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A.I.D. LOAN NO. 497-U-081

A.I.D. LOAN NO. 497-U-082

A.I.D. LOAN NO. 497-Q- 082A

AMENDMENT NO. 4 TO

LOAN AGREEMENT

BETWEEN

THE REPUBLIC OF INDONESIA

AND THE

UNITED STATES OF AMERICA

FOR

FAMILY PLANNING DEVELOPMENT AND SERVICES II

Dated:

September

14, 1987

This AMENDMENT NO. 4, is entered into between the REPUBLIC OF

INDONESIA ("Borrower") and the UNITED STATES OF AMERICA, acting

through the AGENCY FOR INTERNATIONAL DEVELOPMENT ("A.I.D.").

WHEREAS, the Borrower and A.I.D. entered into a Family Planning

Development and Services II Project Loan Agreement designated as

A.I.D. Loan No. 497-Q-077, No. 497-U-081 and No. 497-U-082 on

June 17, 1983 which was amended on July 29, 1983, November 9, 1983,

and on February 6, 1984 ("Loan Agreement"), whereby A.I.D. agreed to

lend to the Borrower up to Fifteen Million Nine Hundred Thousand

United States ("U.S.") Dollars ($15,900,000) ("Loan"); and

WHEREAS, the Borrower and A.I.D. desire to amend the Loan

Agreement to increase the amount of the Loan by One Million Three

Hundred Thousand U.S. Dollars ($1,300,000), revise the Project

Assistance Completion Date and Amplified Project Description,

including Financial Plan, and to make other related changes;

NOW THEREFORE, the Borrower and A.I.D. hereby agree as follows:

1.

The first paragraph of Section 3.1. of the Loan Agreement is

revised to read as follows:

"Section 3.1.

The Loan.

To assist the Borrower to meet the

costs of carrying out the Project, A.I.D., pursuant to the Foreign

Assistance Act of 1961, as amended, agrees to Loan to the Borrower

Two Hundred Thousand United States ("U.S.") Dollars ($17,200,000)

("Loan").

The aggregate amount of disbursement under the Loan is

referred to as "Principal"."

2.

The Project Assistance Completion Date set forth in Sect]on

3.3.(a) of the Loan Agreement is revised to "December 31, 1992."

3.

Sections 6.2., 6.3., 6.4., and 6.S. of the Loan Agreement

are deleted and in lieu thereof is substituted the following Section

6. 2. :

"Section 6.2.

Prohibition on Abortion Related Activities.

None

of the funds under this Loan may be used to finance any costs

relating to (a) performance of abortion as a method of family

planning, (b) motivation or coercion of any person to undergo

abortion, (c) biomedical research which relates, in whole or in

part, to methods of, or the performance of, abortion as a method of

family planning, of (d) active promotion of abortion as a method of

family planning."

4.

Article 8, Disbursement, and Sections 8.1. and 8.2. of the

Loan Agreement are deleted and in lieu thereof is substituted the

following:

"Article 8.

Disbursement for Family Planning Projects.

SECTION 7.1.

Disbursement for Foreign Exchange Costs.

(A)

After satisfaction of conditions precedent, the Borrower may

- 3

-Exchange Costs of goods or services required for the project in

accordance with the terms of this agreement by such of the following

methods as may be mutually agreed upon:

(1)

by submitting to A.I.D. with necessary supporting

documentation as prescribed in implementation letters (a)

requests for reimbursement for such goods or services or (b)

requests for A.I.D. to procure commodities or services on

Borrower's behalf for the project or (c) requests for A.I.D. to

issue letters of commitment for specified amounts directly to

one or more contractors or suppliers committing A.I.D. to pay

such contractors or suppliers for such goods or services.

SECTION 8.2.

Disbursements for Local Currency Costs.

(A) After satisfaction of conditions precedent, the Borrower may

obtain disbursements of funds under the Loan for local currency

costs required for the project in accordance with the terms of this

agreement by submitting to A.I.D., with necessary supporting

documentation as prescribed in project implementation letters,

requests to finance such costs.

Disbursements by A.I.D. shall be in

reimbursement for goods or services required for the project or, if

advances of local currency are mutually agreed upon, disbursements

shall be made into a special account to ensure, inter alia, that

none of the funds provided by A.I.D. may be used to finance any of

(B)

Local currency advanced by A.I.D. to the Borrower may

thereafter be advanced by the Borrower to any other entity for

purposes of the project with the agreement of A.I.D. only if such

advances are also made into a special account or accounts to ensure

that such funds may not be used to finance any costs prohibited

under Section 6.2. of this agreement."

S.

A revised Annex I, Amplified Description of the Project, and

Financial Plan is attached as Annex I to this Amendment.

6.

Except as amended herein, the Loan Agreement is ratified,

confirmed and continued in full force and effect in accordance with

all of its terms.

IN WITNESS WHEREOF, the Republic of Indonesia and the United

States of America, each acting through its respective duly

authorized representative, have caused this Amendment No. 4 to be

signed in their names and delivered as of the date first written

above.

REPUBLIC OF INDONESIA

Signed

Rusli Noor

Director General

for Foreign Economic Relations

Department of Foreign Affairs

UNITED STATES OF AMERICA

Signed

ｾ｡ｶｩ､＠

N. -

Merri,l

Director

USAID/Indonesia

AMPLIFIED DESCRIPTION OF THE PROJECT (AS AMENDED)

I. General Project Description

The purpose of the Project is to assist the Government of Indonesia in its efforts to increase the prevalence of contraceptive use through the national family planning program to 69 percent of all married women of reproductive age (ages 15-44 years) by December 1992.

Grant and loan funds will be used to support the national family planning program through six inter-related project components. The six components are:

1. Expansion of village family planning services in selected provinces;

2. Development of urban family planning programs in major cities, with special emphasis on utilization of the private sector and cost-recovery activities;

3. Improvement of voluntary sterilization services in selected provinces;

4. Management and institutional improvement through training;

5. Management and institutional improvement through the introduction of modern management technologies; and

6. Research and development support to measure program progress, test new ways of delivering information and services, and strengthen monitoring and supervision of program operations.

The National Family Planning Coordinating Board (BKKBN), the Indonesian agency responsible for coordinating all family planning and population programs and activities, will be the implementing agency for all components under this project.

A more detailed description of each project component together with the responsibilities of USAID and the GOI follows:

1. Village Family Planning

Grant and loan funds will be used to assist the BKKBN to

increase the number of fully-functioning village and sub-village family planning posts and to strengthen their information and service capacity. Efforts will be made to expand services in low-performing areas which have potential for growth. Special focus will be on thirteen priority provinces which have been selected by the BKKBN and USAID: West Java, Central Java, East Java, North Sumatra, South Sumatra, West Sumatra, Lampung, Aceh, Riau, South Sulawesi, West Nusa Tenggara, East Nusa

Tenggara, and West Kalimantan. Some additional provinces may be selected for pilot private sector activities described below.

The program will include: strengthening or expanding the number of village or sub-village service points; education and training; pilot testing of new techniques or approaches; information and motivation services; strengthening management, logistics, and reporting

capabilities; equipment and supplies; essential operating costs;

supervision and consultation support. An annual plan incorporating these elements will be developed for each province, tailored to the specific needs of that province, and agreed to by BKKBN and USAID. BKKBN will provide supporting staff salaries, facilities, contraceptives, operating and supervisory costs, materials and supplies, training courses and workshops, and information services. AID funds will be provided for limited commodity procurement and local cost financing for training, workshops, and specific family planning programs. AID will also, on a contract basis starting in IFY 1987, support the salaries of paramedics placed in villages for one year, provided BKKBN hires them the following year.

AID funds will permit greater attention to areas of low prevalence as well as more intensive activity in the outer islands; including decentralized activities and local program initiatives.

Commencing in IFY 1987, funds will also be provided to selected high and low prevalence provinces to test cost recovery and fee-for-service schemes as well as other innovative activities involving the private sector.

2. Urban Family Planning

Project grant and loan funds will be used to expand information and services in the major cities in Indonesia where family planning performance and contraceptive prevalence rates have been below the

3

-Pandang, Malang, Padang, Pontianak, and Surakarta (Solo). Jakarta will receive priority attention and a larger share of funds because of its size and low performance. Commencing in IFY 1988, experimentation with other major cities will also be undertaken.

The program will include the development and expansion of both public and private clinic and service networks; experiments with fee-for-service techniques; training of physicians and midwives; new approaches to the distribution and sale of contraceptives; expanded information and education campaigns; commerical advertising; technical assistance for management and market research; equipment and supplies as needed; and pilot tests of new techniques and approaches, including studies on cost-benefits of various programs or services, trials of fee-for-service arrangements and the expansion of private clinic

networks. An annual plan will be developed for each city, according to its specific requirements, and agreed to by BKKBN and A.I.D.

BKKBN will provide funds for staff salaries, facilities, program contraceptives, operating and supervisory costs, materials and supplies, training courses and workshops, and information services, AID funds will be provided for technical assistance and local cost financing for

training, and specific urban family planning programs which are designed throughout the life of the project.

3. Voluntary Sterilization

Project grant funds will enable the BKKBN, in collaboration with the Ministry of Health, the private Indonesian Association for Secure Contraception (PKMI), and other institutions, to extend voluntary

sterilization (VS) services to provincial and regency (kabupaten) level hospitals and sub-district (kecamatan) clinics in areas of high

contraceptive prevalence, and where demand for more permanent methods of family planning is growing steadily. A phase one needs assessment will lay out the requirements for upgrading 500 service facilities in

13 provinces initially selected. A phase two needs assessment will

review the 13 provinces to assure good geographic VS service coverage and survey the other 14 provinces for upgrading requirements. An estimated 200 service facilities will be selected in phase two. Selection of

sub-districts will be based on the level of contraceptive prevalence, the potential demand for voluntary sterilization, and the degree of support from provincial and sub-district officials and informal leaders.

Facilities in both hospitals and clinics will provide information and a full range of contraceptives to ensure each family planning acceptor can make an informed choice. All voluntary sterilization programs under this project will be in full compliance with A.I.D. Population Policy

and provide training of physicians and paramedical personnel and

technical assistance where appropriate. AID funds will also be provided to establish a national VS supervision and surveillance system and to develop a private VS clinic network.

BKKBN will fund payments for physicians and staff, medicines and supplies, and operating costs of newly-created facilities over a five year period. AID funds will be provided for the local currency and foreign exchange financing of commodities related to the upgrading of sterilization facilities. USAID and BKKBN will agree on annual plans for specific activities under this component.

4. Training

Grant and loan funds will (1) enable approximately 120 persons to complete the master's degree and 12 persons to complete doctoral degrees in the United States; (2) enable approximately 166 persons to obtain bachelor's degrees, 72 persons to complete master's degrees and 1 person to complete a doctoral degree in Indonesia; (3) develop a distance learning program for family planning fieldworkers; (4) conduct technical training for paramedic and family planning fieldworkers;

(5) plan for new schools of public health, including identification of faculty members requiring additional academic training and specifications of library and other reference requirements; and (6) improve the

personnel manpower management system at BKKBN.

AID project funds will be provided for academic training and related support costs in the U.S. and in Indonesia; air fares for short term international training; technical assistance for the BKKBN's Center for Education and Training and for the development of new schools of public health; books and equipment for library development at the public health schools; developmental costs of the distance learning program and

personnel manpower system; and computerization of overseas and in-country training management systems. BKKBN will provide funds for salaries and family separation allowances of persons in training, air fares for long-term overseas training participants, staff to manage the overseas and in-country training systems, routine recurrent costs such as postage, telexing, telephoning, photocopying, and production of an orientation booklet for each participant. A prime goal of this assistance is to institutionalize BKKBN's capacity to manage independently in-country and overseas training of its personnel.

5. Modern Management Technology

Project grant and loan funds will be used to assist the BKKBN develop computer and word processing capabilities in all provincial BKKBN offices, in headquarters offices, and in selected training and research institutions. Two needs assessments, expected to be completed by late 1983 and early 1988, will form the basis for a detailed plan for

5

-computer and word processing hardware, software, and related training of professional and secretarial staff. BKKBN will fund maintenance and operational expenses involved in installing and maintaining this data processing capability. AID funds will permit the acquisition of

additional software/hardware needed for BKKBN as well as permit expansion in training and provision of technical assistance.

6. Research and Development

Project grant funds for research and development will be divided among bio-medical, operations and policy research as well as a number of institutional development activities. It is anticipated that the project will support 40 research and development studies, national contraceptive prevalence surveys in 1987 and 1990, 18 seminars and workshops on special population research and research methodology-related topics, and short and long term technical assistance. The BKKBN will fund staff time, facilities, and some research and development activities under the project. AID will fund local costs, technical assistance, and some US commodities (library materials, and a computer).

II. Evaluation

Ongoing evaluations will analyze the costs and benefits of

alternative subcomponent activities, both public and private, in order to strengthen program effectiveness and guide program design. For this, the BKKBN will continue to maintain and make available recurring and

development costs, acceptor rates, and other data from on-going and pilot programs.

BKKBN's monthly service statistics system will provide the basis for regular reviews of program performance. Other regular reporting and sampling systems of the BKKBN will provide additional information for monitoring program performance. Independent measures of contraceptive prevalence will be obtained from national contraceptive prevalence surveys to be conducted in 1987 and 1990. BKKBN and USAID will conduct external evaluations of each project component, according to the

following estimated schedule: Training - June-December, 1986; Village Family Planning JanuaryMarch, 1988; Modern Management Technology -January-March, 1988; Research - February-April 1988; Voluntary

Sterilization - April-June 1988; Urban - September-December 1988. In addition, an overall project review will be scheduled when most

components have utilized their funding.

III. Financial Plan

pursuant to annual plans mutually agreed to in Project Implementation Letters (PILs) and Project Implementation Orders (PIOs). All A. I . D. funding under the project will follow A.I.D. regulations. Disbursement will be handled in compliance with the Joint Decree of the Minister of Finance and the Minister of State for National Development Planning/ Chairman of Bappenas No . 48/KMK.012/1987 dated January 27, 1987, based

Kep.004/Ket/I/1987

on details to be determined between USAID and the GOI. Disbursement procedures for various project activities, consistent with the details determined between USAID and the GOI above, will be agreed upon by PIL.

7

-FAMILY PLANNING DEVELOPMENT AND SERVICES II PROJECT INPUTS

(US$.OOO's)

Attachment l(a)

FY83-86

I

Total FY 87

I

Total FY 83-87

I

Component Obligations

I

Obligations

I

Obligation

I

Grant Loan G.O.I.

I

Grant Loan G.O.I.

I

Grant Loan G.O.I.

I

I. Village Family Planning 299 5,755 38,692 1,000 - 4,000

I

1,299 5,755 42,692

I

I

I

II. Urban Family Planning 600 3,150 14,173 3,500 - 3,000

I

4,100 3,150 17,173

I

I

I

III. Voluntary Sterilization 3,582 - 11,716 4,300 - 1,580

I

7,882 - 13,296

I

I

I

IV. Training 250 6,395 684 1,400 1,300 300

I

1,650 7,695 984

I

I

I

V. Modern Management Technology 869 600 104 500 - 120

I

1,369 600 224

I

I

I

VI. Research and Development 1,900 - 1,497 1,000 - 1,000

I

2,900 - 2,497

I

I

---I

I

TOTAL: 7,500 15,900 66,866

I

11,700 1,300 10,000

I

19,200 17,200 76,866

I

I

I

I

Total: (AID+GOI)

49,746

24,423

21,178

10,329

2,193

5,397

FAMILY PLANNING DEVELOPMENT AND SERVICES

SUMMARY OF GOI/AID COMMITTED INPUTS BY PROJECT COMPONENTS (US$.OOO's)

Component

Village Family Planning

Ｈｾ｡ ｮ＠ Family Planning

ｾ＠

...

Voluntary Sterilization

Training

Modern Management Technology

Research and Development

ﾷ ｾ＠

1 r ,

ｾ＠

.,

TOTAL:

USAID OBLIGATIONS TO DATE

GRANT LOAN TOTAL FX LC FX

I

LC

399 900

- I

5,755

I

7,054

I

I

2,400 1, 700

- I

3,150

I

7,250

I

I

3,087 4,795

-

I

- I

7,882

I

I

550 1,100 5,245

I

2,450

I

9,345

I

I

1,100 269

-

I

600

I

1, 969

I

I

700 2,200

-

I

- I

2,900

I

I

8,236 10, 964 5,245 11, 955 36,400

GOI TOTAL LC

42,692 49,746

17,173 24,423

13' 296 21,178

984 10,329

224 2,193

2,497 5,397