, on that LIBOR-Based Interest Rate Determination Date for each Quarter, for loans in Swiss francs to major European banks, for a term of three (3) months, beginning on the LIBOR-Based Interest Rate Determination Date for each Quarter and in a Representative Amount. If the Bank obtains the interest rate from more than one Calculation Agent, as a result of the procedure described above, the Bank shall determine, in its sole discretion, the LIBOR Interest Rate applicable on a LIBOR-Based Interest Rate Determination Date for each Quarter, based on the interest rates provided by the Calculation Agents. For the purposes of this provision, if the LIBOR-Based Interest Rate Determination Date for each Quarter is not a banking day in Zurich, the rates quoted on the immediately following banking day in Zurich shall be used.
(z) "Fixed Interest Rate" means the sum of: (i) the Fixed Base Rate, as defined in Article 2.01(x) of these General Rules, plus (ii) the current margin for ordinary capital loans expressed in basis points (bps), which shall be periodically established by the Bank.
(aa) "Quarter" means each of the following three (3)-month periods of the calendar year: the period beginning on January 1 and ending on March 31; the period beginning on April 1 and ending on June 30; the period beginning on July 1 and ending on September 30; and the period beginning on October 1 and ending on December 31.
Amortization, Interest, and Credit Commission