Documentof The World Bank

FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. P-5051-BR

MEMORANDUMAND RECOMMENDATION

OF THE

PRESIDENTOF THE

INTERNATIONALBANK FOR RECONSTRUCTIONAND DEVELOPMENT

Public Disclosure Authorized TO THE

EXECUTIVEDIRECTORS

ON A

PROPOSEDLOAN

IN AN AMOUNTEQUIVALENT TO USlOO MILLION

TO THE

STATEOF PARANA Public Disclosure Authorized WITH THr GUARANTEEOF THE FEDERATIVEREPUBLIC OF

FO[. A

MUNICIPALDEVELOPMENT PROJECT

IN THE

STATEOF PARANA

MAY22, 1989 Public Disclosure Authorized

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosedwithout World Bank authorization. BRAZIL

MUNICIPAL DEVELOPMENT PROJECT IN THE STATE OF PARANA

Currency Equivalents March 3, 1989 Currency Unit = Cruzado Novo (NCz$) US$ lI = NCz$ 1 NCz$ 1 = US$ 1

Fiscal Year

January 1 - December 31

Weights and Measures

1 meter (m) - 3.28 feet (ft) 1 kilomieter (km) = 0.62 mile (mi) 1 square kilometer (km2) = 0.386 square mil (sq mi) 1 metric tonne (t) = 2200 pounds

List of Acronyms

BANESTADO Parana State Bank CEF Federal Economic Fund COHAPAR Parana State Low.Income Housing Company CPO Central Project Office (of FAMEPAR) FAMEPAR Foundation for the Assistance of Municipalities of the State of Parana FAP (Municipal) Financial Action Plan FDU Urban Development Fund (of Parana State) ICM Merchandize Circulation (Sales) Tax PCU The Project Coordination Unit in SEDU PEDU State Urban Development Program (Parana) PLANASA National Sanitation Plan PR The State of Parana PRAM Parana Market Towns Improvement Project (Loan 2343-BR) RPO Regional Project Office (of FAMEPAR) SANEPAR Parana State Water Company SEDU State Secretariat of Urban Development SUCEAM State Secretariat for Erosion and Environmental Sanitation SUREHMA Parana's Agency for Environmental Protection FOR OFmFCIALUSE ONLY

BL\Z~T- MUNICIPAL :ZVEL0?METPpROJEC t 'A STATE OF PARANA

Loan and Prot_c s1smary

Borrower: The State of Parana.

Guarantor: The Federative Republic of Bra:il.

Beneficiaries: About 318 municipalities,plus SANEPAR,the State water company and COHAPAR. the-State low-incomehousing company.

Executing Agency: Foundation for the Assistance of Municipalitiesin the State of Parana (FAMEPAR).

Amount: US$100.0 million equivalert.

Terms: Repayment in 15 years. including five years of grace. with interest at the Bank's standard variable rate.

Onlending Terms: About 92Z of the Bank loan, plus about 74Z of the State's counterpart contribution,would be on-lent to sub-borrowers throughthe State's Urban DevelopmentFund (FDU), operated by BANESTADO, the State Bank. Sub-loanswould be made for terms of 5, 10 and 15 years,with one year of grace, at an inflation- adjustedvariable interest rate (currently11Z p.a.), at least 3 percentagepoints higher than the Fund's borrowingcost, to cover exchange risk and administrativecosts.

Financing Plan: US$ millions

Bank 100.0 State of Parana 67.4 Sub-borrowers 59.5

Total 226.9

Return on - Investments: 17.1Z, using revenuesand increasedland values as a proxy for benefits.

Staff Appraisal Report: 7715-BR, dated May 22, 1989.

This documenthas a restricteddistribution and may be used by recipientsonly in the performance of their officialduties. Its contents may not otherwisebe disclosedwithout World Bank authorization. MEMORANDUHAND RECOMMENDATIONOF THE PRESIDENT OF THE INTERNATIONALBANK FOR RECONSTRUCTIONAND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE STATE OF PARANA WITH THE GUARANrEE OF THE FEDERATIVE REPUBLIC OF BRAZIL FOR A MUNICIPAL DEVELOPMENTPROJECT IN THE STATE OF PARANA

1. The followingmemorandum and recommendationon a proposed loan to the State of Parana for US$100.0million equivalentis submittedfor approval. The proposed loan would be repaid overi1S years, includingfive years of grace, at the Bank's standard variable interest rate. The loan would help finance municipal infrastructureinvestments in the State.

2. Backaround The rates of urban populationgrowth and household formation in Brazil were very high during the 19708 (4.42..and5.72, respectively,per annum). Althoughthis trend has peaked,over the 1986-95period urban households are still projectedto increaseby 3.7? per annum to a total of 32.7 million by 1995, or almost twice the 1980 total. Parana'sown urbanizationtrend was even more intensivethan for Brazilas a whole (6.02p.a. for populationand 7.32 p.a. for householdsduring 1970-1980),and projectionsshow an annual rate of urban household formation of 5.4Z over the 1986-95 period, generating 0.8 million additionalhouseholds by 1995, equivalentto 60? of today's State total.

3. Meeting the growing demand for urban services will be the major sector challenge for the State in the forthcomingdecade, a task made more difficult by the dramatic increase in urban poverty caused by the combipationof rapid urban growth and the slowingof the national economy. In 1985, the proportion of the total populationwith incomesbelow the povertyline (definedas less than five minimum salariesper family) in the metropolitanregion of , the capital of Parana,was 21.52 (up from only 6.0 in 1981), and deficits of basic urban infrastructure and services, mainly affecting the urban poor, are high in Parana. In 1985, 43.32 of urban households in the State had only rudimentary sanitary facilities; about one-third burned, buried or discarded their garbage in vacant lots or in drainage systems.- Hospital and other hazardous wastes are not always separated from regular garbage. Even for water supply, where the efforts of the public sector have been greatest, more than 235,000 urban households (19.3?) in 1984 had no piped water and had to draw water from public standpipes,wells or rivers.

4. Municipalities-,whose powers to plan and administerurban developmentwere constrainedduring the military dictatorship(1964-1985), gained considerable responsibilitieswith the new Constitution,promalgated October 5, 1988. These responsibilities include provision of such services as basic sanitation, water supply, education, primary and secondary education and health care. Municipalities may either operate these services themselves or delegate them to a higher level of government (as was done for water and sewerage under the National Sanitation Plan, or PLANASA). At the same time, municipalitieshave been awarded greater financial resources to pay for these services, through direct taxation and increased revenue-sharing.It has been estimatedthat the fiscal arrangements of the new Constitution will increase the revenues of Parana's municipalities by between 302 and 40?, with much of the gain being made in the next two years as t e reform takes effect. Municipalitieswill rely on 2

State sector agencies for guidancein carryingout these responsibilities.The Secretariatfor Urban Developmentand Environment(SEDU) is in charge of overall urban developmentpolicy. Within SEDU are FAMEPAR,the Foundationfor Assistance to Municipalities, SANEPAR, the State water company, SUCEAM, the State Secretariatfor Erosionand EnvironmentalSanitation, and COHAPAR,the State Low- Income Housing Company. These agencies are competent,but will require some institutional strengthening. With the reduction in many Federal poverty programs, assistance to the poor in basic sanitation, housing and urban transportationwill increasinglybe implemented by sub-national (State and municipal)governments, making it possibleto introduceredistribution policies and strategiesat this level and adjust the tendencyto subsidizehigher income groups noted in previous Bank studies.

5. The main sector issues are to: (a) develop and implement a coherent, sustainable "core" program to improve overall urban sector policies in an integratedapproach focused on the municipalityas the primaryagent for economic development;(b) continue to address sector constraintsin basic sanitation, low-income housing and urban transportation; and (c) deal with serious environmentalproblems. The State's program to accomplish this should: (a) increasemobilization of local resources;tb) improvethe efficiencyof resource allocation;(c) strengthenthe institutionsdealing with rapid urbanization;(d) improve targetingof benefits to low-incomepopulations; and (e) contributeto reducing fiscal deficits.

6. Rationale for Bank Involvement The Bank's assistancestrategy to Brazil is to supportpolicies and investmentsthat will encourageeconomic growth and social developmentin a contextof macroeconomicstability, with an emphasison efficient resource allocation and administrationin the public sector, and appropriatetargeting and deliveryof supportsystems to the poor. The proposed project-is fully consistentwith these longer-termdevelopment goals, in its targeting of economically efficient investments to mainly low-income beneficiaries. In the shorter-term,the Bank's assistance would help to strengthen municipalities' institutionalcapacities and promote investment planning on the basis of sound financial policy, at this critical point of increasedresponsibilities and resources. The Bank's previousexperience ir. the sector,in particularwith the ParanaMarket Towns Project,or PRAM, (Loan-2343- BR) and the Project (Loan 2623-BR), provides a basis for continuing the momentum in the sector, and transferringlessons learned in project design and implementation.These projects resultedin a rapid transfer of knowledgeand have pro-videdan institutionalmemory for the sector.

7. ProlectObjectives The main objectiveof this project is to increasethe general c-apacityof municipalities to effectively assume their increased responsibilitiesunder Brazil's new Constitution,thereby enabling them to efficientlyutilize the large concurrentincrease in resources,and strengthen administrativecapabilities, after nearly twentyyears of relativeneglect. The specific objectives are to: (a) increase institutionalcapacities to plan, finance and execute cost-effectiveprojects and programs, through appropriate policy reforms; (b) improve coordinationof urban development,environmental policy and investment decisionsat the State and municipal levels; (c) target projectbenefits to low-incomepopulations: and (d) strengthenthe State'sUrban DevelopmentFund (FDU) as a reliable source of funding. 3

8. Project Description The project involves two components:Part One - Institutionaland Human Resource Developmentwould compriseabout 10? of total costs, and would include technical assistance,training and equipment to (i) municipalities,SANEPAR and COHAPARto strengthentheir financialmanagement and overall administration; (ii) SEDU and FAMEPAR (and selected other sector agencies) to improve their institutionalcapacity for project management and appraisalof sub-borrowersand sub-projects;and (iii) training and technical assistance agencies. Part Two - InfrastructureInvestments would represent about 90% of total project costs, and would include water supply and basic sanitation,street paving and lighting,drainage, erosion control, solid and toxic waste management,community facilities (health posts, day care centersand school building extensions),and other eligible sub-projectsincluding a pilot projectfor low-incomeself-help house construction.About 47? of to_al project costs would be incurred for investmentswhich directly contributeto containing environmentaldamage resultingfrom uncontrolledurban growth,and to minimizing furtherdeterioration through better planningand improvedresource management..

9. The project objectiveswould be achieved through the support of a State- wide urban developmentprogram (PEDU). Under PEDU, eligiblesub-borrowers would have access to sub-loans from an Urban DevelopmentFund (FDU), managed by a specialunit (PCU) in SEDU, and administered-bythe State Bank, BANESTADO. These sub-loanswould financeessential municipal infrastructure, services and related equipment. Eligible municipal sub-borrowerswould be selected by FAMEPAR according to establishedlimits on revenues and debt-servicingcapacity, and commitmentto improvetheir financesand administration.Sub-project eligibility criteria, including low cost technical design standards and location in low- income areas, would be set out in detail in an OperationManual. Each sub- borrowerwould undergoa financialand institutionalappraisal by FAMEPAR,which would establish a credit limit and also define the minimum content for an institutionaldevelopment package to be implementedby the sub-borrower. The principal element of this packagewould be the sub-borrower'sfinancial action plan (FAP),.aimedat improvingits financialsoundness by increasingrevenues and reducing current expenditures. The appraisalof this FAP by FAMEPARwould lead to an agreed program of technicalassistance and training,under Part I of the project, in order to meet the establishedfinancial targets. All sub- borrowerswill be requiredto participatein Part I of the project. Those-sub- borrowers demonstratingto FAMEPAR satisfactoryfinancial and institutional capacitywould be eligible for sub-loansto finance investmentsunder Part II. Based on experienceunder the PRAM Project, about 90? of the municipalitiescan be expectedto participatewithin the first 18 months of the program. Financing of Part I would includea grant element for technicalassistance and training; for Part II, grant fundingwould be for communityfacilities, erosion control and toxic-wastemanagement. The a priori requirementof demonstratedfinancial and managerialperformance improvements would stimulatecompetition for limited funds among sub-borrowers,an essentialfeature of this project.

10. About 318 municipalitiesplus SANEPAR and COHAPAR would be eligible to participatein PEDU. Undet-the proposedloan, policiesand conditionsfor SANEPAR would be generallyconsistent with those of other Bank water sector operations. The project, to be carried out over five years, provides funds for equipment, civil works and consultantservices. The total cost of the project is estimated at US$226.9 million equivalent,with a foreign exchange component of US$56.2 4 million equivalent(25Z). A breakdownof costs and the financingplan are shown in ScheduleA. Amountsand methods of procurementand the disbursementschedule are sho-vmin ScheduleB. A timetableof key projectprocessing events, and the status of Bank Group operations in Brazil are given in Schedules C and D, respectively. A map (IBRD 21580),and the Staft AppraisalReport, No. 7715-BR, dated May 17, 1989, is also attached.

12. Actions Agreed Agreementwas reachedon the following:(a) the Operation Manual; (b) that the PCU and FAMEPAR (includingCPO and RPOs) are established, staffedand maintained in a manner satisfactoryto the Bank; (c) the operating terms and conditicnsof the FDU; (d) eligibilitycriteria for sub-borrowersand sub-projects; te) appraisal criteria to be used by Fl PAR in determining borrowingcapec.ty, assessing FAPs and establishingguarantees; (f) criteriafor allocationof grant funds; (g) that FAMEPAR enter into a TechnicalCooperation Agreementwith selectedstate agencies-for provision of supervisoryand technical assistanceservices in projectimplementation; (h) that the PCU and FAMEPARwould carry out jointly with the Bank an annual review-of sub-borrowers'investment programs,borrowing capacity and creditworthiness,financial performance, status of institutionaldevelopment and monitoringand evaluationprograms; this would form the basis for an annual investr.entprogram for PEDU, satisfactoryto the Bank; (-i).that not later than September 30, 1989, the PCU and FAMEPAR would prepare and furnishto the Bank, a final set of financial,economic, technical, environmentaland social monitoringindicators, satisfactory to the Bank, for the project and the sub-borrowers,to be includediLn the respectivepart.`:ipation agreements;(j) by October 31, an annual review of the adequacy of FDU lending terms and conditions;and (k) an interimreview (in December1991) of the pilot housing sub-componentwith a view to making adjustmentsto its share of project funding, if necessary.

13. Specificallyfor SANEPAR, agreementwas reached on: (a) compliancewith the National TariffLaw, which regulateswater sector financialperformance; (b) continuationof the use of PLANASA eligibilitycriteria for sub-projects;(c) completionof a study on marginal cost pricing by end-1989 and implementation by end-1990; (d) completionof a study of assetvalue by mid-1990,incorporation of recommendedasset value changesby end-1990,and updatingof such revaluation every three years; (e) consultationwith the Bank on proposed changes-ofmore than 102 in annual investmenttargets; (f) that debt:equityratio does not exceed 70:30,nor debt servicecoverage ratio fall be-low1.5; (g) that other monitoring indicatorsand a schedule for adjustmentof the commerciallaccountingsystem, to be implementedby end-1990,be includedin the ParticipationAgreement between the PCU/FDUand SANEPAR;and (h) furnishingof a five-yearprojection, in detail for the first year, specificallyto includethe targetingof internalgeneration of 202 of investmentfunds by 1993.

14. The following would be undertaken prior to Loan Disbursement: (a) appraisal, and review by the Bank, of technical, financial, economic and institutionalaspects for any sub-projectcosting in excess of US$3 million; (b) technicaland financialappraisal of each pilot housing sub-project,together with a list of the intendedbeneficiaries and the selectioncriteria applied; (c) furnishing of a satisfactoryresettleirent program for any sub-projects invQlvingrelocation; and (d) submissionof a satisfactoryeconomic, technical, financial, institutional,and enviroment appraisal of any toxic waste sub- 5 project. The establishment of the PCS, and the execution of the FAIEPAR, FinancialAgency Agreements.and the ParticipatingAgreement with SANEPAR.would be required prior to Loan Effectiveness.

15. Benefits The improved capacity by the State of rarana and its municipalitiesto mobilize and allocate local,resources, coupled with overall improved fiscal policies and management, will. dnsurp the sustainabilityof investments,provide a timely response to new demands upon local governments (dictatedby the recently approved Constitution),and also directly contribute towards meeting objectives of increased public sector efficiency and lower deficits. The project emphasizes improving the living standards of the urban poor, rather than those of-higher income groups as has happened in the past. The weighted average rate of return of quantifiablebenefits is estimatedto be 17.12. Additional unquantifiablebenefits are derived from the large number of projectcomponents wnich directlycontribute to reductionof environmentaldamage caused by uncontrolledurban growth.

16. Risks There are two specific risks: (a) the potential lack of political will to carry out financialand institutionalagreements; and (b) the difficulty inherent in coordination of the program, given the number of participating agencies. Sub-projectand sub-borrowereligibility criteria, secure guarantee through receipts and sales tax commitments,and agreed policies for full cost recoveryhave been designed to minimize the former. In addition,the enthusiasm and results shown by both State and municipal governments. in spite of a difficult macroeconomic environment, ensure strong commitment to project objectives. Considerableattention has been placed on defining the institutional roles and responsibilitiesof the various agencies before project inception, through the use of a pre-approvedOperation Manual, which should reduce the risk of problems resulting from the lack of coordination. The previous experience of FAMEPAR, BANESTADO, SANEPAR and %.he majority of the participating municipalitiesin previousBank-financed projects should furthermitigate project risks. The straightforwardnature of the technical assistance, training and works involved, implies few technical risks.

17. Recommendation I am satisfied that the proposed loan would comply with the Articles of Agreementof the Bank and recommenathat the ExecutiveDirectors approve the proposed loan.

Barber Conable President

Attachments Washington, D.C. May 22, 1989 6

ScheduleA

BRAZIL

MUNICIPALDEVELOPMENT PROJECT IN THE STATE OF PARANA

Proiect Costs and FinancingPlan

EstimatedCosts: 11

Local eoreimn Total -(US$ million)------

A. InstitutionalDevelopment 13.8 4.1 17.9 - TechnicalAssistance 1o.1 3.0 13.1 - Traiaing 3.7 1.1 4.8

B. Infrastructure 130.4 38.9 169.3 - Hunicipal 57.6 17.2 74.k - EnvironMentalHealth 67.3 20.0 87.3 - Housing Construction 5.5 1.7 7.2

Total Base Cost 144.2 43.0 187.2

Physical Contingencies 14.4 4.3 18.7 Price Contingencies 16.2 4.8 21.0

Totai Project Cost 174.8 52.1 226.9

FinancingPlan:

Bank 47.9 52.1 100.0 State of Parana 67.4 0.0 67.4 Sub-borrowers 59.5 0.0 59.5

Total 174.8 52.1 226.9

1/ Project costs are shown as of Pebruary, 1989. Estimate includesUS$22.2 million in direct taxes. Interest during constructionhas been included in contractorsestimates and hence, is part of project costs. 5

project. The establishment of the PCU, and the execution of the FAMEPAR, FinancialAgency Agreements,and the Part_.cipatingAgreement with SANEPAR,would be required prior to toan Effectiveness.

15. Benefits The improved capacity by the State of rarana and its municipalitiesto mobilize and allocate local resources, coupled with overall improved fiscal policies and management, will ensurp the sustainabilityof investments,provide a timely response to new demands upon local governments (dictatedby the recently approved Constitution),and also directly contribute towards meeting objectives of increased public sector efficiency and lover deficits. The project emphasizes improving the living standards of the urban poor, rather than those of-higher income groups as has happened in the 'ast. L The weighted average rate of return of quantifiablebenefits is estimated to be 17.12. Additional unquantifiablebenefits are derived from the large number of projectcomponents which directlycontrib'ite to reductionof environmentaldamage caused by uncontrolledurban growth.

16. Risks There are two specific risks: (a) the potential lack of political will to carry out financialand institlitionalagreements; and (b) the difficulty inherent in coordination of the program, given the number of participating agencies. Sub-projectand sub-borrowereligibility criteria, secure guarantee through receipts and sales tax commitments,and agreed policies for full cost recoveryhave been designed to minimize the former. In addition,the euthusiasm and results shown by both State and municipal governments, in spite of a difficult macroeconomic environment, ensure strong commitment to project objectives. Considerableattention has been placed on definingthe institutional roles and responsibilitiesof the various agencies before project inception, through the use of a pre-ap-rovedOperation Manual, which should reduce the risk of problems resulting from the lack of coordination. The previous experience of FAMEPAR, BANESTADO, SANEPAR and the majority of the participating municipalitiesin previousBank-financed projects should furthermitigate project risks. The straightforwardnature of the technical assistance, training and works involved, implies few technical risks.

17. Recommendation I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank and recommendthat the ExecutiveDirectors approve the proposed loan.

Barber Conable President

Attachments Washington, D.C. May 22, 1989 6

Schedule A

BRAZIL

MUNICIPAL DEVELOPMENT PROJECT IN THE STATE OF PARANA

Proiect Costs and Financing Plan

Estimated Costs: 11

Local Foreign Total -(US$ million)------

A. Institutional Development 4.1 17.9 - Technical Assistance 10.1 3.0 13.1 - Training 3.7 1.1 4.8

B. Infrastructure 130.4 38.9 169.3 - Municipal 57.6 17.2 74.8 - Environmental Health 67.3 20.0 87.3 - Housing Construction 5.5 1.7 7.2

Total Base Cost 144.2 43.0 187.2

Physical Contingencies 14.4 4.3 18.7 Price Contingencies 16.2 4.8 21.0

Total Project Cost 174.8 52.1 226.9

Financing Plan:

Bank 47.9 52.1 100.0 State of Parana 67.4 0.0 67.4 Sub-borrowers 59.5 0.0 59.5

Total 174.8 52.1 226.9

11 Project costs are shown as of February, 1989. Estimate includes US$22.2 million in direct taxes. Interest during construction has been included in contractors estimates and hence, is part of project costs. 7

Schedule B

BRAZIL

MUNICIPAL DEVELOPMENTPROJECT IN THE STATE OF PARANA

Procurement and Disbursement

Proiect Cost by Procurement Method: 1/

(US$ million}

Local Category ICB LCB Shopping Other Total

Civil works 6.9 65.1 52.7 - 124.7 (3.0) (28.7) (23.2) (54.9)

Equipment and 54.0 15.6 15.6 - 85.2 materials (23.8) (6.9) (6.9) (37.6)

Technical asst. - - - 17.0 17.0 and Training (7.5) (7.5)

Total 60.9 80.7 68.3 17.0 226.9 (Bank loan) (26.8) (35.6) (30.1) (7.5) (100.0)

Tentative Loan Disbursement Schedule: 21

Bank FY 1990 1991 1992 1993 1994

Annual 11.0 23.0 25.0 27.0 14.0 Cumulative -11.0 34.0 59.0 86.0 100.0

11 Figures in parenthesis indicate Bank financing. 21 FY 1990 amount includes an initial deposit into the Special Account, totalling US$7.0 million. 8

Schedule C

BRAZIL

MUNICIPAL DEVELOPMENT PROJECT IN THE STATE OF PARANA

Timetable of Key Proiect Processing Events

(a) Time taken to prepare: 12 months

(b) Prepared by: The State of Parana

(c) First Bank mission: October 1987

(d) Appraisal missiont February-March, 1989

(e) Negotiations: May, 1989

(f) Planned Date of Effectiveness: October, 1989

(g) List of relevant PCRs and PPARs: PCRs: Medium Sized Cities (1720-BR); and North-East Metropolitan (2193-BR). PPARs: Urban Transport I (1563-BR); and Sites and Services and Low Cost Housing (1654-BR). 9 ScheduleD Page I o: 3

THE STATUS OF BANK GROUP OPERATIONSIN BRAZIL A. SUMMARY STATEMENTOF LOANS (As of March 31, 1989)

Amount less Loan 9 Year Borrower Purpose Cancellation Undisbursed (Ub'~ MiJ.llions) One Hundred and five loans fully disbursed 6,037.30

1721 1979 COPEL Power 86.7 _ 1721-5 1979 COPEL Power 22.3 0.2 1924 1981 Brazil Rural Development 54.0 5.8 1939 1981 Power 54.0 9.3 1970 1981 CEF Water Supply 180.0 1/ - 1989 1981 Brazil Alcohol Development 232.8 - 9.5 2060 1982 Brazil Agriculture 67.0 9.3 2061 1982 Brazil Health 13.0 1.0 2062 1982 Brazil Highways 206.0 0.7 2116 1982 Brazil Agriculture 26.4 3.7 2138 1982 ELETROBRAS Power 182.7 75.5 2163 1982 Brazil Agriculture 26.4 5.7 2170 1982 Br zil Urban Development 123.9 25.0 2177 1982 Brazil Rural Development 42.7 12.7 2224 1983 Brazil Feeder Roads 154.0 16.6 2249 1983 CEF Water Supply 302.3 1.0 2268 1983 Brazil Agro-Induatries 400.0 22.8 2269 1983 Brazil Rural Development 67.8 48.4 2343 1984 Brazil Urban Development 52.7 3.2 2347 1984 Brazil Export Development 351.4 0.1 2348 1984 Brazil Agriculture 303.0 1.0 2353 1984 Brazil Agriculture 38.0 20.5 1729-1 1984 Brazil Agriculture 7.7 0.2 2060-1 1984 Brazil Agriculture 22.8 22.7 2364 1984 ELETROBRAS Power 250.0 134.8 2365 1984 ELETROBRAS Power 222.8 0.3 2366 1984 Brazil Education 20.0 9.0 2412 1984 Brazil Education 40.0 18.8 2446 1984 Brazil Federal Highways 210.0 15.1 2447 1984 State of Sao Paulo Health 55.5 15.1 2448 1984 Brazil Health Studies 2.0 0.9 2488 1985 Brazil Development Banking 300.0 64.2 2489 1985 Brazil Education 72.0 36.4 2523 1985 Brasil Rural Development 61.3 42.1 2524 1985 Brazil Rural Development 61.4 42.6 2532 1985 Brazil Rural WS&S Pilot 16.3 13.2 2563 1985 Brazil Railways 200.0 122.9 2564 1985 ELETROBRAS Power Transmission 400.0 299.6 2565 1985 ELETROBRAS Power Distribution 312.0 238.8 2593 1985 Braxil Land Tenure 100.0 72.4. 2623 1986 State of Santa Catarina Urban Development 24.5 20.3 2645 1986 Brazil Urban Reconstruction 100.0 3.4 2679 1986 Brazil Agriculture 155.0 104.2 2680 1986 Brazil IrrigationEng. 480 36.2 2681 1986 Brazil Urban Development 55.0 49.0 2699 1986 Brazil Health 59.5 53.8 2718 1986 Brazil Rural Development 92.0 71.0 2719 1986 Brazil Irrigation 57.0 26.3 2721 1986 Brazil Public Sector 29.0 23.7 2727 1986 Brazil Credit & Marketing Reform SOO O 5.0 10 Schedule D Page z or 3

A. SUMMARY STATEMENT OF LOANS (Continued) (As of March 31, 1989)

Amount less Loan l} Year Borrower Purpose Cancellation Undisbursed (76 1Million B)

2761 1987 Brazil Rural Development 171.0 152.5 2762 1987 Brazil Rural Development 78.0 67.3 2763 1987 Brazil Rural Development 122.0 104.3 2810 1987 Brazil Educatior. 74.5 71.8 2822 1987 Brazil Urban Transport 200.0 187.7 2830 1987 State of Sao Paulo State Highway 174.0 159.3 2831 1987 Brazil Ind.PollutionControl 50.0 39.6 2857 1987 FEPASA Railway Rehabilitation 100.0 90.3 2860 1987 Brazil Rural Development 60.0 52.9 2861 1987 Brazil Rural Development 55.0 48.6 2862 1987 Brazil Rural Development 84.0 77.8 2863 1987 Brazil Rural Development 42.0 35.9 2864 1987 Brazil Livestock Disease Control 51.0 46.4 2883 1988 Centrais Eletricas Resettlement& Brasileiraa S.A. Irrigation 132.0 78.6 2895 21 1988 State of Minas Gerais Forestry Development 48.5 48.5 2931 - 1988 Brazil Disease Control 109.0 101.0 2941 1988 PORTOBRAS Port Technical Assist. 20.0 18.8 2950 2/ 1988 Brazil IrrigationSubsector 195.0 195.0 2960 Z/ 1988 Brazil Agro-IndustriesCredit 300.0 300.0 2971 7/ 1988 Brazil AgriculturalCredit 300.0 300.0 2975 1988 CEF RIo Flood Reconst. 175.0 152.5 2983 1988 CEF Municipal & Low-Income 80.0 62.0 3013 1989 Brazil Irrigation 71.0 71.0 3018 1989 State of Parana LandgManagement 63.0 63.0 Total 15,073.2021 Of which has been repaid to the Bank 3,979.74 Total now outstanding 11,093.46 Amount sold 45.8 Of which has been repaid 45.8 45.80 Total now held by Bank 11,047.66 Total undisbursed 4.338.76

1! Although this loan is fully disbursed, and included under loans fully disbursed above, the initial deposit to the Special Account is currently in the recovery process. The loan will be removed from the list after the loan account closes. 2/ Not yet effective. 3/ No IDA credits have been made to Brazil.

Note: The status of the projects listed in Part A is described in a separate report on all Bank/IDA financed projects in execution,which is updated twice yearly and circulated to the Executive Directors on April 30 and October 31. 11

Pag. 3 of 3

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